Testimony in the four-month-old $2.7 billion anti-trust suit brought by MCI Communications Corp. against American Telephone & Telegraph Co. ended today as the Bell System tried to show that long-distance telephone services in effect have subsidized basic residential operations.
AT&T introduced a 1975 study which indicated that residential revenues pay for only a fraction of the phone company's cost in producing basic home telephone service.
U.S. District Court Judge John Grady permitted introduction of the testimony only after several months of controversy in the case about whether evidence involving residential telephone service could be presented to the jury. MCI lawyers had argues that residential service costs are irrelevent to the crux of the lawsuit.
In this case -- the first of two landmark antitrust suits brought by MCI against AT&T -- the Washington-based company has alleged that AT&T violated federal anti-trust laws between 1971 and 1974 by failing to provide MCI with a series of hookups that would permit the firm to develop its long-distance business telephone service.
MCI immediately challenged today's evidence, which was introduced in testimony by Richard Ginthner, AT&T's director of operations and planning.
During cross-examination by an MCI attorney, Ginthner said the 1975 study wasn't intended to forecast AT&T's future cost and revenues, although it was prepared in large part to gauge the possible effects of Federal Communications Commission and court decisions which opened the industry to competition from firms like MCI.
Referring to a chart shown to the jury, Ginthner said that an estimated 79 percent of the costs of providing basic telephone service came from money generated by other types of long-distance telephone services.
Ginthner said the study pointed out "what the impact would be for residential subscribers" if customers "had to pay the full cost" of local telephone service.
But MCI pointed out that AT&T also is entitled to receive long-distance rate increases, if approved by the FCC. In fact, AT&T will receive a $500 million rate increase this week, an MCI lawyer noted.
Ginthner, the final witness in the case, took the stand after Grady, in a session in his chambers, threw out AT&T's efforts to seek a multi-million-dollar counterclaim against MCI. No public reason was given today for Grady's decision.
Grady also refused to grant either side a directed verdict from the bench on any of the charges which will be studied by a 12-member jury next week.