MCI’s Damage Award From AT&T; Slashed
MCI Communications’ record $1.8-billion victory over American Telephone & Telegraph, which was overturned, was whittled today to $113.1 million as a second jury found that AT&T; conspired to keep MCI out of the long-distance phone market in the 1970s.
The jury awarded MCI nearly $37.7 million, which under federal antitrust laws was automatically tripled to $113.1 million. The award was far below the voided $1.8 billion awarded by a jury in 1980--the largest award in U.S. history.
MCI had sought $5.8 billion.
AT&T; will be responsible for about 30% of the damages, with the rest shared by the regional companies created after the breakup of AT&T; last year.
3 Days of Deliberations
The decision by the 11-member jury followed three days of deliberations after nearly seven weeks of proceedings before U.S. District Judge John F. Grady.
MCI contended that AT&T; in the early 1970s denied it intracity phone connections that MCI said were needed to complete long-distance telephone calls on its own microwave network. As a result, AT&T; caused it to lose $2.9 billion in profits, MCI charged.
During closing arguments, MCI attorney Chester Kamin, called AT&T;’s actions “a calculated and coldblooded” attack in denying MCI access to local phone lines.
Kamin said AT&T; sought rulings by individual state commerce commissions in 1973 to stymie MCI’s efforts when AT&T; knew that those commissions had no jurisdiction in the cases.
Had to Lay Off 200
As a result, MCI said, it had to lay off 200 of its 700 workers because it could not provide service without the interconnections.
Kamin also traced the history of the case back to 1968 when MCI was founded by MCI President William McGowan, who wanted to establish a microwave telephone system.
He said that McGowan received approval from the Federal Communications Commission but that AT&T; conducted bad-faith negotiations on the issue of providing MCI with the interconnections and tried to delay the upstart firm from entering the long-distance market.
AT&T; attorney M. Blair White said AT&T; was liable for some antitrust violations from 1972 through 1974, but he argued that the amount of damages MCI was seeking was unreasonable and based on false assumptions. White said AT&T; should only be liable for about $10 million in damages.
Personal Stake Charged
White also charged that some of MCI’s witnesses had a personal stake in the trial and that McGowan stood to receive $116 million if the jury awarded the full $5.8 billion sought by MCI.
In the first trial in 1980, a jury found AT&T; guilty of 10 of 15 antitrust counts and awarded MCI $600 million in damages, which under antitrust laws were tripled to $1.8 billion.
But the U.S. Court of Appeals in 1983 overturned three of the antitrust counts, vacated the damage award and returned the case for a redetermination of damages.
