American Telephone & Telegraph Co. attorneys were warned emphatically, by a federal judge here today to refrain from "flag-waving" about the phone company's residential telephone service as former AT&T chairman John DeButts took the witness stand during the opening of the Bell System's defense in the antitrust suit brought by MCI Communications Corp.
DeButts, who resigned as chief executive last year, had just opened his testimony when he was interrupted by MCI attorneys, who objected to deButts describing how long-distance and business-phone service effectively subsidize residential phone service.
After the 12-member jury was asked to leave the courtroom, U.S. District Judge John Grady made his remarks.
"We're not going to do any flag-waving about residential telephone service," Grady said.
Grady said the "obligation of the chairman of AT&T is as a matter of law to the shareholders . . . . For him to sit up here and tell us that the obligation of the phone company" is to "Mas and Pas . . . isn't going to wash in this courtroom.
"I'm not going to let the defense turn the case into a pocketbook question for the jurors," Grady said.
DeButts, who ran AT&T from 1970 until Feb. 1, 1979, took the witness stand late today in what may prove to be the first of a series of courtroom appearances involving the approximately 50 antitrust suits against the Bell System.
The MCI case is the first of thesesuits to go to trial, and is thought to be laying much of the groundwork for the Justice Department's landmark SUIT AGAINST AT&T. The government's case, which is scheduled to begin in September, could lead to a breakup of AT&T, if the government wins.
Mci and AT&T renewed their bitter courtroom battle today in MCI's $2.7 billion antitrust suit against the Bell System after a unique five-week recess.
Lawyers for both companies traded accusations in hour-long summaries of the first four weeks of the trial. During that period MCI presented its case, charging AT&T with monopolistic practices in allegedly failing to provide MCI with interconnections needed for the Washington -based firm to provide long-distance telephone service.
Robert Hanley, an attorney for MCI, charged that AT&T repeatedly denied MCI those hookups despite a 1971 Federal Communications Commission decision and subsequent FCC and court decisions, which MCI claims ordered Bell to provide the interconnections.
The MCI attornery outlined a series of actions by AT&T including "charade negotations, installing new below-cost rates designed to drive MCI out of business, and policy decisions at AT&T's highest management levels designed to ruin MCI.
"We don't rest our case on the bigness of AT&T," Hanley said. "It is this leverage against Mci which is the key."
But Hanley's summation was sharply attacked by George Saunders, At&t's lead counsel in the case. Saunders characterized Mci's case as primarily innuendo, designed to "put the defendants on the defensive." The charges against AT&T are "shallow and superficial," Saunders said. "They want $900 million," he said. "If it weren't serious it would be a joke. It would be an absolute joke."
Saunders said that MCI had set out on a campaign to make AT&T a scapegoat for Mci's financial troubles in the early 1970s, the period covered in the lawsuit.
Saunders said that MCI's is a phony issue. "Can you really believe there is not one, not one (AT&T employe) who would or did reach out a helping hand to these people?" he said.
Saunders said the essence of Mci's case is that AT&T workers "stood up for what they believed."