Defendants Appellees: Et Al. Et Al
Defendants Appellees: Et Al. Et Al
Defendants Appellees: Et Al. Et Al
. Nb. 95-'5137
and cOilsolidated ca.ses
ANE K. BINGAM
Assistant Attorney General
DAVID S. TUETSKY
Deputy Assistant , Attorney
General
CATHERINE G. 0' SULLIVAN
DONALD J. RUSSELL NANCY C. GARRISON
BRENT E. MASHAL
Attorneys
Attorneys S. ' Department of Justice
S. Department of Justice Antitrust, Division
Antitrust Division Appellate Section - Rm. 3224
Washington. D. C. 20001 th & Pennsyl vania Ave.. N.
Washinqton. D. C. 20530
(2()2) 514-1531
CERTIFICATE AS TO PARTIES,
RULINGS AN RELATED CAES
To counsel' s knowledge, the informtion required by Rule
28 (a) (1) is provided in the Brief for the Bell Company Appellants
28, 1995 order that is the subject of this appeal, and 2) several
the new section VIII (L) (2) (a) also are pending in the district
court.
Nancy C. Garrison
s Imposition of 2 (a)
The District Court'
Rests on a Misapplication of the VIII (C)
Standard
The Waiver Conditions Other Than 2 (a)
Effectively Prevent Abuse of the "Mobile
Bottleneck, II Which Is Quite Different
from the "Landline Bottleneck" .
The Decree Permits Partial Waivers That
Replace Prohibitions With Appropriate
Condi tions
The 2 (a) Condition Largely Negates a
Waiver That Should Be Granted Under
VI I I (C) .
CONCLUSION
TABLE OF AUTORITIES
CASES
MISCELLANOUS
U. S. Dep' t of Justice and Federal Trade
Comm' n, Horizontal Merger Guidelines
BOC Br. Brief for the Bell Company Appellants ' (Aug. 1~,
~995 )
No. 95-5137
and consolidated cases
AT&T and MCI did not appeal, and they do not contend that
the district court erred in granting the waiver with the 2 (a)
condition.
required except in areas where a non-BOC provides alternative
market. AT&T Br. at 39- 44. AT&T did not appeal from the grant
of the waiver , however, and this argument undercuts its
simply wrong.
Finally, AT&T and MCI contend that, in any event, the 2 (a)
condition is not anticompetitive. They argue that interexchange
carriers could not " veto" BOC provision of interexchange wireless
services by failing to use available alternative access services,
because 2 (a) requires only that alternative MTSO-to-POP access be
provided, " not that interexchange carriers use it. See AT&T Br.
at 44-47; MCI Br. at 7-9. However, there presently is little if
any alternative access - - used or unused - - and there is no
assurance that it will develop. Thus, even if provision without
use satisfies 2 (a), that condition largely bars BOC services that
erroneous" standard of review. AT&T Br. at 32- 39; see also MCI
Br. at The United States, however, does not dispute that the
BOCs have a continuing "Mobile Bottleneck" in most areas, i. e.
that interexchange carriers depend on BOC landline facilities for
emphasized, the BOCs may satisfy VIII (C) by showing '" that there
is no substantial possibility that (they) could use (their)
monopoly power to impede competition in the market (they) seek
to enter. United States v. Western Electric Co. , 900 F. 2d 283,
295 (D. C. Cir. (quoting VIII (C) ) Triennial Review Appeal
cert. denied , 498 U. S. 911 (1990); id. at 300-01 (considering but
rej ecting argument that monopoly power could not be used to
impede competition); United States v. Western Electric Co. , 12
3d 225, 233- 35 (D. C. Cir. 1993) Affiliated Enter:rise
(noting that court must consider not only whether a BOC may favor
its own services but whether such favoritism is likely to have
anticompetitive effects).
Al though AT&T points to the district court' s quotation of
the VIII (C) standard, see A&T& Br. at 30 (quoting 890 F. Supp. at
(JA 3)), the court did not conduct the full analysis required
to determine whether a waiver subj ect to the Department'
acceptable levels, '" 890 F. Supp. at 8 (JA 8), the court made no
the critical issue of the BOCs ' ability to use their monopoly
AT&T and MCI contend that, absent 2 (a), BOC provision of the
limited interexchange services permitted by this waiver would
have essentially the same anticompetitive effects as a complete
lifting of the interexchange restriction. AT&T Br. at 32- 39; MCI
Br. at 4 - 7 . They are wrong. The record establishes and the
district court recognized that the conditions proposed by the
path from the caller to the interexchange carrier and from the
interexchange carrier to the called party. In contrast, cellular
and the BOC end office switch" (AT&T Br. at 14), nor are cellular
calls switched within the BOC landline network before reaching
call" does not establish that the BOCs have " the same ability to
much higher or quality so much lower that CAPs would not provide
would not allow them to use their local exchange market power to
limited fashion. The issue under VIII (C) is whether the BOC'
entry - - on the terms permitted by the court will create a
substantial possibility that the BOC could use its monopoly power
systems. They contend, however, that 2 (a) does not really give
interexchange carriers that power because it " requires only that
alternative access be ' provided' . . not that it be ' used' and
not even that it be ' economical. AT&T Br. at 45; see also MCI
Br. at 7 - 9.
facilities" ; once CAPs have done so, BOCs will be able to provide
interexchange service, and interexchange carriers will have no
CONCLUSION
Respectfully submitted,
ANE K. BINGAM
Assistant Attorney General
DAVID S. TUETSKY
Deputy Assistant Attorney
General
Nancy C. Garrison
CERTIFICATE OF SERVICE
I hereby certify that on October 30, 1995, the foregoing
REPLY BRIEF FOR THE UNITED STATES AS CROSS-APPELLA (final copy
with JA citations) was served by first-class mail, postage
prepaid, on:
C.
NANCY C. GARRISON
At torney
Department of Justice - Main Bldg.
Antitrust Division
Appellate Section - Rm. 3224
10th & Pennsylvania Avenue, N.
Washington, D. C. 20530