American Telephone & Telegraph Co., through a variety of policy decisions and pricing practices, "decided to choke off" MCI Comminucations Corp., an attorney for MCI charged today in asking a jury to award $900 million to the Washington-based telecommunications firm.
The statement by MCI attorney Chester Kamin, came during opening arguments of MCI's massive antitrust suit against AT&T and its Bell System subsidiaries.
During the years since MCI filed the suit in 1974, AT&T earned about $200 billion in long-distance business service revenues, Kamin said.
Although MCI had said in a court document that it would seek $1.057 billion in damages, that figure was lowered after company analysts examined operational and tax costs resulting from the alleged loss of business.
Kamin said the $900 million figure represents revenues the company would have earned if "AT&T had obeyed the law."
Another MCI lawyer, Robert F. Hanley, like Kamin a member of the Chicago firm of Jenner & Block, told the jury that AT&T was "about able to run MCI out of the market before they even got started."
The case revolves around AT&T practices with respect to interconnections MCI needed to gain customers in the long-distance business communications industry. MCI attorneys ran through a chronology of AT&T practices which they claim stunted MCI's growth since its founding 11 years ago.
Hanley charged that MCI and AT&T officials sat down to work out a contract about 10 years ago that would have allowed MCI to provide services to about 170 communities. But AT&T negotiators adopted "tactics of delay" and ultimately "just got up and walked out" after a year of talks.
Then, Hanley said AT&T filed rate requests before each state regulatory agency in the country designed to make MCI's growth more difficult. But the Federal Communications Commission, which has some regulatory authority over these services, told AT&T to make the interconnections available.
In addition, MCI attorneys charged that AT&T put restrictions on the distances over which it would provide the services and, after a series of court decisions and seven days before an FCC decision affirming MCI's right to the services, AT&T "ripped out all the interconnections they had connected."
Furthermore, Kamin told the jury that documents obtained from AT&T will prove that AT&T then put into effect a so-called "Hi-Lo" pricing policy which was designed to "choke off MCI."
This pricing policy cut AT&T prices in locations where MCI had hoped to compete, and forced MCI to curtail ambitious construction plans, conserve money, and lay off one-third of its work force, Kamin said.
MCI opening argumentns followed a morning of jury selection before U.S. District Court Judge John F. Grady.
Within four hours of bringing a jury panel of about 70 people into the courtroom, a jury of 5 men and 7 women were selected by the parties in the case.