The Justice Department is evaluating complaints by American Telephone & Telegraph Co. that one of its offspring is providing long-distance phone service in violation of the terms of the agreement that broke up the Bell System.
AT&T filed its complaint Oct. 17, when it asked U.S. District Judge Harold H. Greene to order Pacific Northwest Bell Telephone Co., a local Bell telephone operating company in Oregon, to stop providing long-distance telephone service to state government offices. AT&T contended that Pacific Northwest Bell was violating the terms of the Bell System breakup, over which Judge Greene presided.
Judge Greene asked the Justice Department to examine the charges and make a recommendation to him.
"In our opinion, they are providing long-distance service," said Edith Herman, a spokeswoman for AT&T. "We believe this violates the consent decree."
"We don't feel we are in violation of the modified final judgment at all," said a spokesman for Pacific Northwest Bell, which is a subsidiary of US West, a regional holding company. While the spokesman would not comment further, he said the company would respond to AT&T, via Judge Greene, in mid-November.
An integral part of the breakup was a rule that local telephone companies may not provide long-distance service beyond the boundaries of their local service areas. Judge Greene has said that he would not even consider requests by the local companies to re-enter the long-distance business until he thought there was sufficient competition in both the long-distance and local marketplaces.
An official of the Justice Department, which brought the antitrust case that was settled by the telephone system breakup, said yesterday the situation raises serious policy questions about competition in the telephone industry.
"We want to encourage Bell operating companies to provide exchange services within their local service areas; . . . on the other hand, the issues which AT&T raised of discrimination and of engineering and intentionally operating a long-distance network raise very serious allegations under the decree."
The Justice official said AT&T charged that Pacific Northwest had reconfigured a private telephone network for the state of Oregon to eliminate the need for all but a small, AT&T-handled portion of long-distance traffic between state offices. While the company may not be technically providing long-distance service, the official said Pacific Northwest Bell could easily provide it. "It does move them functionally closer to providing a long-distance network, which is prohibited by the consent decree which broke the system up," he said.
"Our concern is to make the long-distance business as competitive and vigorous as possible, and that involves reserving to long-distance companies the business to compete for," the Justice official said.