Regional Company calling card with an international number has no choice as to which United States carrier transmits the call; it is always AT & T.
While the Regional Companies are not responsible for PTT policies which favor AT & T, they cannot, consistently with the decree, be allowed to perpetuate those policies as the use of what is in effect an AT & T international calling card number has some tendency to do.
Nevertheless, for a variety of reasons, the Court does not consider it necessary, as several interexchange carriers as well as the Department of Justice suggest, to order the Regional Companies to cease the issuance of calling cards that bear an international number
and to withdraw or replace all such cards.
The international numbers on the calling cards provide an important benefit to American travellers: a simple and familiar way to pay for calls from abroad, particularly since the alternatives frequently involve a high hotel service charge, the necessity for paying for the call in foreign currency, or placing it at a foreign post office. Notwithstanding these considerations, the Court would order a halt to the current practice, without more, either (1) if the Regional Companies were responsible for the discrimination against the non-AT & T carriers, or (2) if such action by the Court would rectify the problem. Neither of these assumptions is correct, however.
If the foreign PTTs are unwilling to recognize any American interexchange carrier other than AT & T, that is of course deplorable from the point of view of American antitrust and pro-competition policies. However, it is not a matter that is within the power of the Regional Companies, or indeed of this Court, to change. What the Court could do, as indicated above, would be to stop all use by the Regional Companies of international numbers on their calling cards. That would not have the effect of altering foreign PTT policies; those foreign telecommunications agencies that recognize only AT & T could confidently be expected to continue to do so.
Indeed, such a court order would likely be counterproductive. To the extent that foreign telecommunications providers and their officials become more acquainted with interexchange carriers other than AT & T (see infra), they might become more sympathetic to the need to permit calls to be made through the medium of such carriers. Except for that possibility, the only real effect of such an order by the Court would be to make it more difficult for American travellers abroad to charge their calls.
Here, as in other matters, it is not necessary to cut off service completely or to do nothing. At least one Regional Company (BellSouth) has suggested that it is prepared to place on its cards the international number of any interexchange carrier to which the customer may have presubscribed. In the Court's view, such a solution, if required across the board, will adequately remedy the discrimination for which the Regional Companies are actually responsible.
Accordingly, the Court is ordering that the Regional Companies shall by January 1, 1989,
recall all their calling cards that carry the same international number as is used by AT & T. However, these companies may continue these cards in circulation, as limited to AT & T customers, if by that same date they issue calling cards which list, instead of the number that identifies AT & T, the international number of any interexchange carrier other than AT & T to which the customer may have presubscribed.
Regional Companies' Acceptance Only of AT & T Calling Cards
The Regional Companies will currently accept AT & T calling cards for local calls; they will not do this, however, for any other interexchange carrier. For example, a caller attempting to use a US Sprint FONCARD to charge a local call will receive a Regional Company operator response that the calling card is not valid. The effect of this practice is to permit AT & T, and only AT & T, to offer a universal calling card, that is, a card that may be used for both local and long distance calls -- a significant competitive advantage.
The reason given by the Regional Companies for accepting AT & T's cards for local calls is that they are able to use the DBA systems to validate calls charged to AT & T, but that they lack the necessary information to validate the calling cards of other interexchange carriers. However, the Regional Companies have long known that they were required to file, and they presumably did file, written commitments that they would provide "equal access to the interexchange carriers with respect to all LATAs within [their] control, on a non-discriminatory basis, for intra-LATA as well as for inter-LATA traffic."
Obviously, with respect to the use that may be made of interexchange carriers' calling cards, exchange access is not being provided on an non-discriminatory basis.
The current discrimination would be removed if the Regional Companies stopped validating AT & T's calling cards until they had the ability to validate the calling cards of all interexchange carriers who wanted their calling card to have access to the local market. This remedy, however, runs the risk that the Regional Companies will never achieve that ability having no incentive to do so, and that they will instead entrench their own cards as the only universal calling cards. The only productive remedy therefore is to achieve validation of the cards of all interexchange carriers, not merely AT & T's.
The Department of Justice states that, notwithstanding the current violation, it cannot ask the Court for remedial action because it does not know how, technologically, the Regional Companies can validate the calling cards of interexchange carriers other than AT & T.
Likewise, neither the Regional Companies nor the interexchange carriers have informed the Court how the existing technological problems may be solved.
It appears that the principal difficulty is the receipt by the Regional Companies of the necessary data from the interexchange carriers and the need to program Regional Company equipment to permit it to recognize the issuing carriers' cards for validation purposes. This clearly should not be an insuperable problem if the parties will work together toward that end.
The several Regional Companies have suggested in various ways that within the next few months they will be able to submit to the Court their proposed remedies.
On this basis, the Court is ordering the Regional Companies to submit to the Court by January 1, 1989 proposed remedies that would afford to the calling cards of the interexchange carriers the same acceptance as is now given to AT & T cards.
Regional Company-Owned Public Telephones
The Regional Companies own large numbers of public telephones that are located on premises owned or controlled by others, including pay telephones in such places accessible to the public as airports, hotel lobbies, service stations, and bars. These public telephones generate enormous revenue: there are said to be 1.7 million Regional Company public telephones, yielding $ 2.5 billion in annual revenue.
With respect to the matter of payment for the calls, two types of long distance calls are made from such public telephones: (1) calls which are paid for by coins deposited in the telephone mechanism, also known as 1 or coin sent-paid
calls, and (2) all other calls, also known as 0 or operator-assisted
calls. It is appropriate to consider first the 0 calls since they constitute by far the majority of the public telephone traffic.
A. Operator Calls
The Regional Companies route all 0 calls
from their public telephones to AT & T, yielding that company over one billion dollars annually,
even though other interexchange carriers now have the operator systems capacity to handle these calls. There is no serious dispute that this practice is discriminatory and violative of sections II(A) and II(B) of the decree, and the Court so concludes. The question is what system is to take its place.
The Regional Companies, the Department of Justice, and others all agree that a system which permits the billed party to select the interexchange carrier of his choice simply by dialing 0 most perfectly comports with the language and purposes of the decree.
That is clearly correct. Section (A)(2)(ii) of Appendix B of the decree unambiguously requires the Regional Companies to
offer . . . access that permits each subscriber automatically to route, without the use of access codes, all the subscriber's interexchange communications to the interexchange carrier of the customer's designation (emphasis added).