Supreme Court Case on Baby Bells May Affect Antitrust Enforcement

SUPREME COURT CASE ON BABY BELLS MAY AFFECT ANTITRUST ENFORCEMENT
[SOURCE: Wall Street Journal, AUTHOR: Jess Bravin jess.bravin@wsj.com]
In a case with implications for antitrust enforcement, the Supreme Court heard arguments on how specific a plaintiff's allegations must be to claim anticompetitive behavior. The case springs from the decades-old legal saga that ended the Bell system telephone-service monopoly and created today's marketplace. The 1996 Telecommunications Act gave the Bell system's regional successors, the Baby Bells, the right to sell long-distance service in return for opening their local networks to competitors. Despite Congress's expectation the law would create a competitive market, the Baby Bells have remained dominant in their respective regions. The plaintiffs, a group of individuals who bought local telephone and Internet service since the law was enacted and represented by the class-action firm Milberg Weiss Bershad & Schulman LLP, filed suit in 2003, alleging the Baby Bells conspired to restrict entry into their territories of competitors in local telephone and Internet service. They claimed the Baby Bells, which after several mergers and name changes now include AT&T, BellSouth, Qwest and Verizon, violated the Sherman Antitrust Act, which prohibits "every contract, combination...or conspiracy, in restraint of trade or commerce." The plaintiffs had no direct evidence of such a conspiracy, however, and instead based their claim on circumstantial indicators of anticompetitive behavior, such as the parallel conduct of the Baby Bells in declining to compete in each other's territory and allegedly impeding other carriers from connecting to their networks. The Baby Bells argued that without more -- such as an allegation of a specific meeting in which a deal was made to restrain trade -- the case should be dismissed without allowing the plaintiffs discovery of internal documents.
http://online.wsj.com/article/SB116466004540033694.html?mod=todays_us_pa...
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http://www.usatoday.com/printedition/money/20061128/scotus_telecom28.art...