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UNITED STATES v. WESTERN ELEC. CO.

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA


December 7, 1983

UNITED STATES OF AMERICA, Plaintiff,
v.
WESTERN ELECTRIC COMPANY, INC., AND AMERICAN TELEPHONE AND TELEGRAPH COMPANY, Defendants; UNITED STATES OF AMERICA, Plaintiff, v. AMERICAN TELEPHONE AND TELEGRAPH COMPANY, et al., Defendants

The opinion of the court was delivered by: GREENE

MEMORANDUM

 On November 8, 1983, the Court requested AT&T, the Regional Operating Companies, and the Department of Justice to apprise it of the plans of the various entities regarding the provision of time and weather information to the public and as to the legal status of such plans.

 It appears from the responses that have been received that current policies and practices concerning the provision of time and weather services differ widely. Depending on the region, some Operating Companies presently provide time and weather information free of charge and expect to continue to do so if permitted under the decree; *fn1" others do not now furnish these services themselves but rely on commercial sponsors to do so (see infra); still others provide time and weather services but may cease doing so, *fn2" especially if they are able to find a commercial sponsor willing to assume this task. *fn3"

 The Court is without authority under the decree to require any Operating Company to provide time and weather information. That is and always has been a decision for the companies themselves, subject to whatever direction federal or state regulators may give to them. The Court is involved only because there is a difference of views as to whether the decree precludes the Operating Companies from continuing to provide these services following the Bell System reorganization.

 I.

 Section II(D)(1) of the decree prohibits the Operating Companies from providing information services. *fn4" These services are defined as "the offering of a capability for . . . making available information which may be conveyed via telecommunications." Section IV(J) of the decree; see also, United States v. AT&T, 552 F. Supp. 131, 229 (D.D.C. 1982). Because time and weather announcements fall within this definition, the Operating Companies are prohibited from providing such services *fn5" absent a waiver from the Court. *fn6"

 The Department of Justice supports the grant of a waiver where time and weather information is offered as a public service, but it opposes a waiver to the extent that the information may be offered on a "commercial basis." *fn7" The Department argues that if the services can be offered commercially there is no public benefit in permitting the Operating Companies to provide them because other vendors would have an incentive to do so. Moreover, according to the Department, where there is a commercial interest, the Operating Companies would have the incentive and the ability to discriminate against competing time and weather service providers in regard to access arrangements as well as the incentive and ability to engage in cross subsidization. In short, the Department once again reiterates the arguments it has consistently made with regard to non-monopoly activities of the Operating Companies, e.g., the Yellow Pages and the marketing of customer premises equipment. See United States v. AT&T, supra, 552 F. Supp. at 191-94.

 To the extent that the Department equates the provision of these services on a "commercial basis" with the imposition of a charge, its objection is without merit. Vendors who are candidates for the provision of this service will be no less likely to offer it if the Operating Company provides it for a fee than if that company furnishes it free of charge. If anything, where the Operating Company charges a fee, a potential competitor may assume the presence of a profitable market and be encouraged to enter the field. In short, the provision of these services by an Operating Company, even for a fee, has no anticompetitive potential, and accordingly the Court's waiver extends to such situations.

 The Department's objection to the continued provision of time and weather services by the Operating Companies once alternative providers are present presents more difficult problems on which the Court will, at this time, reserve judgment. First, none of the Regional Operating Companies has indicated in its replies to the court that it intends to provide time and weather announcements on its own in competition with a commercial sponsor should it be able to find one. Second, the resolution of this matter may depend on a number of factors which are presently unknown and unknowable, *fn8" and the issue is therefore not ripe for adjudication. See generally, Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction ยง 3532. If and when this situation arises, there will be time enough to tackle the question whether an Operating Company wishing to provide time and weather services competitively has shown that "there is no substantial possibility that it could use its monopoly power to impede competition in the [relevant] market . . . ." Decree, section VIII(C).

 For these reasons, the Court hereby grants a waiver with respect to time and weather announcements pursuant to sections VII and VIII(C) of the decree, and it expressly rules that an Operating Company may provide such announcements to its customers notwithstanding section II(D) of the decree. The provision of this service is obviously in the public interest, and, at least where no alternative provider of this service is present (see supra), the furnishing of these services by the Operating Companies should be encouraged rather than prohibited.

 In view of the waiver, if any telephone company ceases to provide time and weather services, that would be its own business decision, *fn9" and the decree would simply be an excuse for an action which the company decided to take for its own commercial reasons. *fn10"

 II

 The collateral question raised by the Regional Operating Companies remain to be considered.

 First. Several Operating Companies have made arrangements with unaffiliated sponsors to provide time and weather services, and they request the Court's ruling regarding the legality of such arrangements under the decree. In such a situation, a local business typically purchases or leases announcement equipment, prepares a message, and pays the Operating Company for exchange access, and the person who calls the appropriate number hears an advertising message as well as the time and the weather. In the view of the Court, under these circumstances, the Operating Company does not "provide information services" within the meaning of section II(D) of the decree; it merely transmits a call under the tariff. Accordingly, no waiver is required. *fn11"

 Second. Some of the Operating Companies offering time and weather services use facilities which cross LATA boundaries. *fn12" If these companies were required to reconfigure their networks to avoid all inter-LATA transmission, their costs would rise substantially, *fn13" and they therefore seek clarification that these services represent "official services" within the meaning of the decree and for that reason do not fall within the prohibition on interexchange services. *fn14" The Department of Justice does not object to this request, and the Court sees no reason, given the purposes of the decree, why it should not be granted. However, the time and weather services do not properly fall within the four basic categories of "official services" set out in the decree, *fn15" and to classify them as such would set an undesirable precedent. Accordingly, the Court hereby grants a modification of the decree, pursuant to sections VII and VIII(C), to allow continuation of these services on the present, limited inter-LATA basis.


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