A federal court judge tonight ordered American Telephone and Telegraph Co. to pay $1.8 billion in damages to MCI Communications Corp.
The order by U.S. District Court Judge John F. Grady came after a jury decided MCI suffered $600 million in damages when AT&T denied intracity phone connections needed to complete long-distance telephone calls on MCI's microwave network. The jury found the communications giant had violated federal antitrust laws in denying the connection.
At&t immediately said it would challenge the verdict. "We are disappointed by the jury's verdict and will seek to have it overturned," said Ormand J. Wade, an AT&T vice president.
AT&T attorney George Saunders said it was the largest damage verdict in history -- "this one will make the Guinness Book of Records."
The jury in its verdict said that AT&T willfully maintained or attempted to maintain a monopoly on long distance calls. The jury of seven women and five men began its deliberations Wednesday after four months of often complex testimony.
The award of $1.8 billion was based on requests for treble damages by MCI, a Washington-based microwave telecommunications company.
William G. McGowan, MCI chairman, said the verdict, in which AT&T was charged with monopolizing the country's long-distance telephone market, showed that the jury "will not allow the biggest corporation in the world to use its power to try and stifle its competitors in this business."
The judge gave AT&T 30 days in which to file post-trial motions after Saunders said the jury's damage finding was not consistent with some of its other findings.
MCI charged AT&T in 1974 with monopolizing and attempting to monopolize the private interstate telephone market under Section 2 of the Sherman Antitrust Act.
MCI brought the suit after AT&T allegedly refused to supply interconnection to the fledgling MCI long-distance service. That system bypasses the At&t long-distance network by using microwave communications but depends on AT&T companies for delivering the call through local Bell System central offices.
AT&T contends it did not have any regulatory obligation to offer such services to MCI.
Interconnection, MCI argued, was ordered in a 1971 decision by the Federal Communications Commission. That decision, AT&T contended, did not order it to supply interconnections nor to offer specific services to MCI.
A second MCI suit, concerning the period after 1974 and involving heavy financial damages, is pending before a federal court in Washington.
The case decided tonight was the first of more than 30 civil antitrust cases by AT&T competitors to go to court and was viewed as a test of strength of all the cases.
Another lawsuit, filed by the Justice Department and scheduled for trial in September, seeks to dismantle AT&T.
Lawyers for each side said MCI needed to prove four issues to win its case: that AT&T had the power to monopolize, that there was a relevant market for the two companies, that AT&T used its powers to damage MCI and that MCI was damaged financially.
"AT&T's intent may be the most important thing you have to worry about in this case," MCI attorney Robert Hanley told the jurors.
Hanley stressed two key documents -- notes from a conference of AT&T executives in Key Largo, Fla., in 1972 and a 1973 AT&T internal report.
MCI said the notes showed that AT&Td tried to "choke off" MCI and the report showed the Bell System management knew the company was using monopolistic tactics that might be challenged.