possibility of anticompetitive consequences.
In view of the conditions already imposed upon the waiver, the Court concludes that such consequences are unlikely.
Any Operating Company incentive to discriminate in favor of a subsidiary affiliated with a Regional Holding Company is significantly attenuated by the separate subsidiary relationship and the separate financial structure. Furthermore, such discrimination would have to be relatively open if it were to have an impact upon customer preferences, and it would thus be readily apparent to competitors.
That is not to say that TRW's concerns are without force or validity; they are not. However, after carefully analyzing the TRW arguments, the Court has ultimately come to the same result as the Department of Justice, that is, that sufficient safeguards exist in the waiver order, as modified by the various conditions, to prevent improper discrimination. Nevertheless, because the issue is a close one, and because some potential for anticompetitive activity by the Regional Holding Companies is present, the Court urges the Department of Justice to be particularly vigilant in the exercise of its monitoring and inspection authority with respect to these enterprises, and to take prompt action, by a report to the Court and otherwise, if violations are detected.
For the reasons stated, the Court will approve the NYNEX, Pacific Telesis, and BellSouth requests to provide office equipment and Bell Atlantic's request to enter the computer sales and services business.
In deciding line of business waiver requests, the Court must maintain a careful balance in two respects. Substantively, the Court must ensure, on the one hand, that the Regional Holding Companies -- which are monopolies in their respective areas, having control of the local switching gateways through which many of their potential competitors must pass -- are not given the opportunity to establish an anticompetitive position in a competitive market similar to that which the Bell System enjoyed prior to its break-up. On the other hand, however, the Court must take care not to prevent these companies from entering markets where such entry would not be inconsistent with the policies underlying the decree but might actually support such policies. Procedurally, the Court must maintain a similar balance: it has the obligation to permit all interested parties to submit their views, comments, and objections, especially those parties which might be injured by unfair competition from the monopolists; yet it must also take care not to become unduly and repeatedly involved in the details of many requests for waivers.
The solution the Court adopted to deal with these dilemmas was the establishment of general guidelines in the July 26, 1984 Opinion. These guidelines embody the various policy objectives of the decree, they are applicable to potential waiver requests generally, and they assign to the Department of Justice a significant role for the negotiation of specific conditions pertinent to specific situations.
The requests for waiver now before the Court and the process which brought them here have borne out the Court's expectations when the July 26, 1984 procedure was announced. The orders submitted to the Court are the product both of third-party comments and of negotiations between the respective applicants and the Department of Justice; all of them conform to the guidelines previously announced by the Court; and all of them are here with favorable Department of Justice recommendations.
It appears therefore that the procedure, the guidelines, and the Department's intensive participation have resulted in a system which appropriately takes account of the competing interests, promotes negotiation and flexibility as to the proper scope of any proposed enterprise, and permits the expeditious resolution of the issues.
On the merits of the various requests, it is clear that, but for the conditions to which the various petitioning Regional Holding Companies have agreed, the Court could not have permitted them consistently with its responsibilities under the decree, to enter the broad and varied lines of business to which they are now committed, going far beyond those to which they were explicitly restricted as of January 1, 1983 by section II(D) of the decree (see page 258, supra). The Court is confident, however, that these conditions will adequately protect the public from anticompetitive practices as well as from infringement of the other policies underlying the decree in this case.
Accordingly, for the reasons stated above, the Court is this day approving all of the requests for waivers submitted to it, in accordance with the consent orders agreed to by the parties.