One of the chief negotiators of the Justice Department's landmark divestiture agreement with American Telephone & Telegraph Co. said yesterday that on the whole, he was pleased with a federal judge's decision earlier this week that upheld the basic thrust of the plan.
However, Ronald A. Carr, deputy assistant attorney general in the Antitrust Division, said that there were a few features of the judge's order that require "careful thought" before the Justice Department decides whether it can accept the changes in the divestiture plan called for by U.S. District Judge Harold H. Greene's order.
In a decision handed down Wednesday, Greene said that overall he approved of the Jan. 8 divestiture plan that requires AT&T to spin off its 22 wholly owned local telephone companies.
However, Greene refused to give his necessary signature to the agreement until Justice and AT&T made major changes to the plan to offer more protection to AT&T's emerging competitors and local telephone customers.
"Most of the things the judge has recommended are not troubling at all," Carr said. "The changes the judge has in mind certainly don't go to the central feature of the decree. However, they depart on a couple of points that we thought were appropriate.
"How significant a departure is what we are now studying," he said. "In the overall scheme, they may be relatively minor. We just have to think it through very carefully."
AT&T and Justice lawyers probably will meet early next week to discuss their options, said Carr, who added "there is no doubt" that the two sides will be able to meet the Aug. 26 deadline the judge has set for replying to his order.
Of particular concern to Justice is Greene's requirement that the plan be changed to allow the divested local companies to sell telephone equipment.
From the day the agreement was signed, Assistant Attorney General William F. Baxter has argued repeatedly that local companies should be barred from selling telephone equipment and from other competitive activities because of their continued monopoly over local telephone service.
That monopoly control could, in turn, give local companies the power to block, or at least hurt, firms that were seeking to compete with them, Baxter has charged.
Because of Baxter's strong arguments against giving the local companies the ability to sell telephone equipment, communications lawyers have predicted that it is this provision, more than any other, that could be the main sticking point in Justice's decision on whether to go along with Greene's order.
But Carr said there were other changes Greene wanted that the Justice Department needed to study before agreeing to modify the agreement.
One of the changes would bar AT&T from entering the electronic publishing business for at least seven years. The plan drawn up by Justice and AT&T would not have barred AT&T from entering any business activity.
"We need to make sure we understand the implications" before making the change, Carr said.
The same is true of the judge's order that he be given greater power to oversee the divestiture plan than AT&T and Justice had called for, Carr said.