Southern Pac. Com. Co. v. American Tel. & Tel. Co.

Decision Date10 January 1983
Docket NumberCiv. A. No. 78-0545.
Citation556 F. Supp. 825
PartiesSOUTHERN PACIFIC COMMUNICATIONS COMPANY, et al., Plaintiffs, v. AMERICAN TELEPHONE AND TELEGRAPH COMPANY, et al., Defendants.
CourtU.S. District Court — District of Columbia
COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Stephen Ailes, Richard A. Whiting, Richard Diamond, Edmund W. Burke, John R. Labovitz, Ellen M. McNamara, Janet L. Kuhn, Ralph A. Taylor, Jr., Michael C. Miller, Philip L. Malet, John W. Rumely, Jr., Kevin J. Brosch, Maureen O'Keefe Ward, James R. Young, Mark F. Horning, Steptoe & Johnson, Washington, D.C., for Southern Pacific Communications Co., et al.

George L. Saunders, Jr., Michael S. Yauch, Kenneth K. Howell, Chicago, Ill., Lee A. Monroe, Washington, D.C., Theodore N. Miller, C. John Buresh, Chicago, Ill., David J. Lewis, Washington, D.C., Gerald A. Ambrose, Robert E. Mason, Jules M. Perlberg, John C. Woulfe, Chicago, Ill., Langley R. Shook, Stewart A. Block, Washington, D.C., Craig L. Caesar, Charles H. Kennedy, Deborah H. Morris, Chicago, Ill., Alan L. Morrison, Julie D. Nelson, William P. O'Neill, Merinda D. Wilson, Sidley & Austin, Hugh N. Fryer, John M. Friedman, Jr., James F. Bendernagel, Jr., Washington, D.C., Dierdre A. Burgman, Steven M. Bierman, Thomas DeRosa, Robert Hirth, New York City, Craig King, Washington, D.C., John J. Langhauser, New York City, G. Ridgley Loux, Washington, D.C., Martha Solinger, Kenneth Thomas, Scott Univer, Alan M. Unger, Dewey, Ballantine, Bushby, Palmer & Wood, New York City, Howard J. Trienens, Jim G. Kilpatric, Richard C. Schramm, William J. Jones, New York City, Peter C. Breitstone, Kathleen F. Carroll, New York City, Deborah S. Droller, Washington, D.C., Norman E. Gamble, A. Jared Silverman, J. David Stoner, Roger J. Siebel, New York City, American Telephone & Telegraph, Wiley A. Branton, Thomas J. Hearity, Kravetz & Hearity, Washington, D.C., for American Telephone & Telegraph, et al.

                               TABLE OF CONTENTS
                INTRODUCTION                                 850
                PARTIES                                      852
                BACKGROUND                                   854
                NATURE OF THE ISSUES                         866
                STANDARDS FOR ESTABLISHING A VIOLATION OF
                SECTION 2 OF THE SHERMAN ACT                 870
                MONOPOLY POWER AND RELEVANT MARKET           871
                RELEVANT MARKET                              871
                DEFENDANTS' MARKET POWER                     877
                INTENT TO MONOPOLIZE                         888
                THE PRICING CLAIMS                           914
                TELPAK                                       914
                HI/LO & MPL                                  916
                DESCRIPTION OF HI/LO AND MPL RATES           917
                HI/LO                                        918
                MPL                                          918
                APPLICABLE LEGAL STANDARDS FOR PREDATORY
                PRICING CLAIMS                               918
                EVIDENCE CONCERNING WHETHER AT&T'S
                RATES WERE BELOW COST                        927
                EVIDENCE CONCERNING WHETHER AT&T "PRICED
                WITHOUT REGARD TO COSTS"                     933
                PLAINTIFFS' ADDITIONAL CLAIMS WITH RESPECT
                TO TELPAK                                    946
                SPCC'S CLAIMS REGARDING THE STRUCTURE OF
                TELPAK                                       947
                SPCC'S CLAIMS REGARDING MAINTENANCE OF
                TELPAK DURING THE 1970'S                     953
                SPCC'S CLAIMS REGARDING JOINT TELPAK         956
                
                PLAINTIFFS' ADDITIONAL CLAIMS WITH RESPECT
                TO HI/LO                                               957
                THE CHARGE OF MISREPRESENTATION                        957
                THE CHARGE THAT HI/LO UNDERCUT PLAINTIFFS'
                RATE                                                   963
                THE CHARGE THAT AT&T DID NOT PROFIT-MAXIMIZE           964
                THE CHARGE THAT AT&T "PREANNOUNCED"
                HI/LO                                                  965
                LACK OF INJURY IN FACT                                 967
                THE INTERCONNECTION CLAIMS                             972
                THE APPLICABLE LEGAL STANDARD FOR INTERCONNECTION
                CLAIMS                                                 972
                DENIAL OF ACCESS TO INTERCITY FACILITIES               978
                PIECE-OUT                                              979
                INTERCITY FACILITY LEASING                             985
                DENIALS OF FX AND CCSA INTERCONNECTION                 985
                INTERSTATE FX AND CCSA                                 985
                INTRASTATE FX                                          998
                TERMS AND CONDITIONS OF THE PROVISION OF
                LOCAL DISTRIBUTION FACILITIES                         1000
                "COERCION" AND "DURESS"                               1001
                FILING OF STATE TARIFFS                               1008
                RATES FOR LOCAL DISTRIBUTION FACILITIES               1012
                LOCAL DISTRIBUTION AREAS                              1016
                INTERCONNECTION REQUIREMENTS                          1017
                JOINT END-TO-END TESTING                              1020
                PRACTICES, PROCEDURES, AND PERFORMANCE                1021
                NON-COOPERATION                                       1026
                ORDERING PROCEDURES                                   1035
                INSTALLATION AND REPAIR                               1039
                INSTALLATION                                          1040
                REPAIR                                                1047
                OTHER CLAIMS                                          1052
                RELIANCE UPON FCC DECISIONS ON PRICING
                AND INTERCONNECTION CLAIMS                            1054
                FACT OF INJURY                                        1058
                THE APPLICABLE LEGAL STANDARD FOR PROVING
                FACT OF INJURY                                        1058
                EVIDENCE RELATING TO ALLEGED LOSS OF REVENUE          1059
                EVIDENCE RELATING TO ALLEGED LOSS OF CUSTOMERS        1062
                EVIDENCE RELATING TO ALLEGED INCREASES
                IN COSTS                                              1065
                OTHER CAUSES OF SPCC'S LOSSES                         1066
                AMOUNT OF DAMAGES                                     1073
                SPCC'S DAMAGE EVIDENCE                                1075
                SUFFICIENCY OF THE "BUT-FOR" DAMAGE MODEL             1076
                MARKET SHARE ASSUMPTIONS                              1078
                DEMAND ASSUMPTIONS                                    1079
                PRICE ASSUMPTIONS                                     1080
                ASSUMPTIONS ABOUT THE PLAN OF THE "BUT-FOR"
                COMPANY                                               1083
                OTHER ASSUMPTIONS ABOUT THE CONDUCT OF
                THE "BUT-FOR" COMPANY                                 1085
                DISCOUNT RATE ASSUMPTIONS                             1087
                ASSUMPTIONS ABOUT THE "DAMAGED" PRIVATE
                LINE BUSINESS                                         1087
                PIECE-OUT CLAIM                                       1089
                SEGREGATION OF DAMAGES                                1090
                THE SUFFICIENCY OF SPCC'S ALTERNATE MEASURES
                OF DAMAGES                                            1093
                CONCLUSION                                            1095
                
MEMORANDUM OPINION

CHARLES R. RICHEY, District Judge.

INTRODUCTION

This action was originally filed on March 27, 1978,1 and was brought by Southern Pacific Communications Company and Transportation Microwave Corporation SPCC against the American Telephone and Telegraph Company AT & T and the Bell System operating companies.2 The complaint was predicated upon Sections 13 and 24 of the Sherman Act (15 U.S.C. §§ 1, 2) and alleged that the Bell System had monopolized and conspired and attempted to monopolize a relevant market in telecommunications service and had conspired to restrain trade in the market. The plaintiffs withdrew their Section 1 claim at status call on September 2, 1981 (Tr. 7-8), and the case was submitted to the Court for trial on the merits, sitting without a jury, on the charge that AT & T had monopoly power and had misused that power through conduct alleged to violate Section 2 of the Sherman Act. For the alleged violations, the plaintiffs seek $230.2 million,4(a) for damages, which is trebled to $690.6 million pursuant to Section 45 of the Clayton Act. (15 U.S.C. § 15). After waiver by both parties of jury demands, trial commenced on May 10, 1982.6 SPCC completed its presentation of evidence, including the testimony of 24 witnesses and approximately 1,400 exhibits, on June 14, 1982. The trial consumed thirty-three trial days for both sides, including opening and closing arguments.

Defendants filed a motion for involuntary dismissal under Rule 41(b) of the Federal Rules of Civil Procedure on June 8, 1982, and filed supplementation and proposed findings of fact and conclusions of law on June 12, 1982. Plaintiffs filed their memorandum in opposition on June 15, 1982, after which the Court heard oral argument on defendants' motion. On June 21, 1982, the Court announced its decision to defer ruling on defendants' motion until it had heard all of the evidence.

Defendants began presenting their evidence, which included testimony of 1477 witnesses and introduction of over 7,900 exhibits on June 23, 1982, and concluded their case on July 2, 1982, after only eight trial days. Plaintiffs presented their evidence in rebuttal on July 9 and 12, 1982, through the testimony of nine witnesses. On July 13, 1982, plaintiffs introduced 326 rebuttal exhibits and defendants introduced 23 surrebuttal exhibits. Both parties filed proposed findings of fact and conclusions of law on July 15, 1982, and reply findings on July 17, 1982. The Court heard oral argument on July 19, 1982.

The following memorandum opinion shall constitute the Court's findings of fact and conclusions of law, as mandated by Rule 52(a) of...

To continue reading

Request your trial
33 cases
  • TOTAL TELECOM. v. American Tel. and Tel. Co.
    • United States
    • U.S. District Court — District of Columbia
    • 5 Marzo 1996
    ...is required only when the FCC so directs it; and courts have so interpreted Section 201(a). See e.g., So. Pac. Comm. Co. v. AT & T, 556 F.Supp. 825, 975 (D.D.C.1983), aff'd, 740 F.2d 980 (D.C.Cir.1984), cert. denied, 470 U.S. 1005, 105 S.Ct. 1359, 84 L.Ed.2d 380 (1985); Woodlands Tel. Corp.......
  • In re Dealer Mgmt. Sys. Antitrust Litig.
    • United States
    • U.S. District Court — Northern District of Illinois
    • 21 Enero 2022
    ...but-for-world assumes little competition in a ‘supposedly much more attractive environment.’ " Id. (quoting S. Pac. Commc'ns Co. v. AT&T Co. , 556 F. Supp. 825, 1077-78 (D.D.C. 1982) ). Assuming this is correct, Defendants have not pointed to concrete evidence that competition to Authentico......
  • Southern Pacific Communications Co. v. American Tel. and Tel. Co.
    • United States
    • U.S. Court of Appeals — District of Columbia Circuit
    • 26 Junio 1984
    ...him sustained, and the cost of suit, including a reasonable attorney's fee." 15 U.S.C. Sec. 15(a) (1982).2 Southern Pacific Communications Co. v. AT & T, 556 F.Supp. 825 (D.D.C.1982) (as amended Jan. 10, 1983) (hereinafter cited as Mem.Op.).3 This case principally involves three types of pr......
  • U.S. Football League v. National Football League
    • United States
    • U.S. Court of Appeals — Second Circuit
    • 10 Marzo 1988
    ...744 F.2d 917 (2d Cir.1984), cert. denied, 469 U.S. 1211, 105 S.Ct. 1181, 84 L.Ed.2d 329 (1985), and Southern Pacific Communications Co. v. AT & T Co., 556 F.Supp. 825, 913 (D.D.C.1982) (rejecting testimony of plaintiff's expert Owen, in part because of role as government economist favoring ......
  • Request a trial to view additional results
5 books & journal articles
  • Table of Cases
    • United States
    • ABA Antitrust Library Telecom Antitrust Handbook. Third Edition
    • 9 Diciembre 2019
    ...2011), 138 Southern Motor Carriers Rate Conference, Inc. v. United States, 471 U.S. 48 (1985), 350 Southern Pac. Commc’ns Co. v. AT&T, 556 F. Supp. 825 (1982), 282 Southern Pac. Commc’ns Co. v. AT&T, 740 F.2d 980 (D.C. Cir. 1984), 81, 127, 128, 129, 135, 140, 146, 382 Southwest Tel. & Tel. ......
  • Quantifying Damages
    • United States
    • ABA Antitrust Library Proving Antitrust Damages. Legal and Economic Issues. Third Edition Part II
    • 8 Diciembre 2017
    ...on survey of customers); Park v. El Paso Bd. of Realtors, 764 F.2d 1053, 1066-68 (5th Cir. 1985); Southern Pac. Commc’ns Co. v. AT&T, 556 F. Supp. 825, 1073-90 (D.D.C. 1983), aff’d , 740 F.2d 980 (D.C. Cir. 1984). 47. See, e.g. , Southern Pac. Commc’ns , 556 F. Supp. at 1092-93 (stating tha......
  • Table of Cases
    • United States
    • ABA Antitrust Library Proving Antitrust Damages. Legal and Economic Issues. Third Edition Part III
    • 8 Diciembre 2017
    ...(6th Cir. 1983), 27 Southeastern Milk Antitrust Litig., In re , 739 F.3d 262, 284 (6th Cir. 2014), 9 Southern Pac. Commc’ns Co. v. AT&T, 556 F. Supp. 825 (D.D.C. 1983), aff’d , 740 F.2d 980 (D.C. Cir. 1984), 98, 99 Southwestern Sheet Metal Works v. Semco Mfg., 788 F.2d 1144 (5th Cir. 1986),......
  • Mergers
    • United States
    • ABA Antitrust Library Telecom Antitrust Handbook. Third Edition
    • 9 Diciembre 2019
    ...of Video Programming, Sixteenth Annual Report, 30 FCC Rcd. 3253, 3256-59 ¶¶ 2-11 (2015)). 223. See Southern Pac. Commc’ns Co. v. AT&T, 556 F. Supp. 825 (1982) (rejecting claim of barriers to entry based on $100-$200 million required to put up satellites necessary for telecommunications netw......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT