Judge Curbs Expansion by Former Bell Units

The judge who presided over the breakup of the Bell System restricted on Monday the ability of the seven regional Bell telephone companies to diversify, accusing some of them of “conglomerate ambitions” and “lack of interest” in providing good, cheap local phone service.

He told them that they still must come to him for permission every time they want to enter into almost any business other than offering local telephone service.

Pacific Telesis, Ameritech and US West, three of the seven companies created by the breakup, sought authority to offer certain telephone services without having to seek specific waivers.

All three firms expressed disappointment with the decision by U.S. District Judge Harold H. Greene.

Pacific Telesis spokeswoman Ginny Juhnke said: “Our contention is that the rules didn’t require a waiver” for the company to diversify into, for example, cellular telephone and paging services outside of California and Nevada. She added that the company “just wanted clarification” of the consent decree that mandated the breakup of the Bell System.

US West spokesman Jim Smiley criticized the decision, saying it appears to be unlawful. Judge Greene “redefines, in terms of lines of business restrictions, the decree itself . . . in excess of his authority,” Smiley said.

To settle a long-running antitrust suit, American Telephone & Telegraph and the Justice Department entered into a consent decree that divided the company into separate pieces and set limits on what services each could offer. Seven regional holding companies were established to provide local telephone service.

As technology has changed since the divestiture on Jan. 1, 1984, the companies have sought waivers to enter into related and unrelated businesses. A few months ago, the same court established a detailed procedure and guidelines for the regional companies to follow in requesting waivers.

Judge Greene said the companies were trying to “undercut that process” by calling their motions requests for clarification rather than requests for waivers. Greene wrote that “these motions are inconsistent with the language, history and purposes of the decree.”

In turning down the three companies’ requests, Greene attacked the “rush to diversification” by the seven regional firms and accused them of a “relative lack of interest in basic telephone service itself.”

“There is nothing that is further from the truth,” Smiley said, calling the judge’s statement on basic service “absurd.”

Pacific Telesis sought to provide cellular telephone service outside its California-Nevada area. The company has filed a waiver request to acquire a Dallas-based cellular firm, Communications Industries.

Ameritech had asked to offer cellular telephone and other services outside its five-state area in the Midwest. And a US West subsidiary wanted to offer cellular service outside its designated area in the Rocky Mountain states.

Company spokesmen said it was too soon to tell if the decision would be appealed.