AT&T; cleared in rate-fix case
AT&T; Inc. didn’t conspire to fix the rate for long-distance surcharges paid by customers, a Kansas jury said Wednesday, rejecting a $400-million claim against the largest U.S. telephone company.
The federal jury in Kansas City, Kan., also ordered AT&T; to pay $16.9 million to California residential customers who accused the company of breach of contract in the same trial.
Business customers had sued in a national class action, claiming that one of Dallas-based AT&T;’s predecessor companies violated U.S. antitrust law by fixing prices for Universal Service Fund surcharges from August 2001 through March 2003.
“We’re gratified that the jury correctly found no evidence of antitrust activities,” said Marty Richter, an AT&T; spokesman. “We’re studying our options on the breach-of-contract ruling involving California residential customers and continue to believe we acted properly.”
The suing businesses haven’t decided whether to appeal the jury’s decision rejecting antitrust claims, said their lawyer, Joseph Goldberg, whose clients alleged that AT&T; Corp. conspired with Sprint Communications Co. and MCI WorldCom Network Services Inc.
SBC Communications Inc. acquired AT&T; Corp. in 2005 and changed the combined company’s name to AT&T; Inc.
AT&T; didn’t know what the other two companies were doing and acted unilaterally in passing on the surcharges to customers, AT&T; lawyer Charles Douglas said during the trial.
“You can’t conspire with yourself,” he told jurors.
Phone companies are required by federal law to pay a specific amount of long-distance revenue into the Universal Service Fund, which helps provide phone service for rural areas, low-income customers and schools and libraries. Most carriers pass the charge on to customers.
The three companies conspired to charge customers no less than 100% of what the companies had to pay into the fund, effectively fixing prices and overcharging, Goldberg said in closing arguments.
Sprint previously settled, agreeing to provide $25 million in prepaid phone cards to its customers.
MCI wasn’t a party to the suit because it filed for bankruptcy protection in 2002.
U.S. District Judge John Lungstrum earlier threw out the claims of antitrust violations after March 31, 2003, as well as the business customers’ breach-of-contract claims.
