A private antitrust suit that should provide a gauge of the strength of the federal government's controversial attempt to break up American Telephone & Telegraph Co. will go to trial tomorrow in Chicago.
The suit, MCI Communications Corp. vs. AT&T, is viewed as the most significant of nearly 50 antitrust suits pending against the telephone giant yet to go to trial. AT&T, which had sales of $36.5 billion last year, is the nation's largest company with assets of more than $100 billion.
At stake in the MCI suit are millions of dollars in damages that are expected to be sought by MCI Communications Corps., the Washington-based telecommunications company. MCI is challenging AT&T's alleged monopoly over the nation's long-distance business communications system in an antitrust case filed five years ago. MCI is expected to ask for one of the largest settlements in anti-trust history.
In this case, MCI is alleging that between 1971 and 1974 -- the years the company entered the long-distance, private-line business in the Midwest, AT&T, through its control of interconnections into these long-distance systems, prevented MCI from gaining access to these lines.
MCI, the brainchild of its president, William McGovan, is an 11-year-old company with revenues approaching $100 million. It offers voice and date services to business and government customers. Although MCH's size may not cause AT&T to tremble, the lawsuit coming to trail tomorrow has serious implications for the telephone giant and its expanding competitor.
Beside the millions of dollars in damages MCI will ask a jury to turn over, the case could have other consequences. For example, MCI has been given access to a wide variety of AT&T documents, many of which are expected to become public during the course of what could be a nine-month trial before U.S. District Judge John F. Grady.
Those documents are expected to provide a revealing glimpse of ATT's internal decision-making and to lay the groundwork for the Justice Department's antitrust case against AT&T, which calls for the breakup of many components of Bell's production, distribution and network management systems. The government's case is schedled to go to trial here in September.
And it is AT&T's long-distance business that has provided the company's with the heart of its staggering growth and accompanying profitability in the past 20 years.
The case is the first of two major antitrust actions brought against AT&T by MCI. The second, filed here earlier this year, alleges anticompetitive practices by the Bell System after 1974 and expands MCI's complaint into the broader long-distance market.
MCI's first big push in challenging AT&T took place in the Chicago-St. Louis market, where the company constructed a city-to-city microwave system for businesses. MCI brought the case in Chicago for that reason and because it has retained the prestigious firm of Jenner & Block to handle the AT&T suit.
The Bell System interconnections in question are a series of switching devices and other equipment that a competing company like MCI must use to like these business and government communications systems.
The MCI allegations revolve around charges that AT&T "illegally and unreasonably" controlled its Bell System subsidiaries to prevent access to that equipment and that, even when that access had been negotiated, the facilities were furnished under "unilaterally determined, artificial, arbitrary and discriminatory conditions."
Further, MCI is charging that AT&T set up procedures for evaluating MCI requests that established patterns to "foster delay and harassment" in providing these vital interconnections.
According to the suit, AT&T also discriminated against MCI in selecting the facilities it would allow the company to use, increasing MCI's costs and altering the company's ability to compete. ATT "intentionally interfered, directly and indirectly" with MCI's relationships with its customers, MCI said.
In addition, the telephone giant has delayed MCI's expansion in the field through "repetitive and sham proceedings" before state and federal government agencies with the intention of "suppressing and destroying" MCI's growth.
AT&T, which is retaining another top Chicago law firm, Sidley & Austin, for the case, may call as many as 97 witnesses to the stand during the trial, while MCI expects to seek testimony from about 17 persons. MCI's witnesses are primarily company employes. In explaining and defending its operations, and relationships with state and federal regulatory bodies, AT&T will bring a number of well-known figures for their expert testimony.