The Federal Communications Commission may decide today to open its files to respond to American Telephone & Telegraph Co. allegations that the agency improperly leaked sensitive information to MCI Communications Corp. in the mid-1970s.
"AT&T discovered that MCI had been privy to certain information about FCC decisions prior to the FCC taking them and may have improperly influenced what was going on," an FCC source said.
The issue, which is expected to be taken up by the commission at a meeting today, could provide ammunition for AT&T in an antitrust case brought by MCI and yet to go to trial.
In 1974, the FCC found that AT&T had improperly denied MCI interconnections so it could complete certain private-line business calls and ordered AT&T to provide the connections. The decision eventually was used by MCI in a 10-year antitrust suit against AT&T.
AT&T is concerned that they were "unduly exposed to an antitrust liability because of that order" which concluded they improperly denied the connections to MCI, said another agency source. "There may be more orders in question before we get through."
Sources at the FCC said AT&T is alleging that during the discovery process of the antitrust suit subsequently brought by MCI, it found a pre-release copy of the order in MCI Chairman William McGowan's file drawer.
It is not clear whether the order, which had "underlinings and scribblings," had been voted on by the commission but not made public at the time MCI received the document, an agency source said. AT&T and the regional phone companies also are concerned that MCI may have unduly influenced the commission prior to its decision, the source said.
"AT&T and the Bell System companies have in the course of events undertaken a discovery of materials at the commission related to the subject of the private lawsuits and the materials as they affect regulatory proceedings and the conduct of those proceedings," said AT&T spokesman Herb Linnen. AT&T declined to elaborate further. MCI declined comment yesterday.
"The Bell operating companies and AT&T informally approached the commission about reviewing files , and the commission has been forthcoming in its dealings," said a spokeswoman for Bell Atlantic Corp., the regional phone company that owns Chesapeake & Potomac Telephone Co. "We look forward to reviewing the files if they release them to us."
The regional phone companies and AT&T felt "all the pertinent documents hadn't been discovered" during the course of the 10-year antitrust case between MCI and AT&T, she said.
In the antitrust case, MCI charged AT&T and the regional Bell operating companies (then the Bell System) had stifled MCI between 1969 and 1975. In 1980, MCI was awarded $600 million, trebled to $1.8 billion in damages, but the case was appealed and the award reduced last May to $37.8 million, trebled to $113.4 million. A second MCI-AT&T antitrust suit for the period 1975 to the present has yet to go to trial.
FCC sources said AT&T and the Bell operating companies had "discussed informally the possibility of taking depositions from people who were here [at the agency] at the time." The agency will conduct its own investigation "if further evidence indicates there is something to it," said Jack Smith, general counsel for the FCC.
FCC sources said both MCI and AT&T had been through agency files many times before in the course of the antitrust trial. "At least 93 cubic feet of files is what they have been through; this is one more go-around," said an FCC source.
Bernard Strassburg, a lawyer who headed the common carrier bureau in the early 1970s, said yesterday that in 1973 MCI asked him for an opinion confirming that the business services in question were within the scope of the FCC's policy and therefore to be legitimately connected by AT&T.
MCI was "having difficulties with AT&T for getting interconnections" for specific business services, he said. "I did confirm" the services were within FCC regulations, he said. Strassburg also said he had meetings with MCI, but also met with AT&T. "I did meet with them, and did meet with AT&T a lot too -- bureau chiefs do that."
At the time, however, nothing formal was before the FCC on the issue of the specific business services and interconnection, Strassburg said. The agency ruled on the issue sometime in 1974, after Strassburg left the agency, he said.