The chief executive of American Telephone & Telegraph Co. denied yesterday that the company ever "offered" to divest Western Electric Co., challenging a Reagan administration report which suggested the company had proposed a break up of the company four years ago as part of an antitrust settlement.
"We have never offered to divest the Western Electric Co. and we never intend to because integrated nature of the Bell System has always been essential and is even more so today," said AT&T Chairman Charles Brown.
Brown's prepared statement was released in response to a story in yesterday's editions of The Washington Post, which quoted a report of the Reagan administrationhs telecommunications task force. That report suggests that AT&T lawyers had agreed to divest pieces of Western Electric in 1977 and 1979 in efforts to settle the Justice Department's antitrust case against the Bell System.
But AT&T's statement only addressed 1977 negotiations and, calling the 1979 discussions "private," Brown said "a number of proposals were made during that period."
Knowledgeable sources defended the basic thrust of the administration document, but suggested that the language in the report about of the seriousness of earlier settlement talks might have been overstated. Sources said that AT&T lawyers had, in 1979, agreed to the essence of a divestititure proposal involving pieces of Western Electric. The company's management, however, had not approved that plan, sources said.
The task force report, the primary administration document used in formulating its position on AT&T matters, said that the 1979 proposed settlement "would have entailed the divestiture of assets possibly exceeding $20 billion."
Meanwhile, there was growing congressional concern yesterday about the Justice Department's announcement Wednesday that the government would drop its antitrust suit against AT&T if Congress passed telecommunications legislation that the administration believes would solve the competition problems raised in the suit.
Sen. Slade Gorton (R-Wash.), speaking during a Senate Commerce Committee hearing, was critical of efforts to drop the case, as was Sen. Arlen Specter (R-Pa.), a member of the Senate Judiciary Committee.
Specter said he is "strongly opposed" to the government's move to delay the AT&T trial. "I feel the prosecution should be vigorously and expeditiously pursued," Specter said in a speech prepared for delivery on the Senate floor.
Specter said the Justice Department request for delay "is grossly inconsistent with the interest of the American people who depend upon the operation of three co-equal branches of government."
In another development involving AT&T, a class action suit was filed yesterday in federal court here on behalf of users of telephone equipment seeking damages stemming from AT&T's earlier policies of requiring the use of special devices to attach non-AT&T equipment to the telephone network. Damages could reach $100 million, one attorney involved in the suit suggested.