U.S. West Fined $10 Million in Antitrust Case
U.S. West, which operates three Western telephone companies, will pay a $10-million civil fine--the largest sum ever obtained in an antitrust contempt case--for violating the 1982 agreement that broke up the American Telephone & Telegraph monopoly, the Justice Department announced Friday.
U.S. West, one of seven regional Baby Bell holding companies created by the AT&T; divestiture, admitted to four violations of the 1982 consent decree. The agreement prohibits the seven Baby Bells from engaging in certain lines of businesses and from discriminatory practices in providing telecommunications services.
The company, based in Englewood, Colo., said in a prepared statement that the infractions were inadvertent and were discontinued some time ago.
“We regret these violations,” said Larry DeMuth, U.S. West’s chief counsel. “We didn’t willfully violate the (consent decree) but these four activities . . . were in conflict with the decree, which is a complex document governing a large and complicated industry.”
The most serious violation acknowledged by U.S. West involved the sale of switching services to the federal government at cut-rate prices in 1985. The firm anticipated sales of $16 million over three years by providing the services to the General Services Administration in Denver, Albuquerque, Phoenix and Salt Lake City, the Justice Department said.
“A consent decree is the law,” said James F. Rill, assistant attorney general for the antitrust division. “This settlement makes clear to U.S. West and other parties to the decree that disobedience . . . has severe consequences.”
Rill said the enforcement order establishes mechanisms within U.S. West to ensure future compliance with the decree. The fine is the largest sum the antitrust division has ever obtained from a single defendant, the Justice Department said.
The $10-million agreement was approved Friday by U.S. District Judge Harold H. Greene, who ordered the breakup of AT&T; in 1982 following a landmark trial. Greene continues to supervise disputes stemming from the divestiture.
U.S. West, which operates Pacific Northwest Bell, Northwestern Bell and Mountain Bell, has admitted that it violated provisions of the original decree between 1984 and 1989 by doing the following:
* Employing discriminatory pricing by offering the GSA access to local exchange facilities at a lower price if the agency purchased switching services from U.S. West rather than AT&T.;
* Providing reverse directory services, which supply a customer with the name, address or both of a telephone subscriber rather than a telephone number. All three U.S. West subsidiaries provided this service.
* Selling computer management services--including computer hardware, personnel and other support--to operate Atlantic Richfield Co.'s Paypoint debit card system, through a subsidiary.
* Designing, developing and marketing operator workstations.