Former American Telephone and Telegraph Co. chairman John DeButts insisted today that his company was under no obligation to provide MCI Communications Corp. with hookups to specialized telephone services under a controversial 1971 government decision that opened the industry to competition.
DuButts came under intense cross examination here during the second and final day of his testimony in MCI's $2.7 billion antitrust suit against AT&T.
DeButt insisted that AT&T had no doubt that the Federal Communications Commission decision forced the Bell System to provide MCI and other firms with "local loops" that would connect MCI customers with a long-distance telephone service. The debate, however, concerns MCI's contention, later upheld by a federal court, that AT&T competitors were entitled to these connections.
Further DeButts also denied that an Oct. 19, 1973, letter from Bernard Strassburg, who then headed the FCC's Common Carrier Bureau, which said that MCI and other carriers were entitled to those services, clearly laid out AT&T's obligation. DeButts said the letter "did not have the authority of the commission."
A major MCI contention in the case is the charge that AT&T did not provide these specialized services, therefore preventing the Washington-based company's growth during the early 1970s.
THOSE SERVCES, INCLUDE "FX" service, the telephone link that allows customers to dial a local number and reach another city. That service is widely used by the airline industry, for example.
U.S. District Judge John Grady pointed out that AT&T had the right to deny those services while appealing the FCC decision in federal court. "Everybody has the right to go to court, but that doesn't mean you don't have to pay the piper," Grady said, addressing the 12-member jury in the case.
Grady also pointed out later that AT&T, which claims that legal experts insisted it did not have to offer the services, should not solely be judged on the benefit of hindsight.
DeButts was AT&T's second witness in teh presentation of its case, which opened Monday after a five-week recess. AT&T is expected to take about five weeks to present its case, one week less than MCI needed for its own presentation.
The landmark antitrust suit revolves around MCI charges that AT&T set out to hamper MCI's initial growth years in the early 1970s by not providing interconnections, by continual harassment, and the development of new rate systems which undercut MCI's own rates.
DeButts, who at one point engaged in a shouting match with MCI attorney Robert Hanley, did not budge from his position on the hook-ups. He described two meetings with MCI Chairman William McGown, one in 1972 and the second the following year. DeButts called the first meeting "cordial."
But he characterized McGowan as "antagonistic" during their second meeting in March 1973. DeButts said McGowan threatened AT&T with legal action if the Bell System did not provide the hookups. DeButts said McGowan pointed out that MCI has "better relations with the FCC than we did and he wanted me to know they had a lot of friends in Washington.
DeButts insisted that "we would not fall for threats. There was no question in my mind" that MCI had no right to the specialized services.
But DeButts also said that McGowan "told me he didn't feel he had a viable operation" without those services. MCI atorneys, however, said that notes from that meeting taken by AT&T Vice President George Cook never mentioned that McGowan claim that his business might not succeed. The notes, introduced in an exhibit, never mentioned that particular McGowan statement.