WASHINGTON-U.S. District Judge Harold Greene will decide whether AirTouch Communications Inc., a wireless spin-off of Pacific Telesis Group, is held to restrictions imposed on the seven regional Bell telephone companies by the 1982 consent decree that broke up AT&T.
San Francisco-based AirTouch, a top paging and cellular telephone operator in the United States and abroad, asked Greene in February to declare that restrictions forbidding Bells from offering long-distance telephone service and manufacturing telecommunications equipment not apply to it. The Justice Department, reacting to an inquiry by MCI Communications Corp. last August, ruled in January that AirTouch-as a “successor” of PacTel-has to live by the same rules as Baby Bells.
That potentially puts some AirTouch activities, like long-distance resale, equipment-related research and development and the firm’s 8 percent-plus stake in Loral-Qualcomm Inc.’s low-earth-orbit mobile satellite system, on shaky legal ground. AirTouch, which has allied itself with Nynex Corp., Bell Atlantic Corp. and U S West Inc. to provide next-generation pocket telephone service nationwide, disagrees.
“The decree was intended to prevent monopoly leveraging-that is, the misuse of monopoly power in the local franchise wireline markets to gain advantages in other, competitive markets,” stated AirTouch in the final round of written briefs.
“Cellular comes within its (the decree) purview,” added AirTouch, “only as a market into which monopoly power might be leveraged.”
Greene, who continues to oversee the AT&T breakup, has not indicated whether oral argument will be held. Justice has agreed not to enforce the decree against AirTouch while the matter is under review. AirTouch, in turn, said it will not enter any new business ventures that might violate the 1982 decree.
AirTouch broke away from PacTel a year ago to emancipate itself from the decree, but never sought a formal interpretation from Justice on the implications of the $14 billion PacTel spinoff. And Justice, until early this year, never offered one of its own. AirTouch maintains a court waiver is not needed and it should not be forced to seek one.
