Opposition — United States Independent Telephone Ass'n v. MCI Telecommunications Corp.

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[* Supreme Court, U. $s

I! FILED :

SEP 26 1978

[MICHABL RODAK, JR., CLERK

IN THE

Siytrrnw Cant of the United States

OCTOBER TERM, 1978

No. 78-216

UNITED STATES INDEPENDENT TELEPHONE ASSOCIATION

Vv.

MCI TELECOMMUNICATIONS CORPORATION, et al.

No. 78-217

AMERICAN TELEPHONE AND TELEGRAPH COMPANY

MCI TELECOMMUNICATIONS CORPORATION, e¢ al.

No. 78-270

FEDERAL COMMUNICATIONS COMMISSION

MCI TELECOMMUNICATIONS CORPORATION, ef al.

On Petitions for a Writ of Certiorari to the United States

Court of Appeals for the District of Columbia Circuit

BRIEF FOR THE RESPONDENTS IN OPPOSITION

Of Counsel: MICHAEL H. BADER

’ , , ; KENNETH A. Cox

JOHN R, WORTHINGTON _ WILLIAM J. BYRNES

1150 - 17th Street, N.W. : sie

Washi D.C. 20036 JOHN M. PELKEY

as yee ° COWS HALEY, BADER & Potts

(202) 872- 1730 M Street, N.W.

September, 1978 Washington, D.C. 20036

(202) 331-0606

WILSON - EPES PRINTING Co., INC. .- 789-0096 - WASHINGTON, D.C. 20001

TABLE OF CONTENTS

Page

QUESTION PRESENTED ................ 1

STATEMENT OF THE CASE .............. 2

ES AAC he 3

maruer Litigation .....................................__

eee ee 7

ARGUMENT AGAINST GRANTING CERTIORARI. 13

es 13

I. The lower court acted properly to protect its

mandate in Execunet J... ELE 15

II. There is no inconsistency with the Third Cir-

Se SOE all ied IR 18

III. The lower court’s decision did not invade the

Third Circuit’s “exclusive jurisdiction” of the

a . DS OPES DENN 21

IV. There was no error in construction of Section

201(a) of the Communications Act 23

V. The court of appeals did not usurp the role of

the administrative agency _.....__ chai pintbeinthaled’s ‘ 25

ele 27

TABLE OF AUTHORITIES

Page

Judicial Decisions

Bell Telephone Company of Pennsylvania v. FCC,

503 F.2d 1250 (3d Cir. 1974), cert. denied, 422

U.S. 1026, reh. denied, 423 U.S. 886 (1975) __...... passim

City of Cleveland v. FPC, 561 F.2d 344 (D.C. Cir.

BIRD s-decdedaces tsuigtatoatacyasemureeuins voncemnunecmaaaies 18

City of Tacoma V. Taxpayers of Tacoma, 357 U.S.

I ans OE et a, eee 22

Lorain Journal v. United States, 342 U.S. 148

| RRO Se Rc Fee aC aN UNRSUOE NTS Ora e AE 21

MCI Telecommunications Corp. v. FCC, 561 F.2d

365 (D.C. Cir. 1977), cert. denied, 484 U.S. 1040

(1978), mandate enforced, No. 75-1635 (D.C.

ig ee I oc ce ae Fe passim

Midwest Video Corp. v. United States, 362 F.2d

Sr 22

Munro V. Post, 102 F.2d 686 (2d Cir. 1939) 18

Otter Tail Power Co. v. United States, 410 U.S.

366, reh. denied, 411 U.S. 910 (1973) _........... 21

Thornton Vv. Carter, 109 F.2d 316 (8th Cir. 1940) .. 18

United States v. Griffith, 334 U.S. 100 (1948) __..... 21

United States v. Terminal Railroad Association of

St. Louis, 224 U.S. 388 (1912) ........................... 21

Vermont Yankee Nuclear Power Corp. v. Natural

Resources Defense Council, 98 S. Ct. 1197

ce Re eC NONE AE LET NR En 25

Yablonski v. UMW, 454 F.2d 1036 (D.C. Cir.

1971), cert. denied, 406 U.S. 906 (1972) _.......... 18

Administrative Decisions

Bell System Tariff Offerings, 46 FCC 2d 413

(1974), aff'd, Bell Telephone Company v. FCC,

503 F.2d 1250 (3d Cir. 1974), cert. denied, 422

U.S. 1026, reh. denied, 423 U.S. 886 (1975) ....... passim

ie DE:

A A ree 8 et RB Leen.

TABLE OF AUTHORITIES—Continued

Establishment of Policies and Procedures for Con-

sideration of Applications to Provide Specialized

Common Carrier Services in the Domestic Point-

to-Point Microwave Radio Service and Proposed

Amendments to Parts 21, 43 and 61 of the Com-

mission’s Rules (Docket No. 18920), 29 FCC 2d

870 (1971), reconsideration denied, 31 FCC 2d

1106 (1971), aff'd sub nom. Washington Utilities

& Transportation Commission v. FCC, 513 F.2d

1142 (9th Cir.), cert. denied, 423 U.S. 836

CBIPIE, scsasntedscaintiniendbaicascamateas teen ie eee

Establishment of Policies and Procedures for Con-

sideration of Applications to Provide Specialized

Common Carrier Services in the Domestic Point-

to-Point Microwave Radio Service and Proposed

Amendments to Parts 21, 43 and 61 of the Com-

mission’s Rules (Docket No. 18920) Notice of

Inquiry, 24 FCC 2d 318 (1970)

Establishment of Rules Pertaining to the Authori-

zation of New or Revised Classifications of Com-

munications on Interstate or Foreign Common

Carrier Facilities (Docket No. 19117), 39 FCC

Se Tk COO circle eee

Microwave Communications, Inc., 18 FCC 2d 953

(1969), reconsideration denied, 21 FCC 2d 190

25 (1976), reversed, MCI Telecommunications

Corp. Vv. FCC, 561 F.2d 365 (D.C. Cir. 1977),

cert. denied, 434 U.S. 1040 (1978), mandate en-

forced, No. 75-1635 (D.C. Cir., April 14, 1978) ..

MTS and WATS Market Structure, FCC 2d

——, Docket No. 78-72, FCC 78-144 (adopted

February 23, 1978, released March 3, 1978) ___.

Page

4,6

15, 26

TABLE OF AUTHORITIES—Continued

Page

Statutes and FCC Rules

Communications Act of 1934:

Beotion BOR, 47 GAA. BOE cisescccn 13, 23, 24

Section 202, 47 U.S.C. § 202 _............ penniless 24

Section 214, 47 U.S.C. § 214 —..................... 10

Hobbs Act, 28 U.S.C. § 2341 et seq. _..............7, 21, 22, 23

Ge Cie 6 ee Oe kiceciceneeeetneee eee 9

Miscellaneous

S.3192, 94th Cong., 2d Sess. (1976) ........................ 26

H.R. 123238, 94th Cong., 2d Sess. (1976) ................ 26

S.530, 95th Cong., Ist Sess. (1977) ....................-.. 26

H.R. 8, 95th Cong., Ist Sess. (1977) ...................... 26

H.R. 13015, 95th Cong., 2d Sess. (1978) —.... 00... 26

Motion of AT&T to Dissolve or Modify the Stay

and for Expedited Review filed August 18, 1976

in MCI Telecommunications Corporation Vv. FCC,

Be. FE-RGR COKE. GR cccesttete daa 9

Affidavit of Paul E. Muench of August 18, 1976 ap-

pended to AT&T Motion to Dissolve or Modify

the Stay and for Expedited Review filed August

18, 1976 in MCI Telecommunications Corpora-

tion Vv. FCC, No. 75-1635 (D.C. Cir.) 2.0... a 9

Reply of AT&T of November 6, 1975 filed in MCI

Telecommunications Corporation v. FCC, No.

FORD CR GD scacesctsvescanttetee tc eee 9

AT&T Petition for a Writ of Certiorari of Septem-

ber, 1977 filed in United States Independent

Telephone Association v. MCI Telecommunica-

tions Corporation, et al., No. 77-420 (U.S. Sup.

6 5 BRAT MRT ee AE EL ESS Eke Sed 10, 16

Petitioner’s Reply of November, 1977 filed in

United States Independent Telephone Associa-

tion Vv. MCI Telecommunications Corporation,

et al., No. 77-420 (U.S. Sup. Ct.) 00 11

IN THE

Suprenw Court of the United States

OCTOBER TERM, 1978

Nos. 78-216, 78-217, 78-270

UNITED STATES INDEPENDENT TELEPHONE ASSOCIATION,

AMERICAN TELEPHONE AND TELEGRAPH COMPANY, AND

FEDERAL COMMUNICATIONS COMMISSION,

Petitioners

Vv.

MCI TELECOMMUNICATIONS CORPORATION, MICROWAVE

COMMUNICATIONS, INC., AND N -TRIPLE-C INC.,

Respondents

On Petitions for a Writ of Certiorari to the United States

Court of Appeals for the District of Columbia Circuit

BRIEF FOR THE RESPONDENTS IN OPPOSITION

QUESTION PRESENTED

Whether parties may frustrate an order of a court of

appeals by implicitly conceding a critically important

aspect of their case during judicial review and then

after denial of certiorari, asserting the matter as a

—_——

defense for their non-compliance with the judicial man-

date?

STATEMENT OF THE CASE

On July 28, 1977, the United States Court of Appeals

for the District of Columbia Circuit reversed an order

of the Federal Communications Commission requiring

MCI Telecommunications Corporation, Microwave Com-

munications, Inc., and N-Triple-C Inc. to cease provid-

ing Execunet service to their customers. MCI Telecom-

munications Corp. v. FCC, 561 F.2d 365 (1977), cert.

denied, 484 U.S. 1040 (1978) (“Execunet I’)... On

January 16, 1978, this Court denied certiorari as to

Execunet I. Within hours after the denial, AT&T filed

with the FCC a petition seeking a ruling that it was

under no obligation to furnish the local interconnections

that were absolutely necessary to make Execunet service

work and began, effective immediately, to refuse further

interconnections. A divided FCC granted the requested

endorsement of AT&T’s action on February 23, 1978.*

MCI immediately sought relief from the United States

Court of Appeals for the District of Columbia Circuit

by filing a motion for an order directing compliance with

the court’s mandate in Execunet I. On April 14, 1978,

the court issued an order,’ accompanied by a detailed

opinion,‘ directing such compliance (“Execunet II’’).

Motions for rehearing and suggestions for a rehearing

en banc * were denied, with no judge of the circuit court

voting to grant such motions. The court also denied

motions for a stay of its order pending disposition of

1 AT&T App. 1i.

2 AT&T App. Ic.

8 AT&T App. 1d.

* AT&T App. la.

5 AT&T App. le and 2e.

petitions for a writ of certiorari.” Applications for a

stay pending disposition of the petitions for certiorari

addressed to the Chief Justice of the United States, which

were forwarded by him to the other Justices of this

Court, were denied.’ Petitions for certiorari were filed

in August, 1978. The United States, a statutory re-

spondent below, did not join in the FCC’s petition.

Background

MCI Telecommunications Corporation, Microwave Com-

munications, Inc. and N-Triple-C Inc. (collectively “MCI” )

are affiliated communications common carriers, operat-

ing a transcontinental system providing long distance

business and data communications services among various

metropolitan areas throughout the United States.

_MCI’s system is constructed to provide communica-

tions capacity only between MCI’s in-city terminals and

not beyond those terminals out to the points to which

its customers wish their communications brought. In

this regard, MCI is much like the Long Lines Department

of AT&T, MCI’s principal competitor in the provision of

long distance, intercity communication services. AT&T

Long Lines also relies upon local telephone companies

primarily subsidiaries of AT&T, to provide the required

local interconnections between its in-city terminals and

its customers’ desired termination points. It would be

both economically burdensome and wasteful to expect

those carriers competing for the intercity communica-

tions market each essentially to duplicate the existing

facilities of the local telephone companies. As a result

of AT&T’s ownership of the largest local telephone com-

panies and its domination of the rest through revenue

sharing agreements, the Long Lines Department has not

" Order of May 22, 1978.

experienced any difficulties in obtaining whatever local

interconnections it requires. Long Lines’ competitors, on

the other hand, have been denied interconnections at

certain critical times when AT&T has sought to limit the

scope 01 competing intercity services.

Earlier Litigation

Microwave Communications, Inc. received certification

in August, 1969 to construct a line between Chicago and

St. Louis.‘ In that decision, the Commission recognized

that MCI would require the use of local telephone com-

pany facilities to extend its intercity services to its

customers. Despite AT&T’s protests, the Commission held

that the issuance of an order requiring the existing

carriers to provide such local distribution services would

be in the public interest.’

Thereafter, the Commission received numerous appli-

cations for certification of additional lines from other

potential competitors of AT&T. Rather than handling

each of these applications on a case-by-case basis, the

Commission instituted a rulemaking (the “Specialized

Carrier” proceeding) to decide a number of general policy

questions raised by the applications, including “[w]hether

as a general policy the public interest would be served

by permitting the entry of new carriers in the specialized

communications field; .. .” and, if such entry were per-

mitted, “{w]hat is the appropriate means for local dis-

tribution of the proposed services?” *° The FCC spe-

cifically found that a “general policy in favor of the

8 Microwave Communications, Inc., 18 FCC 2d 953 (1969), re-

consideration denied, 21 FCC 2d 190 (1970).

* 18 FCC 2d at 965.

1 Establishment of Policies and Procedures for Consideration of

Applications to Provide Specialized Common Carrier Services in the

Domestic Point-to-Point Microwave Radio Service and Proposed

Amendments to Parts 21, 43 and 61 of the Commission’s Rules

(Docket No. 18920) Notice of Inquiry, 24 FCC 2d 318, 327 (1970).

entry of new carriers in the specialized communications

field would serve the public interest, convenience and

necessity.” '' The Commission also held that the estab-

lished carriers should permit interconnection with the

new carriers and reinforced this holding with a reminder

that the Commission would not condone any practice

whereby any established carrier discriminated in favor

of an affiliated carrier with respect to such interconnec-

tion.”

During the pendency of the Specialized Carrier pro-

ceeding, the Commission instituted another related rule-

making to consider a proposal that all carriers, before

instituting new services on existing facilities, be re-

quired to obtain prior Commission consent. After de-

liberation, the FCC concluded, to the contrary, that both

the established and new carriers should be free to in-

stitute new service offerings merely by filing tariff re-

visions, rather than being required to obtain prior au-

thorization from the Commission.

1 Establishment of Policies and Procedures for Consideration of

Applications to Provide Specalized Common Carrier Services in the

Domestic Point-to-Point Microwave Radio Service and Proposed

Amendments to Parts 21, 43 and 61 of the Commission’s Rules

(Docket No. 18920), 29 FCC 2d 870, 920 (1971), reconsideration

denied, 31 FCC 2d 1106 (1971), aff’d sub nom. Washington Utilities

& Transportation Commission v. FCC, 513 F.2d 1142 (9th Cir.),

cert. denied, 423 U.S. 836 (1975).

12 29 FCC 2d at 940.

13 Establishment of Rules Pertaining to the Authorization of

New or Revised Classifications of Communications on Interstate or

Foreign Common Carrier Facilities (Docket No. 19117), 39 FCC 2d

131 (1973). The Commission stated, at 135, that:

In connection with possible revisions of our tariff rules, we

recognize that the termination of the rule making proposed

herein will make it possible for domestic carriers, as a general

rule, to offer new classes or subclasses of communications

service over duly authorized facilities merely by the filing of

appropriate tariff revisions properly supported by the cost

and other data required by Part 61 and otherwise in conformity

with our rules.

During 1972 and up to mid-1973, while it was build-

ing its initial system, MCI engaged in extensive negotia-

tions with AT&T to obtain adequate local interconnection.

By the fall of 1978, however, it was clear that AT&T

would not provide MCI with local interconnections re-

quired for certain services, including a private line serv-

ice known in the industry as “foreign exchange” or

“FX”. FX is a service which gives a customer in one

city a line to a distant city which terminates in a busi-

ness telephone arrangement in a telephone central office

there. This gives the subscriber access to the local ex-

change in the distant city. For example, if a business-

man in Washington subscribes to FX service to New

York, he can reach all the telephone subscribers in New

York City—and can, in turn, be reached by all of them.

To resolve the local interconnection dispute, the FCC

initiated a show cause proceeding against AT&T in De-

cember, 1973. Relying upon the Microwave Communica-

tions, Inc. and Specialized Carrier proceedings, the Com-

mission reaffirmed AT&T’s obligation to furnish MCI

and other specialized carriers with the local facilities

needed for the rendition of all their authorized services,

including FX." The Commission explained that :*

Our orders herein therefore make clear that Bell is

to provide interconnection facilities for all of the au-

thorized services of the specialized carriers, including

FX and CCSA.

Specifically, the Commission ordered Bell to. cease and

desist from the following practices, among others:

* Bell System Tariff Offerings (Docket No. 19896), 46 FCC 2d

413 (1974), aff'd, Bell Telephone Company v. FCC, 508 F.2d 1250

(3d Cir. 1974), cert. denied, 422 U.S. 1026, reh. denied, 423 U.S. 886

(1975).

1 46 FCC 2d at 427 (emphasis added). “CCSA” (common con-

trol switching arrangements) service—for large businesses—was

also specifically at issue in Docket No. 19896.

(a) Engaging in any conduct which results in a

denial of, or unreasonable delay in establishing,

physical connections with MCI and other special-

ized common carriers for their presently or here-

after authorized interstate and foreign com-

munications services ;

* * * *

sults in denying to MCI or any other carrier

party reasonable interconnection services similar

to those provided to the Long Lines Department

of the American Telephone and Telegraph Com-

pany in connection with the authorized inter-

state and foreign communications services of

such other carriers.

The Third Circuit affirmed the cease and desist order

in the Bell Telephone case."

The Execunet Case

On September 10, 1974, MCI filed a tariff revision to

institute a new category of specialized metered use serv-

ices, which included the service commercially known as

Execunet. Execunet is essentially a variation of FX

service, the major difference between the two being that

Execunet subscribers share groups of FX facilities in-

stead of leasing one or more for their own exclusive use.

Execunet subscribers are charged on a time and distance

sensitive basis, with a minimum charge of $75.00 per

month being assessed in addition to a monthly charge for

the interconnection supplied by the local telephone com-

1” Bell Telephone Company of Pennsylvania v. FCC, 503 F.2d 1250

(3d Cir. 1974), cert. denied, 422 U.S. 1026, reh. denied, 423 U.S. 886

(1975). Note that, despite the fact that the underlying Specialized

Carrier decision was then under review in the Ninth Circuit, AT&T

nevertheless chose to appeal in the Third Circuit. This was incon-

sistent with Bell’s new argument advanced in its petition here that

the Hobbs Act limits jurisdiction to the circuit where a related

case is being, or was, considered.

panies which averages approximately $25.00. Execunet

service is available to only a limited number of cities

on a thirty-day commitment basis. Subscribers are given

identification codes that permit MCI’s computerized

equipment to identify them as “authorized” to use the

service,

Insofar as required local interconnection is ‘concerned,

it is important to note Execunet service employs exactly

the same type of local telephone company interconnection

facilities as does conventional FX service. MCI merely

uses these interconnections in a more efficient manner

through sharing. The identity between FX and Execunet

local interconnection facilities makes it clear that AT&T’s

real quarrel is not with respect to the facilities requested

but rather the use to which MCI intends to put them.

In the spring of 1975, AT&T began a surreptitious

campaign of ex parte presentations to members of the

Commission and its staff against MCI Execunet service."

In May, AT&T sent to the FCC a very brief informal

letter of protest.’ Without having even given MCI an

** MCI knew nothing of this campaign at the time, but learned

of it later. After repeated, but largely unsuccessful, attempts by

MCI to put the full facts as to AT&T’s ex parte meetings on the

record of this case, it is now known from subsequently submitted

affidavits: (1) that AT&T argued its case forcefully; (2) that there

was an arrangement between AT&T and representatives of a major

non-Bell telephone company to obtain an Execunet authorization

code for use in offering demonstrative evidence regarding Execunet

to members of the Commission; (3) that one of the parties to this

arrangement stated: “We will bury MCI”: and (4) that at least

one individual who occupied a decision-making position with the

Commission made a remark showing that he had been influenced

into reaching a firm, adverse judgment against MCI. The unprece-

dented celerity with which the Commission acted in 1975 also makes

obvious the effectiveness of AT&T’s ex parte presentations. Even

now, however, MCI does not know all the arguments AT&T advanced

since the Commission has rejected every attempt by MCI to find out.

‘The Commission labeled this an informal complaint. When

MCI refused to satisfy the complaint, AT&T’s only legal recourse

opportunity to respond to AT&T’s ex parte communica-

tions, the Commission issued a peremptory letter rejecting

MCI’s Execunet tariff revisions.” MCI immediately ap-

pealed and was granted a stay by the Court of Appeals

for the D.C. Circuit. The Commission then asked the D.C.

Circuit to hold the appeal in abeyance while it reconsid-

ered its decision. After it issued its second decision in

1976,** which attempted to bolster its 1975 letter order,

the Commission joined AT&T in seeking dissolution or

modification of the court’s stay. AT&T sought protection

from what it called the “continuing and ever-increasing

diversion of MTS”** and expressed the gravest concern

about “the drastic scope of MCI’s threatened expan-

sion.” ** It produced an affidavit detailing the numerous

local exchange interconnections it was providing for

Execunet.** As a result of such representations, the court

under 47 C.F.R. § 1.721 et’ seq. was to file a formal complaint.

It never did so—and the Commission did not require it to comply

with the rule—with the result that MCI was effectively denied an

opportunity to respond adequately in accordance with the Commis-

sion’s rules.

20 60 FCC 2d 62 (1975).

** MCI Telecommunications Corporation, 60 FCC 2d 25 (1976).

*? Motion of AT&T to Dissolve or Modify the Stay and For Ex-

pedited Review dated August 18, 1976, p. 22. MTS (message tele-

communications service) is AT&T’s ordinary long distance telephone

service.

8 Reply of AT&T dated November 6, 1975, p. 4. AT&T explained,

at page 15 of its Reply, that:

Since the expansion plans involved the installation of new

local exchange lines in most of the cities beginning in Novem-

ber (id. para. 7), AT&T urgently filed its motion by the end

of the same week in order to give MCI an opportunity to re-

spond, and the Court an opportunity to act, before MCI initi-

ated substantial Execunet service. .. .

** Affidavit of Paul E. Muench dated August 18, 1976, appended

to AT&T’s mction of the same date.

modified its stay so as to prevent further expansion of

Execunet prior to decision on the merits.

Upon consideration of the merits in Execunet I, the

court reversed the agency’s decision. The court held that

the Specialized Carrier decision must be read broadly and

that MCI’s existing certifications under Section 214 of the

Communications Act * permitted it to furnish Execunet

service. The court held that only if the Commission has

made a determination that the public convenience and

necessity require that new services receive advance ap-

proval can it reject such a new service. It left to the Com-

mission the opportunity to consider, in a future proceed-

ing, whether the public interest might require such a

finding.”

In petitioning for certiorari, AT&T made the follow-

ing representations to this Court :?”

If the lower court’s decision stands, the telephone

companies will be threatened with a massive diver-

25 47 U.S.C. § 214.

26 MCI had argued not only that its certifications were not sub-

ject to pre-existing service limitations, either explicit or implicit,

but also that, even if it were assumed arguendo that MCI were

limited to “private line” service or “specialized” service, Execunet

would fall within either of those categories. MCI also argued that

it had been deprived of its due process rights in view of the undis-

closed nature of AT&T’s ex parte presentations and in view of the

FCC’s curtailing of its normal hearing processes. These arguments

were rendered moot when the lower court reached its decision that

there were in fact no pre-existing conditions on MCI’s facility

certifications. Despite the fact that Execunet I vacated the agency

orders under review, however, petitioners here persist in returning

to them to contend that Execunet is properly classifiable as “MTS”

rather than “private line” or “specialized” service. That contention

has been refuted by extensive affidavits and analyses which had

been impermissibly ignored by the agency in the decisions the court

invalidated. This is one illustration of the attempt by petitioners

to circumvent the Execunet I decision.

** AT&T Petition for a Writ of Certiorari of September, 1977,

p. 29 (emphasis added).

sion of MTS traffic from the switched network. This

diversion can occur at an extraordinary rate—liter-

ally in a matter of months—because the specialized

carriers have thousands of intercity circuits in op-

eration and they utilize existing local distribution

facilities already in place. Past experience confirms

the severity and speed of this threat.

The FCC echoed the same theme.** Thus petitioners

represented to this Court that Execunet I would result

in rapid expansion of Execunet service, with significant

adverse impact on AT&'!—a development which could

occur only if AT&T is required to provide the intercon-

nections MCI needs for Execunet.

MCI was therefore shocked when it received—only a

few hours after the announcement of this Court’s denial

of the petitions for a writ of certiorari—a pleading from

AT&T entitled “Petition for a Declaratory Ruling and

Expedited Relief.” That document informed MCI that

AT&T would provide no more interconnections for Execu-

net and sought from the Commission a ruling that AT&T

was under no obligation to provide such interconnections.

MCI opposed the petition, and itself pet‘‘ioned the Com-

mission for an order directing AT&T to comply with

the mandate of the court of appeals in Execunet I. The

AT&T petition was also opposed by the Department of

Justice which stated :*°

The Department of Justice reads the Execunet

decision as affirming the principle that communica-

tions carriers, including AT&T and MCI, may offer a

full range of telecommunications services under pres-

ent law and present communications regulations.

** For instance, in its Petitioner’s Reply of November, 1977, p. 6,

n. 9, the FCC argued that Execunet J would “bring significant

competition” to the established telephone industry.

*° Comments of the United States Department of Justice dated

January 30, 1978, p. 9.

Without an affirmative finding that the public in-

terest so requires, the FCC is not now free to impose

service limitations on either MCI or AT&T.

* * af -_

Recent court decisions make it clear that local

telephone companies, including AT&T subsidiaries,

are affirmatively obliged to offer local interconnection

or loop services to other carriers, including MCI,

to facilitate lawful services. Specialized Common

Carriers Services, 29 FCC 2d 870, 940 (1971). Bell

System Tariff Offerings, 46 FCC 2d 4138, (9 15)

(1974) aff’d sub nom Bell Telephone Co. of Pa. v.

FCC, 503 F.2d 1250 (1974), cert. denied., 422 U.S.

1026 (1974).

Nevertheless, the Commission, on February 23, 1978,

granted the AT&T petition. Commissioner Joseph R.

Fogarty dissented on the grounds that :*°

Clearly the D.C. Circuit’s findings would be a nullity

were we to deny interconnection necessary ior pro-

vision of such services. Bell System Tariff Offerings

held that Specialized Common Carriers mandated

interconnections necessary for servic authorized

therein, and the Execunet court found those services

unrestricted. Since Execunet-type services are pres-

ently authorized, these cases read together mandate

interconnection.

Immediately after the Commission announced its de-

cision, MCI filed with the United States Court of Appeals

for the District of Columbia Circuit a Motion for an

Order Directing Compliance with Mandate." On April

14, 1978, the D.C. Circuit, holding that the Commission’s

action was totally at odds with Ewvecunet I, granted MCI’s

%© AT&T App. 56c.

*2 Concurrently therewith, MCI filed petitions for review of the

Commission’s February 23, 1978 decision.

motion.** That is the decision (Hxecunet II) which pe-

titioners are asking the Court to review.

ARGUMENT AGAINST GRANTING CERTIORARI

Summary

The unanimous decision of the court of appeals in

Execunet II basically rejects an attempt to circumvent

the rulings in its Hxwecwnet I decision, with respect to

which certiorari was previously denied. Not a single

judge of the circuit court voted in favor of rehearing

Execunet II, The judges of the lower court, as well as

the Justices of this Court, have refused a stay of the

Execunet II decision.

There is no constitutional question at stake. Indeed,

there is not even a real question of statutory interpreta-

tion involved. The court below did not have to reach

the question of whether Section 201 of the Communica-

tions Act of 1934, 47 U.S.C. § 201, requires a hearing

for an interconnection order, inasmuch as it found that

previous interconnection orders of the Commission itself

included the interconnections in question.

There is no conflict with the decision of another cir-

cuit. Both the decision below and the Third Circuit

decision in Bell Telephone firmly rejected efforts by

AT&T to refuse interconnections to MCI. Petitioners rely

unconvineingly on a distorted interpretation of dicta in

Bell Telephone which has been rejected for sound reasons

by the lower court.

When AT&T petitioned for certiorari with respect to

Execunet I, it represented to this Court, as one of its

principal arguments, that MCI would immediately ex-

pand its Execunet service at a very rapid rate and

thereby divert revenue from AT&T. Without intercon-

82 AT&T App. la.

nections from Bell, however, it would have been utterly

impossible for MCI to expand Execunet, so AT&T’s rep-

resentations constituted an implicit admission that it was

required to provide such interconnections, absent reversal

of Execunet I. But just hours after the Court denied

certiorari, AT&T suddenly announced that it did not

have any such obligation to interconnect—a position not

only inconsistent with its representations to the Court

but one which meant that the preceding two and a haif

years of litigation had absolutely no significance, making

a travesty of the rulings of the court of appeals and

this Court. Clearly, sound judicial administration re-

quires that parties not be allowed to profit from such

dissimulation, or from the holding back of arguments

for future defense of noncompliance with judicial de-

cisions.

This is particularly true where, as here, the argument

now advanced is premised upon a rationale which was

rejected in the first decision. Central to the position of

petitioners, in both Execunet I and Evxecunet II, is the

mistaken claim that certain services were excluded from

the purview of the 1971 Commission’s Specialized Carrier

decision. This contention was laid to rest by the court

in E'xecunet I. However, petitioners are here trying to

unearth it once more—to evade the court’s rulings and

to achieve the very same result that was found unlawful

in the first instance. The lower court acted in Execunet

II to protect its earlier mandate from such sophistic

trifling.

Similarly, AT&T now argues that the Third Circuit

has exclusive jurisdiction of the case, despite the fact that

it never made this claim below—and never moved to

transfer the case to the Third Circuit. AT&T may well

have realized that the Third Circuit, which denied it the

right to refuse MCI interconnections for FX and CCSA,

was not likely to let it get away with refusing intercon-

nections for Execunet. Having made its decision to ac-

cept the jurisdiction of the D.C. Court, AT&T is not en-

titled to yet another round of repetitious litigation of

this issue.

The lower court’s decision does not prevent the ad-

ministrative agency from considering what future action,

if any, concerning the services and interconnections in-

volved here may be in the public interest—and, indeed,

the agency has already instituted such a proceeding.

MTS and WATS Market Structure, —— FCC 2d —,

Docket No. 78-72, FCC 78-144 (adopted February 23,

1978, released March 8, 1978). That is the proper forum

for any substantive arguments AT&T can make to sup-

port its desire for protected monopoly status.

I. The Lower Court Acted Properly to Protect Its Man-

date in Execunet I

Never once in the Execunet ] proceedings before the

court did AT&T even suggest that it was not required

to provide the local interconnections that are the sine

qua non for Execunet service.** Without such intercon-

nection, the litigation over MCI’s authority to provide

Execunet service, which was resolved in Execunet I,

would have been of absolutely no consequence. Indeed,

in seeking a modification of the lower court’s stay of the

agency decision, AT&T had forcefully argued that con-

tinuation of the full stay would permit MCI to divert

substantial business from AT&T.** And once again, when

it petitioned for certiorari, AT&T, as one of its primary

arguments, assured this Court that if the Execunet I

decision were allowed to stand, the growth of Execunet

service would create in a matter of months a massive

diversion of MTS traffic “because the specialized carriers

88 AT&T App. 9a.

3 AT&T App. 5a.

have thousands of intercity circuits in operation and they

utilize existing local distribution facilities already in

place.” * At the time the Court last Jooked at this case,

everyone in the case was in apparent agreement that

if the Court denied certiorari the first time it was

sought, MCI would expand Execunet. Yet, within hours

after this Court denied certiorari, AT&T dramatically

renounced the obligation of interconnection it had as-

sumed, and upon which all the parties and the court had

relied, during the Execunet I litigation. Attempting to

take advantage of their own earlier concession that in-

terconnection was not an issue, petitioners now argue

that in Execunet I the court failed to explicitly discuss

interconnection. In Execunet II, the lower court rejected

this sophistry and made it clear that its first decision

“did clearly contemplate—by virtue of AT&T’s repre-

sentations and actions—that AT&T was required to pro-

vide interconnections for Execunet service.” *

Furthermore, analysis of the decision of the 1978

Commission that AT&T had no obligaticn to furnish in-

terconnections required for Execunet shows that it is

premised on the misconception that the 1971 Commission

had excluded certain services from the purview of the

Specialized Carrier decision—a view that had already

been explicitly rejected by the court in Execunet I. In

Execunet I, the court had made it abundantly clear that

MCI was free to introduce new services, including Execu-

net, on the lines which had been certificated pursuant to .

the Specialized Carrier decision—unless and until the |

agency made a public interest finding to the contrary

in an appropriate proceeding. The 1978 Commission,

however, simply ignored this holding when it stated its

rationale for concluding that AT&T had no obligation

** AT&T Petition for a Writ of Certiorari of September, 1977,

page 29.

36 AT&T App. 9a (emphasis in original).

to furnish interconnections for Execunet. It reasoned

as follows in paragraph 59 of its decision :*"

We believe it is clear that the Specialized Common

Carrier decision as well as our order in Bell System

Tariff Offerings and the Court’s decision in Bell

Tel. Co. of Pennsylvania require interconnection for

all specialized interstate communication services, in-

cluding switched digital services such as those de-

veloped by Datran. What is germane to the present

proceeding, however, is a determination as to what

services were explicitly excluded from consideration

in Specialized Common Carrier, Bell System Tariff

Offerings, and Bell Tel. Co, of Pennsylvania. We be-

lieve it is clear that MTS and WATS services, and

therefore services by other names which are the func-

tional equivalent of MTS and WATS, were excluded

from both the considerations and holdings of these

proceedings. The interconnection discussion in those

opinions can only be read to mean that all telephone

companies are required to provide facilities and inter-

connections which the specialized common carriers

may need to provide both conventional private line

services and new specialized services which may dif-

fer from any private line service which was being

offered by the established carriers in June 197 1.

The majority of the 1978 Commission thus chose to dis-

regard the observation of Commissioner Fogarty that:*

We are bound, therefore, by the law of the case, and

we are now required to interpret the Specialized

Carrier decision in light of the D.C. Circuit’s Execu-

net holding.

Commissioner Fogarty further observed that :* “Clearly,

the D.C. Cireuit’s findings would be a nullity were we

87 AT&T App. 35c (emphasis in original).

38 AT&T App. 56c.

39 Td,

to deny interconnection necessary for provision of such

services.”

The majority of the Commission, however, indeed did

attempt to reduce the court’s first decision to a nullity

by employing the very same erroneous reasoning pre-

viously rejected by the court to obtain the identical re-

sult—stopping MCI from providing | Execunet. In so

doing, however, they violated the principle that an agency

“is without power to do anything which is contrary to

either the letter or spirit of the mandate construed in the

light of the opinion of [the] court deciding the case,

and has a duty to follow “everything decided, either ex-

pressly or by necessary implication.” *

II. There Is No Inconsistency With the Third Circuit

Both the Execunet I and Bell Telephone decisions firmly

rejected efforts by AT&T to deny MCI interconnections.

Petitioners rely on. distorted interpretations of dicta in

the 1974 Bell Telephone decision to allege inconsistency.

The holding in Bell Telephone was affirmance of an FCC

cease and desist order interpreting and enforcing inter-

connection obligations that had been imposed by the 1971

Commission in its Specialized Carrier decision. AT&T

had been ordered by the Commission to cease and desist

from denial or unreasonable delay in establishing con-

nections with specialized carriers for their presently or

hereafter authorized interstate and foreign communica-

tions services.** The Third Circuit affirmed this determi-

] ir. 1977)

* City of Cleveland v. FPC, 561 F.2d 344, 346 (D.C. Cir 1977),

Pt on FA nace v. UMW, 454 F.2d 1036, 1088 (D.C. Cir. 1971).

cert. denied, 406 U.S. 906 (1972), quoting Thornton v. Carter, 109

F.2d 316, 320 (8th Cir. 1940).

\ City of Cleveland, supra at 348, quoting Munro v. Post, 102

F.2d 686, 688 (2d Cir. 1939).

42 Bell System Tariff Offerings, 46 FCC 2d 413, 438 (1974).

nation. The only qualification it stated was with respect

to “the types of services that AT&T will be required to

provide ‘hereafter’.”** The limitation it read into the

FCC cease and desist order was with respect to the type

of interconnections Bell might be called upon to provide.

These would be limited to types of interconnection fur-

nished by local telephone companies to their affiliate—

AT&T Long Lines. The context in which this limitation

was framed was one in which AT&T had been attempting

to make the court believe there might be some technical

danger to its facilities resulting from interconnection—

an allegation which subsequent experience has shown to

have been utterly without foundation. The type of inter-

connections provided by the Bell System with respect to

Execunet is no different from that provided with respect

to conventional FX service—which was specifically ap-

proved in the Third Circuit case. The petitioners uncon-

vincingly attempt to convert this minor limitation of the

1974 cease and desist order into a broad limitation upon

the kinds of services specialized carriers may provide to

their customers even with types of interconnection which

concededly are similar to those received by Long Lines.

Furthermore, the Third Circuit concluded that the prime

concern of the Commission in framing its interconnec-

tion order was to prevent local telephone companies from

treating AT&T’s Long Lines Department differently than

it treats the specialized carriers.“ Thus, the types of

interconnections required for Execunet, which are pro-

vided to Long Lines, must also be provided to MCI. Con-

sequently, if anything, the Third Circuit decision stands

in support of, and not in contravention of the Execunet

II decision.**

** 503 F.2d at 1273.

“ 5g.

a Counsel for the FCC introduces an interpretation, not found

in the agency’s 1978 decision, of the Third Circuit’s treatment of

Petitioners rely heavily on the use of the term “pri-

vate line” in the Third Circuit opinion. However, use

of this term was to be expected inasmuch as FX and

CCSA services had long been among what AT&T chose

to categorize as “private line” services in its tariffs and

they represented the immediate matter in dispute in the

1974 controversy. But as the 1978 Commission itself

recognized in paragraph 59 of its decision, the term

“private line’ was used as an abbreviated expression

or shorthand for a broader category :*

It is true that the Specialized Carrier decision en-

compassed specialized communications services other

than those which theretofore had been described by

the established carriers as “private line” services. It

is also true that in the ensuing debate and litigation

regarding required interconnection arrangements, the

term specialized communications service was fre-

quently omitted in favor of the more limited term

“private line.” The use of this abbreviated expres-

sion apparently arose as a result of the context in

which these issues were raised, i.e., whether the

specialized carriers should be accorded the same in-

terconnection rights as were accorded AT&T’s inter-

nal operations in Bell’s offering of “private line”

services.

The ordering clauses of the 1974 cease and desist

action make it abundantly clear that Bell was required

AT&T’s 1974 notice argument. But this new argument ignores the

fact that the Third Circuit’s conclusion with respect to the notice

argument was supported more broadly by the Third Circuit’s inter-

pretation of the interconnection order in the Specialized Carrier

decision. After reviewing that order, the Third Circuit stated, 503

F.2d at 1270:

If this passage connotes nothing else, it indicates that the

Commission intended the established carriers to provide to the

specialized carriers the same services (at the same rates) as

those provided to AT&T’s affiliates. ... Accordingly, we reject

the alternate contention that AT&T did not receive the requisite

notice in Docket No. 18920 (1971).

46 AT&T App. 34c-35c.

to furnish interconnections to the Specialized carriers

for all their authorized services.*’ Execunet I established

that Execunet was such a service and AT&T’s obligation

to provide interconnections for it necessarily followed.

III. The Lower Court’s Decision Did Not Invade the Third

on “Exclusive Jurisdiction” Under the Hobbs

ct ;

In Execunet II, the D.C. Circuit interpreted its own

mandate in Execunet I. Nothing could be more clearly

within the jurisdiction of the D.C. Circuit.

The Third Circuit decision upholding the 1974 cease

and desist order became final years ago.** The Third

* Bell System Tariff Offerings, 46 FCC 2d at 438-439. Refusal

to interconnect is fundamentally inconsistent with the policy of

assuring “full and fair competition” which was established in

Specialized Carrier. Nothing could be more destructive of full and

fair competition than to have one competitor, with monopoly power

over facilities required for the provision of its competitor’s law-

ful services, attempt to foreclose provision of such competing serv-

ices by refusing access to the facilities required. In Otter Tail

Power Co. v. United States, 410 U.S. 366, 377, reh. denied,

411 US. 910 (1973), the Supreme Court found unlawful the refusal

to interconnect by a utility with monopoly power in one service

area with smaller municipal systems requiring such interconnection.

Full and fair competition requires that those who control access

to an essential facility must grant access on reasonable and non-

discriminatory terms to all in the trade. United States v. Griffith,

aan . chen. ( oa Lorain Journal v. United States, 342 U.S.

, ; United States v. Terminal Railro ati

of St. Louis, 224 U.S. 383 (1912). ee saearmn

** The 1978 Commission itself, in the first footnote to its order

below (AT&T App. 1c), made clear that the AT&T petition it there

addressed could not properly be considered within the framework

of the administrative proceeding that had given rise to the 1974

cease and desist order. It declared:

That petition has been styled as “In the Matters Of BELL

SYSTEM TARIFF OFFERINGS of Local Distribution Facili-

ties for Use by Other Common Carriers; and Letter of Chief,

Common Carrier Bureau, dated October 19, 1973, to Laurence

E. Harris, Vice President MCI Telecommunications Corpora-

Circuit never had the Execunet controversy before it.

The 1974 cease and desist order and the later Execunet

orders are quite distinct and encompass different factual

and procedural backgrounds. In such circumstances, ju-

risdiction properly resides with the D.C. Circuit. Mid-

west Video Corp. v. United States, 362 F.2d 259, 261

(8th Cir. 1966). The D.C. Circuit has given. full effect

to the Third Circuit’s decision as a final determination

of the dispute which was before the latter court.

AT&T’s jurisdictional argument is particularly inap-

propriate in view of the fact that it failed below to

move to transfer this case to the Third Circuit, but in-

stead raised its Hobbs Act *° argument only after it had

lost on the merits in the D.C. Circuit. We believe that

in making its decision not to raise this argument earlier,

AT&T must have realized that the Third Circuit was no

more likely to let it get away with refusing Execunet

interconnections in 1978 than it had been to let it refuse

FX and CCSA interconnections in 1974. Clearly, AT&T

is now seeking two bites from the same apple.

City of Tacoma v. Taxpayers of Tacoma, 357 U.S.

320 (1958), does not support AT&T’s Hobbs Act argu-

ment. In that case, the State of Washington was held

to be precluded, by virtue of a statute similar to the

Hobbs Act, from attacking collaterally in a state court

a Federal Power Commission order which had already

been reviewed by a federal court of appeals. Indeed,

the only relevance the Tacoma case has here is that the

Court there established that a litigant may not reserve

tion, FCC Docket No. 19896.” Inasmuch as Docket No. 19896

has been terminated for more than two years, the petition

should have been styled as a new proceeding. The petition and

all comments or other pleadings relating to this petition will be

filed in the instant proceeding, which shall be considered as

separate and distinct from the terminated Docket 19896 pro-

ceeding.

*° 28 U.S.C. § 2341 et seg.; AT&T App. 3f.

a “point, for another round of piecemeal litigation, by

remaining silent on the issue while its action to review

and reverse the Commission’s order was pending in that

court—which had ‘exclusive jurisdiction’. . .” 357 U.S.

at 339. It is of course just such “piecemeal litigation”

that petitioners have been practicing—not merely by

failing to raise their Hobbs Act argument in the D.C.

Circuit but, more importantly, by dissimulating their

present interconnection position throughout the course of

the Execunet I litigation.

IV. There Was No Error in Construction of Section 201(a)

of the Communications Act

Petitioners attempt to distort the question addressed

below into one of whether the court of appeals deprived

the telephone industry of a hearing under Section 201

(a) of the Communications Act ® to determine whether

it would be in the public interest to require AT&T to

provide interconnections for use with Execunet. In fram-

ing the question in this fashion, the petitioners have

ignored the fact that the telephone companies have been

under a duty, imposed under Section 201, to provide

interconnections for MCI ever since Specialized Carrier,

and that this duty was reaffirmed in Bell System Tariff

Offerings where the Commission held that “our prior

orders covered interconnection for the broad range of

services which the specialized carriers are authorized to

provide and that Bell has been directed to furnish inter-

connection facilities for the purpose of enabling MCI and

the other specialized carriers to provide all such

The court of appeals held in Execunet I that MCI was

authorized to provide Execunet, and this Court denied

51 46 FCC 2d at 426.

review. Reading Execunet I together with the intercon-

nection orders issued by the 1971 and 1974 Commissions,

the only reasonable conclusion that can be reached is that

MCI has the right to obtain from AT&T the interconnec-

tions necessary for the provision of Execunet. Since the

court below found that such interconnections had already

been ordered by the FCC—with the approval of the Third

Circuit—it was unnecessary for it to reach the question

of statutory interpretation as to whether there would be

an obligation to provide the interconnections in the ab-

sence of an agency order to do so.”

5? MCI believes, however, that such an obligation would exist

even in the absence of an interconnection order. Section 201(a) of

the Communications Act reads as follows (emphasis added) :

It shall be the duty of every common carrier engaged in inter-

state or foreign communication by wire or radio to furnish such

communication service upon reasonable request therefor; and,

in accordance with the orders of the Commission, in cases where

the Commission, after opportunity for hearing, finds such

action necessary or desirable in the public interest, to estab-

lish physical connections with other carriers, to establish

through routes and charges applicable thereto and the divisions

of such charges, and to establish and provide facilities and regu-

lations for operating such through routes.

This section imposes two kinds of interconnection obligations on a

common carrier, one requiring no hearing and the other to be im-

posed only after hearing. The first clause of Section 201(a), which

is emphasized above, simply states the normal obligation of a carrier

to provide service to all upon reasonable request. When read with

Section 202 of the Communications Act, 47 U.S.C. § 202, which

prohibits unjust or unreasonable discrimination, the Communica-

tions Act requires that a carrier provide service on a nondiscrimina-

tory basis. That is the Act’s clear meaning, without any need for

construction. It states an obviously sound policy. Congress cer-

tainly did not intend that one requesting such service should have

to go through a hearing to get it. Rather, he is entitled to service

upon reasonable request—subject only to the availability of the

facilities needed.

The interconnection facilities for Execunet are simply local business

telephone arrangements (or business lines) which give a customer—

whether a competing carrier or a local businessman—interconnec-

tion access to the local exchange. They are the same interconnections

as are supplied by local telephone companies to AT&T Long Lines

for its FX service which competes with MCI’s Execunet.

V. The Court of Appeals Did Not Usurp The Role of

the Administrative Agency

Petitioners’ invocation of Vermont Yankee Nuclear

Power Corp. v. Natural Resources Defense Council, 98

S. Ct. 1197 (1978), is an exercise in irrelevance. The

decision of the court of appeals here in no way interferes

with the FCC’s statutory obligation to inquire into the

public interest and to implement any findings it makes as

a result of such inquiry. Indeed, the decision encourages

the agency to do exactly that. In its May 11, 1978 de-

cision denying a stay pending consideration of new pe-

titions for certiorari, the court stated that:

USITA emphasizes, as did the Commission and AT&T

in their suggestions for rehearing en banc, that it

is the responsibility of the Commission to determine

whether competition by services such as Execunet

is in the public interest. With that point we are in

complete agreement. Recognition of the Commission’s

public interest responsibilities, however, provides no

basis for upholding its February 23 declaratory rul-

ing in view of the clear inconsistencies with the

Execunet case. For the Commission’s declaratory

ruling was not based on considerations of the public

interest, and it in no way reflected a Commission de-

cision that expansion of Execunet service would

adversely affect the public interest. Rather, it re-

flected only the Commission’s interpretation of the

statutory provisions of the Communications Act and

of earlier decisions rendered by the Commission, the

Third Circuit, and, most importantly, this court in

Execunet I, Indeed, it was the Commisison’s pro-

hibition of Execunet service without any considera-

tion of the public interest in the first instance which

led to this long series of litigation.

The decision of the court of appeals does not decide

basic questions of public policy or establish new proce-

58 AT&T App. 8b-9b.

dural rules. The court has explicitly left all public in-

terest determinations to be made by the agency. The

agency is now in the initial stages of a proceeding in

which those public interest determinations will be made.

MTS and WATS Market Structure, supra. All the court

** Congress is also in the process of considering these public

interest questions. AT&T has for some time been employing its sub-

stantial political influence to gain Congressional aid in its efforts

to perpetuate its de facto monopoly and eliminate all competition. It

succeeded in having proposed legislation introduced to accomplish

this objective. S. 3192, 94th Cong., 2d Sess. (1976); H.R. 12323,

94th Cong., 2d Sess. (1976); S. 530, 95th Cong., Ist Sess. (1977);

H.R. 8, 95th Cong., Ist Sess. (1977). Among other things, AT&T’s

proposed legislation would prevent MCI and the other specialized

carriers from providing even the traditional forms of private line

service to which it has long contended they should be limited. In-

deed, AT&T’s proposed legislation would limit the specialized car-

riers to services which cannot be provided by AT&T and would make

it well nigh impossible for MCI to obtain authorization to do even

that much. AT&T’s efforts, however, have not been successful. On

June 7, 1978, the Chairman and ranking minority member of the

Subcommittee on Communications of the House Interstate and

Foreign Commerce Committee introduced E.R. 13015, the “Com-

munications Act of 1978.” Section 331 thereof provides that:

In the exercise and performance of its powers and duties under

this part, the Commission shall—

(1) place maximum feasible reliance on marketplace forces

to achieve the purposes of this part;

(2) promote the maintenance of nationwide basic voice

telephone service at affordable rates achieved by regu-

lation (when marketplace forces are deficient) which

provides for equitable treatment of all common car-

riers and by direct assistance where appropriate;

(3) rely on competition to provide efficiency, innovation,

and low rates, and to determine the variety, quality,

and costs of telecommunications services;

(4) establish full and fair competitive conditions; and

(5) prevent practices which would allow any carrier to

limit or exclude competition in the provision of tele-

communications services.

This is a ringing declaration that sound public policy requires

maximum reliance on competition in telecommunications.

did was to inform the Commission that the public in-

terest determinations necessary for a limitation of MCI’s

Execunet service had not yet been made and that MCI

was therefore authorized to provide Execunet at the

present time and had a right to the necessary i: -zon-

nections from the telephone industry.

CONCLUSION

The Court should deny the petitions for a writ of

certiorari.

Respectfully submitted,

Of Ccunsel: MCI Telecommunications Corporation

JOHN R. WORTHINGTON gira os ine.

1150 - 17th Street, N.W. f

Washington, D.C. 20036 MICHAEL H. BADER

(202) 872-1600 KENNETH A. Cox

September, 1978 be J ey ”

HALEY, BADER & Potts

1730 M Street, N.W.

Washington, D.C. 20036

(202) 331-0606

Their Attorneys

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.