A federal judge yesterday denied American Telephone & Telegraph Co.'s motion to dismiss the Justice Department's antitrust suit against it, dealing a setback to the Bell System's efforts to win a quick victory over the government.
In denying the motion, U.S. District Court Judge Harold Greene clearly asserted that AT&T, which is presenting its defense in the case, must refute dozens of government antitrust charges.
"The testimony and the documentary evidence adduced by the government demonstrate that the Bell System has violated the antitrust laws in a number of ways over a lengthy period of time," Greene wrote, in his sharpest support yet issued for the government's case.
Greene said that on three principal issues of the seven-year-old antitrust suit -- AT&T policies on connecting non-Bell System equipment and competing long-distance systems to the local telephone network and procurement of equipment -- "the evidence sustains the government's basic contentions, and the burden is on defendants to refute the factual showings made in the government's case."
The decision is a boost for the morale of members of the Justice Department's AT&T trial team, who have been assured by the Antitrust Division's leadership that passage of telecommunications legislation which would leave the company intact probably would result in the case being dropped. The government has been pressing for a breakup of AT&T since the case was filed.
But Greene did toss out three parts of the government's case. One deals with allegations concerning AT&T's maintenance of a Bell System market. The second concerns allegations of improper sales by AT&T's equipment-manufacturing arm, Western Electric Co., to AT&T's local telephone companies. The third consists of several charges that AT&T filed statements with the Federal Communications Commission designed to maintain certain service and product monopolies.
Gerald Connell, the Justice Department's lead attorney in the case, said he was very pleased with Greene's ruling "because the decision, with a few exceptions, says that the government's case is a strong one. The case is there, and the case for divestiture as relief is there."
Pickard Wagner, a spokesman for AT&T, said that despite three sections of the case being thrown out, the company is "not claiming victory on anything.
"What the judge's order means is that we have to go forward with our proof on the remaining issues, and that's exactly what we intend to do," Wagner said. "We certainly would have had more cause to rejoice if he had followed our request to toss the case out. But he didn't, and we accept it." The ruling cannot be appealed until a decision is rendered in the broader case.
Greene emphasized in court that his statements in the decision suggesting that the government had made a credible case only indicate that AT&T must disprove the government's contentions. "It is absolutely clear the American way is you have your chance and you can disprove, and I think the opinion says that in at least 15 different places," Greene said to Saunders.
But Greene's ruling does contain numerous examples of support for the thrust of the government's presentation.