Amicus Curiae Brief — Verizon Communications Inc. v. Law Offices of Curtis v. Trinko, LLP

3 Supreme Court, uS.

FILED

SI re RR CBee gs

IN THE CLERK

Supreme Court of the United States

VERIZON COMMUNICATIONS, INC..,

Petitioner,

V.

LAW OFFICES OF CURTIS V. TRINKO, LLP,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals for the Second Circuit

BRIEF AMICUS CURIAE OF

CONSUMERS UNION AND

CONSUMER FEDERATION OF AMERICA

IN SUPPORT OF RESPONDENT

CHRISTOPHER L. MURRAY MICHAEL D. MCNEELY

TELECOMMUNICATIONS Counsel of Record

AND INTERNET COUNSEL CHRISTY C. KUNIN

CONSUMERS UNION PATRICK J. O° CONNOR

1666 Connecticut Ave., NW GRAY CARY WARE &

Suite 310 FREIDENRICH LLP

Washington, DC 20009 1625 Massachusetts Ave., NW

(202) 238-9253 Suite 300

Washington, DC 20036

CONSUMER FEDERATION (202) 238-7788

OF AMERICA

1424 16th St., NW, Counsel for Amici Curiae

Suite 604

Washington, DC 20036

(202) 387-6121

.’

TABLE OF CONTENTS

REI enn aS i

TABLE OF AUTHORITIES .....0..........cccccccccsccssscsscsscoscosecsee. ii

INTEREST OF AMICI CURIAE o.0....cccccsccoecieccceseesesceseeseee l

SUMMARY OF ARGUMENT ...0..0.....cccccccccescessscssescessoecesee. 2

SEER Sa ae ome DON SR Dee eS 7

I. THE COMPLAINT ALLEGES ALL THE ELEMENTS

OF MONOPOLIZATION, INCLUDING

EXCLUSIONARY CONDUCT .00.0...ccccccccccecsesceccsceseeee. 7

Il. THE COURT SHOULD NOT RESTRICT THE

STANDARDS FOR IDENTIFYING

EXCLUSIONARY CONDUCT ooooo.occccccccccsecescsseeeesce 10

A. A Finding of Exclusionary Conduct Should be

Grounded in Consumer and Competitive Harm...... 10

B. The Essential Facilities Doctrine Provides a Useful

Framework for Identifying Exclusionary Conduct . 13

C. Regulation Does not Justify De Facto Antitrust

RST EEE sr i anata ne 15

Ill. RESPONDENT HAS STANDING TO MAINTAIN

ee iticnamnniienaiiiibinniaiiniiai iar cs ianaciaeeen 18

A. Trinko’s Injury was Sufficiently Direct to Warrant

Antitrust Standing................c.ccccccscecessesessssecseceeseeee. 20

B. The Complaint Does Not Seek Damages that Will

Lead to Complex Apportionment or Duplication... 23

C. Trinko is a Suitable Plaintiff Because the Harm

Suffered Is Precisely What the Antitrust Laws Seek

REET TREES LENE ee 24

SEEPePnNTIT thst 26

—

ii

TABLE OF AUTHORITIES

Cases

Alaska Airlines, Inc. v. United Airlines, Inc.,

ee FT, Lee, | ne 14, 15

Aspen Skiing v. Aspen Highlands Skiing Corp.,

S72 UB. FSS COP cccessssssecssniennineeiaa passim

Associated General Contractors v. California

Council of Carpenters, 459 U.S. 519 (1983) ........... passim

Blue Shield of Virginia v. McCready, 457 U.S.

| | passim

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,

G3D UB. SET (RSTO carecnresnsssrentnaininaninaa Ssciiananis 20, 23, 24

Conley v. Gibson, 355 U.S. 41 (1957).......:cccccccesseeeeseeeeeeeeees 8

Conwood Co. v. U.S. Tobacco Co., 290 F.3d

768 (6th Cir. 2002), cert. denied 154 L.Ed. 2d

BSD CIID corenceccccsesessseseesosensesenmensioniiaiannsananianananna 12

Covad Communications Co. v. BellSouth Corp.,

299 F.3d 1272 (11th Cir. 2002), cert.

parading, Ma. Gb> 1435.’ ....cnscesesesessnssennsenienmennsannnntts 17

Eastman Kodak Co. v. Image Tech. Svcs., Inc.,

FOO UB. GB COIR: cccsesnsenssersssnnieessimmnanamnaa 12

Essential Communications Sys., Inc. v. AT&T,

610 F.28 21346 (36 Coe. BG TIP wccecccescensvcncesqucessnunnunenamnnninn 17

Fishman vy. Estate of Wirtz, 807 F.2d 520 (7"

| SS ER 14

Hawaii v. Standard Oil Co., 405 U.S. 251

(BDFD .<cceccecevscesssensnssonsssnsnsessennnsenniensininisaanannaannnnnnnnn 25

Hecht v. Pro-Football, Inc., 570 F.2d 982 (D.C.

Cir. 1971) , cert. denied 404 U.S. 1047

(| a 14

Hospital Building Co. v. Trustees of Rex

Hoapital, 425 U.S. TSB (1DTE) ...ccccoccecccccssceseosecsvsnsesecssosons 8

Illinois Brick Co. v. Illinois, 431 U.S. 720

(| Ea ee 24, 25

,

<, <a

—— ee ee

iii

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

LAT 11

Mandeville Island Farms v. American Crystal

Sugar Co., 334 U.S. 219 (1948) .........cccccccceescescesseeceeeeeees 18

Maple Flooring Manufacturers Assn. v. United

ee 12

MCI Communications Corp. v. AT&T, 708 F.2d

1081 (7th Cir.), cert. denied 464 U.S. 891

Irn siaiaseibdieiadetinnneninietieeenesndentasetscngeonscescnenscecs 13, 14, 15, 16

Olympia Equip. Leasing Co. v. Western Union

Tel. Co., 797 F.2d 370 (7th Cir. 1986) .........ccccccccceees 14, 15

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

EEE EES 14, 18

Phonetele, Inc. v. AT&T, 664 F.2d 716 (9th Cir.

1981), cert. denied 459 U.S. 1145 (1983)............000.. 16, 17

Reiter v. Sonotone Corp., 442 U.S. 330 (1979)............. 10, 20

Southern Pacific Communications Co. v. AT&T,

740 F.2d 980 (D.C. Cir. 1984), cert. denied

es 16, 17

Swierkewicz v. Sorema, 534 U.S. 506 (2002).............. 8,9, 10

Twin Laboratories, Inc. v. Weider Health &

Fitness, 900 F.2d 566 (2d Cir. 1990) ........ccccccceeeceeeeeeeeee 15

United States v. Microsoft, 253 F.3d 34 (D.C.

Cir. 2001) (en banc; per CUTIAM) ...........c.ccc00cc000e00e0s 11,12

Zenith Radio Corp. v. Hazeltine Research, Inc.,

EE 19

Statutes

EE 18

EEE 16

Other Authorities

ABA Section of Antitrust Law, Antitrust Law

Developments (Sth ed. 2002) ............c.cccceeeceecereeeeeeeeeeeees 13

Areeda, The Essential Facility Doctrine: An

Epithet in Need of Limiting Principles, 58

Er 13, 18

iV |

P. Areeda & H. Hovenkamp, Antitrust Law : INTEREST OF AMICI CURIAE'

I cecsccccssrunsiieneininaninisiauniniimiancuniasminneneinnsiadmdaniiins 10 . .

_ Areeda & H. Hovenkamp. Fundamentals o Consumers Union, publisher of Consumer Reports

' suede — SS d meinem passim Magazine, is a non-profit, independent testing and consumer

protection organization serving only consumers. Since 1936,

Consumers Union has been a comprehensive source for

unbiased reporting about goods, services, health, personal

finance, and other consumer concerns. The organization is

funded s lely from the sale of Consumer Reports (in print

and online) and other services, and from nonrestrictive,

noncommercial contributions, grants, and fees.

Consumers Union engages regularly in consumer

advocacy before the executive, judicial, and legislative

branches of government. Consumers Union is committed to

securing for consumers the benefits that inure from

competitive telecommunications markets, especially lower

prices and ‘mproved quality of service.

The Consumer Federation of America (CFA) counts

among its members more than 285 consumer advocacy and

education organizations throughout the nation with a

| combined membership exceeding 50 million people. CFA

| disseminates information on consumer issues, provides

| support to national, state, and local organizations committed

to consumer advocacy and education, and conducts policy

studies that examine aspects of the marketplace and their

consumer impacts. CFA works as an advocate for pro-

consumer policy before federal and state legislatures and

regulatory agencies, and the courts. The breadth of CFA’s

| membership enables CFA to speak for virtually all

consumers on decisions that affect their lives.

| ' No counsel for a party authored this brief in whole or in part. No one

other than amici curiae or their counsel made a monetary contribution to

the preparation or submission of this brief. In letters filed with the Clerk

of the Court, the parties have consented to the filing of all amicus briefs.

2

CFA has consistently advocated policies and programs

that help ensure, among other things, a marketplace with

vigorous competition and adequate consumer redress. An

important area of focus for CFA has been utilities. To

advance the interests of consumers, CFA has advocated

greater competition in telephone, electric, and natural gas

markets while seeking to ensure that consumers share in the

benefits of this competition.

Consumers Union and CFA respectfully submit this

brief amicus curiae because a proper, pro-consumer

application of the antitrust laws is particularly important in

the telecommunications industry. Competitive conditions in

this industry touch virtually every consumer. We believe that

vigorous, beneficial competition can most likely be achieved

by adhering to the congressional design of allowing

regulation and antitrust enforcement to complement each

other, and by interpreting the antitrust laws as intended by

Congress with the welfare of consumers as the principal

policy objective. Consumers Union and CFA also regard it

as vital that consumers, who are often the immediate focus

and always the ultimate victims of ant:competitive conduct,

have standing to vindicate their rights under the antitrust

laws.

SUMMARY OF ARGUMENT

In this case, Petitioner seeks a radical narrowing of

Section 2 of the Sherman Act, virtual immunity from

antitrust scrutiny of its commercial dealings with rivals who

threaten its monopoly of local telephone service, and

protection from antitrust challenges by the very consumers

whose economic welfare is the Sherman Act’s primary goal.

Those results are unwarranted, and the Court should affirm

the judgment of the Court of Appeals reinstating

Respondent’s Complaint.

3

The Court should affirm regardless of any decision it

might make on the issues of monopolization law that

Petitioner and supporting amici have raised. Petitioner and

amici restrict their focus to the requirements for proving that

a monopolist’s conduct is illegally exclusionary and the

validity of the court of appeals’ articulation of the monopoly

leveraging doctrine. The question before the Court, however,

is whether Respondent’s Complaint states a valid claim. It

does. The Complaint alleges all that is necessary to establish

a violation of Section 2 of the Sherman Act, including

allegations that Verizon’s conduct was exclusionary and that

Verizon has monopoly power in the relevant market.

A court may not dismiss a complaint unless under its

allegations there is no conceivable set of facts that plaintiff

could prove to establish a right to relief. The Complaint

charges Verizon with monopolization. No one challenges the

adequacy of Trinko’s allegation that Verizon has monopoly

power in the relevant market, the first element of the offense.

Rather, Petitioner and amici address the standards for

determining whether a monopolist’s conduct is

“exclusionary” by challenging the court of appeals’ decision

as it relates to refusals to deal and the essential facility

doctrine.

Lost in the argument about essential facilities and

refusals to deal, however, is the fact that the Complaint in

this action sufficiently alleges illegal conduct by Verizon. In

addition to an explicit allegation of exclusionary conduct, the

Complaint includes other allegations that if proven would

establish that Verizon’s conduct was illegal, and makes

particular factual allegations describing the exclusionary

nature of the conduct. The United States asserts that the

Complaint is deficient. Any such effort to color this matter as

a true controversy must fail, since the Complaint far exceeds

the standards required under the Federal Rules of Civil

Procedure. However the Court might decide the antitrust

4

issues Petitioner and amici have raised, the result will be the

same: the court of appeals’ reinstatement of Trinko’s

Complaint will be affirmed.

A monopolist’s conduct is exclusionary when it harms

consumers and competition. The limited approach of

restricting exclusionary conduct to that which makes no

business sense apart from its tendency to create monopoly

returns loses sight of the consumer welfare purpose at the

heart of the Sherman Act in favor of a focus on the

defendant’s business. Effects on competition and consumers

of the type alleged in the Complaint cannot be ignored

simply because the defendant’s conduct might have led to

some business benefit, however slight.

The Court should also reject the call to deem refusals to

deal illegal only when the defendant refuses to provide a

competitor exactly what it is providing to others, on exactly

the same terms. Such a rule would create a perverse

incentive: a monopolist might choose never to share with

competitors simply to avoid liability. In addition, creation of

that rule would be inconsistent with the Court’s general

unv ulingness to fashion special rules for Sherman Act cases,

preferring instead to allow cases to be decided on their facts.

ie essential facilities doctrine is a useful method for

ide...fying exclusionary conduct, but this case is not an

appropriate occasion for the Court to consider the validity or

contours of the doctrine. The doctrine has been widely

adopted by the lower courts, and, contrary to Verizon’s

suggestion, enjoys robust support in precedent. For the

reasons summarized above, the doctrine should not be

limited by the requirement that the refusal to provide a

facility make “no business sense” apart from its capacity to

enhance monopoly power.

5

This case is not an appropriate vehicle for considering

the essential facilities doctrine. As discussed above, the

Complaint sufficiently alleges illegal monopolization

without reference to anyone’s version of the doctrine. A

ruling on the doctrine, moreover, would not have the benefit

of a full record. Finally, there is little reason to believe that

the courts’ application of the doctrine has led to any of the

dire results that its critics attribute to it.

Regulation under the Telecommunications Act of 1996

cannot justify de facto antitrust immunity for conduct in

areas touched by that Act. The arguments offered to reach

just that result have repeatedly been rejected when cast as

arguments for explicit antitrust immunity. There is no factual

basis for the de facto immunity sought here — only

suppositions that regulation under the Act will work so

perfectly that there is no role for the antitrust laws, and that

antitrust enforcement will interfere unduly with that

regulation. These suppositions are flatly inconsistent with the

congressional design, which was to couple antitrust scrutiny

with regulation under the 1996 Act. There is no reason to

depart from the established method of determining the

antitrust significance of regulation: by considering its impact

in particular cases, and on the basis of facts, not supposition.

Respondent has standing to maintain this action. It is

not disputed that the Complaint alleges injury-in-fact that

constituted antitrust injury. In addition, the alleged injury is

sufficiently direct to justify antirust standing, does not raise

significant issues of apportionment or double recovery of

damages, and is of a type that makes Trinko a suitable

antitrust plaintiff.

Respondent is the immediate victim of the alleged

conduct by Verizon. The effect on Trinko alleged in the

complaint was an inevitable result of Verizon’s actions, with

no “chain of causation,” because Verizon’s local service

6

competitors had no alternative to dealing with Verizon and

visiting on consumers the injuries that Verizon’s conduct

allegedly caused. In addition, the injury to plaintiff was

“inextricably intertwined” with the injury to affected

competitors. Plaintiff is a consumer in the market directly

affected by the alleged conduct, and was thus directly

disserved by the lessening of competition in that market.

Finally, Trinko’s injuries were a foreseeable and proximate

result of the illegal conduct.

Respondent’s claims will not lead to duplicative

recovery or problems with the apportionment of damages.

Trinko’s injury — poor telephone service from competitive

carriers — is distinct from those of the competitors, which

will focus on lost competitive opportunities. In addition, this

case does not involve any prospect of “passing on” that will

complicate the task of ascertaining damages.

Consumers in Trinko’s position have strong incentives

to identify and prevent anticompetitive conduct by telephone

monopolists. They face the Hobson’s choice of choosing

degraded service from competitors or dealing with an

established monopolist. Disadvantaged competitors,

moreover, cannot necessarily be counted on to vindicate the

public interest in antitrust enforcement. Their incentive to

pursue antitrust challenges like this is tempered by the

knowledge that they depend on and must deal on a day-to-

day basis with a powerful prospective defendant.

For all these reasons, the Court should affirm the

judgment of the court of appeals.

7

ARGUMENT

I. THE COMPLAINT ALLEGES ALL THE

ELEMENTS OF MONOPOLIZATION,

INCLUDING EXCLUSIONARY CONDUCT

In this case the Court will determine whether dismissal

is proper because the Complaint fails to state a claim upon

which relief can be granted. Verizon proposes antitrust

standards to be applied in making that determination, but its

argument never once refers to the Complaint. This is

understandable, because however the Court might resolve

the issues Verizon raises, the Complaint states a valid claim

of monopolization. The Court is really being asked,

therefore, to affirm the decision of the Court of Appeals and

return the matter to the lower courts with an advisory

opinion on the law of monopolization. The Department of

Justice and the Federal Trade Commission have in essence

acknowledged that possibility. On Petition for a Writ of

Certiorari to the United States District Court for the Second

Circuit, Drief for the United States and the Federal Trade

Commission as Amici Curiae at 18-19. Notwithstanding that

acknowledgement, the United States asserts that because the

Complaint does not adequately allege that Verizon’s conduct

was exclusionary, the action should be dismissed.’

A claim of illegal monopolization has two elements:

“(1) the possession of monopoly power in the relevant

market and (2) the willful acquisition or maintenance of that

* United States Br. at 28-29. The United States also criticizes the court of

appeals’ discussion of monopoly leveraging. Since the Complaint

properly alleges the element that is said to be missing from the court of

appeals’ monopoly leveraging discussion - monopoly power in the

relevant market — the disposition of this matter could not be affected bya

ruling on the issue. The United States comes close to conceding that the

allegations of the Complaint make any dispute about monopoly

leveraging a moot point. /d. at 26 n.12.

8

power as distinguished from growth or development as a

consequence of a superior product, business acumen, or

historic accident.” United States v. Grinnell Corp., 384 U.S.

563, 570-71 (1966). The Complaint alleges the requisite

market power, J.A. 45 (Am. Compl. § 48), and the adequacy

of that allegation is not questioned. The only remaining

issue, therefore, is whether the Complaint adequately alleges

the second Grinnell element, “exclusionary conduct.” Aspen

Skiing v. Aspen Highlands Skiing Corp., 472 U.S. 585, 602

(1985). The United States is wrong in judging the Complaint

deficient in that regard.

A complaint may be dismissed only if, under its

allegations, there is no conceivable set of facts that the

plaintiff could prove to establish a right to relief. Hospital

Building Co. v. Trustees of Rex Hospital, 425 U.S. 738, 746

(1976) (“a complaint should not be dismissed for failure to

state a claim unless it appears beyond doubt that the plaintiff

can prove no set of facts in support of his claim which would

entitle him to relief,” citing Conley v. Gibson, 355 U.S. 41,

45-46 (1957)). Complaints, moreover, need not detail the

factual basis of the plaintiff's claims, but must only give fair

notice of the claims the defendant faces. Swierkewicz v.

Sorema, 534 U.S. 506, 512 (2002).

Trinko’s Complaint more than meets these

requirements. It alleges that Verizon engaged in

“exclusionary and anticompetitive behavior”; attempted to

reduce competitors’ market share “on a basis other than

efficiency;” and, “impaired competition . . . im an

unnecessarily restrictive way.” J.A. 46 (Am. Compl. 52). In

addition, the Complaint alleges that Verizon lacked a valid

“business reason” for its conduct. J.A. 47 (Am. Compl.

457). Each of these allegations describes exclusionary

conduct. See Aspen Skiing, 472 U.S. at 604, 605, 608-09.

|

|

|

|

DCO wt _

9

The Complaint also identifies particular exclusionary

behavior. It alleges that Verizon provided service to

competitors at a lower level than it provided itself, J.A. 39,

46 (Am. Compl. 4§ 21, 54); deviated from its normal

schedule for filling competitors’ orders, J.A. 39 (Am. Compl.

{| 21); failed to fill competitors’ orders on a timely basis or at

all, id.; and failed to inform competitors of the status of their

orders, id. The Complaint goes on to allege that Verizon’s

behavior injured competitors and adversely affected

consumers’ ability to obtain satisfactory telephone service.

J.A. 47 (Am. Compl. § 57). A showing that conduct by a

monopolist degrades the service consumers receive and

injures competitors can establish that that conduct is

exclusionary. Aspen Skiing 472 U.S: at 605 (“impact on

consumers and whether [conduct] has impaired competition

in an unnecessarily restrictive way” is relevant to

exclusionary characterization).

According to the United States, all this is not enough,

because Trinko was required to plead that Verizon’s conduct

“would not make business sense unless it tended to eliminate

or lessen competition.”? Whatever merit this has as an

articulation of the exclusionary conduct requirement, it is not

the only way to notify a defendant of a claim for

monopolization, even when access to the monopolist’s

facilities may be at issue. The various formulations of the

conduct element articulated in Aspen Skiing are proof

enough of that. Aspen Skiing 472 U.S. at 604, 605, 608-09.

The Complaint alleges that Verizon’s conduct was

exclusionary, anticompetitive, and unnecessarily restrictive;

it further alleges that the conduct lacked valid business

reasons, injured competitors and adversely affected

* United States Brief at 28. The United States also calls for allegations

related to prices, costs and profitability. /d. There is no requirement to

plead such evidentiary detail in a complaint. Swierkewicz v. Sorema, 534

U.S. at 511-12.

10

consumers. It also identifies particular respects in which that

conduct harmed consumers and competition. Those

allegations unquestionably notify Verizon of the nature of

and basis for Respondent’s claim. That is all that is required

in a complaint, Swierkewicz v. Sorema, 534 U.S. at 514, and

for that reason the decision of the Court of Appeals must be

affirmed.

II. THE COURT SHOULD NOT RESTRICT THE

STANDARDS FOR IDENTIFYING

EXCLUSIONARY CONDUCT

A. A Finding of Exclusionary Conduct Should be

Grounded in Consumer and Competitive Harm

A monopolist’s conduct is illegal when, considering its

impact on consumers, it “impaired competition in an

unnecessarily restrictive way.” Aspen Skiing, 472 U.S. at

605. This standard for exclusionary conduct is directed to the

consumer welfare purpose at the heart of the Sherman Act,

Reiter v. Sonotone Corp., 442 U.S. 330, 343 (1979), yet

flexible enough to encompass the many varieties of conduct

that might illegally maintain or extend monopoly power.

Verizon and amici would restrict exclusionary conduct

to that which makes no business sense apart from its

tendency to create monopoly returns. Brief for Petitioner at

21, 22; United States Brief at 15 (“no economic sense’’), 16.

This limited test fails to encompass the harms at which

Section 2 is directed. By focusing entirely on the defendant’s

perspective and its reasons for its conduct, the “no business

sense” approach overlooks the effect of the challenged

conduct on competition and consumers. “[AJn expectation of

consumer harm must always be at the logical end of any

determination that a particular act ‘monopolizes,’ and thus

satisfies §2’s conduct requirement.” 3A P. Areeda & H.

Hovenkamp, Antitrust Law § 651d1, at 80.

1]

Under the Complaint, it is open to Trinko to prove that,

as a result of Verizon’s conduct, Verizon itself performed

less efficiently, its rivals were less capable competitors, -

competition suffered, and consumers were worse off. J.A.

39, 46, 47 (Am. Compl. 49 21, 54, 57). It cannot be that these

effects are of no consequence if the monopolist can establish

that its conduct led to some business benefit, however slight.

Rather, the legality of such conduct depends on an overall

assessment of net competitive effect — whether the conduct is

“unnecessarily restrictive.” Aspen Skiing, 472 U.S. at 605;

see also United States v. Microsoft, 253 F.3d 34, 59 (D.C.

Cir. 2001) (en banc; per curiam) (balance competitive harm

against business justification).

The Court should also reject Verizon’s proposal to

restrict illegality to circumstances in which the_ defendant

refuses to provide a competitor exactly what it is providing

to others on exactly the same terms. Verizon arrives at this

by deriving a rule essentially restricted to the facts of certain

of the Court’s decisions. Brief for Petitioner at 17-19. As an

initial matter, the proposed rule would be unwise from the

competitive point of view. It would give monopolists a

perverse incentive to guarantee against refusal to deal

liability by refusing to deal with competitors at all, even

when that relationship might be pro-competitive.

More generally, the Court has rejected invitations to

fashion special rules that would rigidly confine the inquiry in

Sherman Act cases. The consistent lesson of the Court’s

monopolization decisions has been that cases should te

decided by careful attention to their facts. In Aspen Skiing

the Court declined to be bound to the fact pattern of its

earlier decision in Lorain Journal Co. v. United States, 342

U.S. 143 (1951). Aspen Skiing, 472 U.S. at 603 (rule

establishing monopolist’s duty to deal “not so narrow that it

encompasses no more than the circumstances of Lorain

Journal’).

12

The Court reaffirmed this approach in its 1992 Kodak

decision:

Legal presumptions that rest on formalistic

distinctions rather than actual market realities are

generally disfavored in antitrust law. This Court has

preferrec to resolve antitrust claims on a case-by-

case basis, focusing on the “particular facts

disclosed by the record.”

Eastman Kodak Co. v. Image Tech. Svcs., Inc., 504 U.S. 451,

466-67 (1992), quoting Maple Flooring Mfrs. Assn. v.

United States, 268 U.S. 563, 579 (1925).

Here, too, the Court should eschew a formalistic rule

and allow the case to proceed to an examination of “actual

market realities.” A variety of decisions illustrate why courts

must have that flexibility if they are to protect consumers

from the many exclusionary tactics that a monopolist might

devise.‘ Such considerations are particularly significant in

this case. Trinko’s Complaint alleges that Verizon restrained

competition and caused consumers to suffer poor service

through conduct that as alleged would be illegal regardless of

whether it is characterized as a refusal to deal. J.A. 39, 46, 47

(Am. Compl. ¥§ 21, 54, 57). The proposed restrictions on

refusal to deal doctrine might therefore have no application

in this case.

* E.g., Conwood Co. v. U.S. Tobacco Co., 290 F.3d 768 (6th Cir. 2002),

cert. denied 154 L.Ed. 2d 850 (2003); United States v. Microsoft, 253

F.3d 34 (D.C. Cir. 2001).

13

B. The Essential Facilities Doctrine Provides a

Useful Framework for Identifying Exclusionary

Conduct

The essential facilities doctrine is normally understood

to require a showing of four circumstances: (1) control of the

essential facility by a monopolist; (2) a competitor's inability

practically or reasonably to duplicate the essential facility;

(3) the denial of the use of the facility to a competitor; and

(4) the feasibility of providing the facility.’ This articulation

of the doctrine has gained wide acceptance in the lower

courts. 1 ABA Section of Antitrust Law, Antitrust Law

Developments at 279, n.283 (Sth ed. 2002). By applying the

four MCI factors, a court can systematically evaluate the

effect of a monopolist’s conduct. The United States finds

that the MC/ test can be “helpful,” and details the relevance

of three of its four elements. United States Brief at 21 n.6.

The United States proposes that the Court severely limit

the doctrine by adopting the defendant-focused approach

suggested above — that the challenged refusal of access must

make “no business sense.” United States Brief at 20-25. For

all the reasons discussed above, that approach is fatally

flawed, because it is at best a partial answer to the

fundamental ~ questions: whether a denial of essential

facilities harms consumers and is anticompetitive. Supra

Section I. If those questions are properly answered in an

essential facilities case, the doctrine is a useful analytical

approach that will yield beneficial results for consumers and

competition.

* MCI Communications Corp. v. AT&T, 708 F.2d 1081, 1132-33 (7th

Cir.), cert. denied 464 U.S. 891 (1983). Even Professor Areeda found

that the essential facilities doctrine yielded a correct result in MCI.

Areeda, The Essential Facility Doctrine: An Epithet in Need of Limiting

Principles, 58 Antitrust L.J. 841, n.21 (1989).

14

Verizon argues primarily that the essential, facilities

doctrine as Verizon interprets it does not apply in this case,

and urges the Court not to adopt the doctrine. Brief for

Petitioner at 40-43. We agree with Petitioner that the Court

should not consider the application of the essential facilities

doctrine in this case, but for far different reasons.

According to Verizon, MCI is the only case imposing

liability for unilateral action using an essential facilities

approach. In Hecht v. Pro-Football, Inc., 570 F.2d 982 (D.C.

Cir. 1971), cert. denied 404 U.S. 1047 (1972), however, the

essence of the essential facilities problem was the refusal of

a lease-holder to waive a lease covenant that gave it

exclusive access to a stadium to use for professional football

games. Although the lease agreement formed the basis for a

claim under Section 1 of the Sherman Act, the lease-holder’s

refusal was a unilateral act; there was no joint ownership of

the stadium by competitors that could serve as a principled

basis for distinguishing the decision as one involving

concerted action. Similarly, Fishman v. Estate of Wirtz, 807

F.2d 520 (7" Cir. 1986) also involved a unilateral refusal to

deal by a defendant who controlled a sports venue. Although

the court found a conspiracy between that defendant and

those who were given a lease to the facility, again the facility

was not controlled by a collection of competitors. In

addition, Aspen Skiing and Otter Tail Power Co. v. United

States, 410 U.S. 366 (1973), indisputably cases of unilateral

action, have been characterized by courts of appeals as

essential facilities decisions. Olympia Equip. Leasing Co. v.

Western Union Tel. Co., 797 F.2d 370, 376-377 (7th Cir.

1986) (Aspen Skiing, Otter Tail; Posner, J.); Alaska Airlines,

Inc. v. United Airlines, Inc., 948 F.2d 536, 543 (9th Cir.

1991) (Otter Tail). The essential facilities doctrine, therefore,

enjoys robust precedential support.

Nevertheless, this case is not an appropriate vehicle for

a ruling on the essential facilities doctrine, for several

15

reasons. As discussed above, the Complaint alleges all the

elements of illegal monopolization, including the

exclusionary conduct that is said to be missing from the

court of appeals’ articulation of the essential facilities

doctrine. Supra Section I; see United States Brief at 22. An

essential facilities ruling by the Court, therefore, will not

alter the result in this case. That ruling, moreover, would be

based on the mere allegations of a complaint — the thinnest

possible record at the earliest possible stage.

In addition, the treatment of the essential facilities

doctrine in the lower courts suggests that there is no need for

the Court now to reach out and rule on its validity or limits.

In particular, it does not appear that the doctrine has caused

the mischief attributed to it. In applying the doctrine, the

lower courts have interpreted its elements to take into

account the competitive concerns at stake.°

We respectfully submit that it would be prudent for the

Court to await a more fully developed record before

considering a ruling on the essential facilities doctrine.

C. Regulation Does not Justify De Facto Antitrust

Immunity

The law concerning the effect of regulation on antitrust

challenges to telephone monopolists has been characterized

by two important principles. First, the consistent holding of

courts before the passage of the Telecommunications Act of

1996 was that regulation of the telephone business does not

* See, e.g., Twin Laboratories, Inc. v. Weider Health & Fitness, 900 F.2d

566 (2d Cir. 1990); Olympia Equip. Leasing Co. v. Western Union

Telegraph Co., 797 F.2d 370 (7th Cir. 1986); MCI, supra. See generally,

Alaska Airlines, Inc. v. United Airlines, 948 F.2d at 543 (finding facility

“essential” only if it carries power to eliminate competition; analyzing

Twin Laboratories, Olympia and MC] as making similar finding).

16

create immunity from the antitrust laws. E.g., Southern

Pacific Communications Co. v. AT&T, 740 F.2d 980 (D.C.

Cir. 1984), cert. denied 470 U.S. 1005 (1985); Phonetele,

Inc. v. AT&T, 664 F.2d 716 (9th Cir. 1981), cert. denied 459

U.S. 1145 (1983). The 1996 Act seemingly put the matter

beyond question with a savings clause.’ Second, lack of

immunity notwithstanding, the effect of regulation on the

market can be taken into account in judging the antitrust

merits. Southern Pacific, 740 F.2d at 1000; Phonetele, 664

F.2d at 742-43.

Petitioner and the other incumbent telephone companies

argue that the antitrust laws should not apply when allegedly

illegal conduct implicates a duty subject to regulation under

the 1996 Act. Brief for Petitioners at 34-39; Brief Amicus

Curiae of BellSouth Corporation, SBC Communications Inc.,

and Qwest Communications International Inc. In Support of

Petitioner at 22-30. It is hard to see the limit on this position,

and Petitioner and amici suggest none. Its adoption would

mean that virtually all commercial relations between

incumbent carriers and the competitors to which they

wholesale would be exempt from antitrust scrutiny. This was

clearly not Congress’ intent.

The arguments offered to justify this de facto immunity

are essentially equivalent to the claims of “pervasive

regulation” that were regularly rejected as a basis for

immunity in the telephone industry before the

Communications Act included an antitrust savings clause.

See, e.g., MCI, 708 F.2d at 1101-v5. For the reasons

’ The “savings clause provides that “nothing in this Act or the

amendments made by this Act shall be construed to modify, , or

supersede the applicability of any of the antitrust laws.” 47 U.S.C. § 152

nt (b).

ss

17

articulated in MC/ and the consistent line of decisions to the

same effect,* this claim should be rejected again.

A per se conclusion that the antitrust laws do not apply

because regulation eliminates any risk to competition and

antitrust law somehow threatens the regulatory apparatus is

inconsistent with the evident intent of the 1996 Act’s savings

clause, which embodies a congressional judgment that there

should be two legal regimes promoting telephone

competition: regulation and antitrust. Covad

Communications Co. v. BellSouth Corp., 299 F.3d 1272,

1281-82 (11th Cir. 2002), cert. pending, No. 02-1423. It does

not do to assume, as Petitioner’s exemption argument must,

that the regulation that Congress created in the 1996 Act will

work with virtual perfection to protect consumers, but that

the congressional choice to couple regulation with antitrust

scrutiny was so flawed that the Court must undo that choice.

There is no factual basis — nor evidence — for the

conclusion that regulation will cure all competitive ills.

Verizon would have the opportunity at trial to offer proof

that regulation prevented harm to consumers from the

conduct alleged in the Complaint. See Phonetele, 664 F.2d at

742 (“impact of regulation must be assessed simply as

another fact of market life”). There is no warrant, however,

for any court simply to assume without proof that that has

occurred in this case, let alone in the broad class of cases the

Court is asked to preempt. In the final analysis, the issue is

the market effect of regulation, not what legislators wanted

that market effect to be. Southern Pacific, 740 F.2d at 1000;

Phonetele, 664 F.2d at 742-43. Making that determination

requires evidence that is not yet before the Court.

* E.g., Southern Pacific Communications v. AT&T, supra; Phonetele, Inc.

v. AT&T, supra; Essential Communications Sys., Inc. v. AT&T, 610 F.2d

1114 (3d Cir. 1979).

18

For the same reasons, the Court should reject the

unsupported prediction that antitrust cases involving conduct

regulated by the 1996 Act will threaten the regulatory

scheme of the 1996 Act. It bears repeating that Congress

explicitly confirmed that the legislative design includes

action under the antitrust laws; courts cannot simply ignore

that as an unwise choice. As this Court has previously

demonstrated, the presence of regulation can decrease

concerns about an antitrust court’s role in decisions

concerning regulated industries. See Otter Tail, 410 U.S. at

375-77; see also Areeda, The Essential Facility Doctrine, 58

Antitrust L.J. at 853. In addition, courts dealing with

regulated industries have recognized that they must

accommodate their rulings and remedies to avoid

interference with the regulatory scheme. F.g., Otter Tail, 410

U.S. at 381-82. There is no reason to assume that they will

shirk this duty.

III. RESPONDENT HAS STANDING TO MAINTAIN

THIS ACTION

Under section 4 of the Clayton Act, any person “injured

in his business or property hy reason of anything forbidden

in the antitrust laws may sue therefor.” 15 U.S.C. § 15. This

broad grant is “comprehensive in its terms and coverage,

protecting all who are made victims of the forbidden

practices by whomever they may be perpetrated.”

Mandeville Island Farms v. American Crystal Sugar Co.,

334 U.S. 219, 236 (1948). This court has thus held that any

limits on this broad grant must be based on congressional

intent. Associated General Contractors v. California Council

of Carpenters, 459 U.S. 519, 534-35 (1983); Blue Shield of

Virginia v. McCready, 457 U.S. 465, 472-73 (1982) (“in the

absence of some articulable consideration of statutory policy

suggesting a contrary conclusion in a particular factual

setting, we have applied § 4 in accordance with its plain

language and its broad remedial and deterrent objectives.”).

19

In determining whether a plaintiff has standing under the

antitrust laws, courts must assume the plaintiff can prove the

facts alleged in its complaint. Associated General

Contractors, 459 U.S. at 526; P. Areeda & H. Hovenkamp,

Fundamentals of Antitrust Law § 3.01, at 71 (2002).

Accepting the complaint’s allegations, courts first

ascertain that the plaintiff suffered injury-in-fact. Courts next

examine whether the plaintiff has alleged antitrust injury.

Finding both, the inquiry turns finally to ensuring that the

plaintiff satisfies other prudential concerns, including

ensuring a sufficiently direct claim, avoiding complex

apportionment or duplication of damages and establishing

that plaintiff is suitably positioned to vindicate the policies

animating every antitrust action. As discussed below, Trinko

satisfies these standing requirements.

It is clear from the Complaint that plaintiff suffered

injury-in-fact. “Causation, or injury-in-fact, requires a

showing that the injury of which the plaintiff complains

actually resulted from those acts of the defendant that

violated the antitrust laws.” P. Areeda & H. Hovenkamp.

Fundamentals of Antitrust Law ¥ 3.01d, at 68 (2002). The

complaint alleges that Trinko experienced poor service. J.A.

48 (Am. Compl. { 59). This poor service was “caused” by

defendant’s conduct. J.A. 47, 48 (Am. Compl. 4] 57, 59).

See Associated General Contractors, 459 U.S. at 542-43; see

generally Antitrust Law Fundamentals § 3.04. Verizon’s use

of its monopoly to impede its rival AT&T was the “material”

and “substantial” cause of the plaintiff's injury. J.A. 47, 48

(Am Comp. {J 57, 59). See Antitrust Law Fundamentals 4

3.04 at 88 (citing Zenith Radio Corp. v. Hazeltine Research,

Inc., 395 U.S. 100, 114 n.9 (1969)). Trinko therefore

demonstrates injury-in-fact sufficient to satisfy this aspect of

the standing inquiry.

20

The “antitrust injury” that plaintiff must also

demonstrate is “injury of the type the antitrust laws were

intended to prevent and that flows from that which makes

defendants’ acts unlawful.” Brunswick Corp. v. Pueblo

Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977). See also

Associated General Contractors, 459 U.S. at 539-40;

Antitrust Law Fundamentals ¥ 3.03, at 77. The Court has

been clear that “while an increase in price resulting from a

dampening of competitive market forces is assuredly one

type of injury for which § 4 potentially offers redress, that is

not the only form of injury remediable under § 4.”

McCready, 457 U.S. at 482-83 (citing Reiter v. Sonotone

Corp., 442 U.S. 330 (1979)). A central interest of the

antitrust laws is “protecting the economic freedom of

participants in the relevant market.” Associated General

Contractors, 459 U.S. at 538. As a consumer of local

telephone service, Trinko was a participant in the market in

which trade was restrained and felt the effects of the illegal

conduct. J.A. 40 (Am. Compl. 4 23). See Antitrust Law

Fundamentals § 3.03. As alleged, Verizon’s conduct limited

competition in the local services market by degrading the

services its rivals provided. This harm to AT&T’s customers,

therefore was the “very means by which it is alleged that

[Petitioner] sought to achieve its illegal ends.” McCready,

457 U.S. at 479. Trinko’s injury flowed from that breakdown

of competition, J.A. 48 (Am. Compl. § 59), establishing

antitrust injury. See Antitrust Law Fundamentals § 3.03.

A. Trinko’s Injury was Sufficiently Direct to

Warrant Antitrust Standing

In determining antitrust standing, courts look to a

plaintiff to show “that he is within the area of the economy

which is endangered by a breakdown of competitive

conditions.” Antitrust Law Fundamentals § 3.05f, at 107

(citations omitted). “Whatever the adverse effect of Blue

Shield’s actions on McCready’s employer, who purchased

21

the plan, it is not the employer as purchaser, but its

employees as subscribers, who are out of pocket as a

consequence of the plan’s failure to pay benefits.”

McCready, 457 U.S. at 475. Thus, the Court has held that if

direct competitors as well as “the immediate victims of

coercion by defendants, have been injured by an antitrust

violation, their injuries would be direct and, as we held in

McCready, they would have a right to maintain their own

treble damages actions against the defendants.” Associated

General Contractors, 459 U.S. at 541.

Respondent is such an immediate victim, and thus is

entitled to recover. As was the case in McCready, 457 U.S.

at 475 n.11, “(t]he nature of [the] injury is easily stated”: As

the direct result of Verizon’s anticompetitive conduct,

Trinko, and similarly situated consumers seeking a

competitive alternative to Verizon, received poor services in

the form of delays and generally inferior treatment. J.A. 40,

47, 48 (Am. Compl. 4] 23, 57, 59). That Trinko’s service

was thus affected was an inevitable result of Verizon’s

actions. There was no intervening “chain of causation

between the injury and the alleged restraint,” because

Verizon’s competitors had no alternative to dealing with

Verizon. Associated General Contractors, 459 U.S. at 540.

This is direct injury that supports standing. In McCready, the

plaintiff's employer could have elected to choose another

plan, 457 U.S. at 480 n.17. AT&T had no such choice of

underlying providers. The facilities AT&T purchased from

Verizon and used to provide service to Trinko were solely

available from Verizon by virtue of its monopoly over those

lines. J.A. 40 (Am. Compl. 4 24-25).

Verizon contends that Trinko lacks standing because the

injury suffered was indirect. Brief for Petitioner at 45-46.

Petitioner’s treatment of the directness of the injury is

misplaced, Antitrust Law Fundamentals { 3.05g, at 106

(privity not strictly required), and conveniently overlooks

22

this Court’s analysis of the issue as summarized in

Associated General Contractors:

[I]n the McCready case, the plaintiff was the

direct victim of unlawful coercion. As the Court

noted, “McCready did not yield to Blue Shield’s

coercive pressure, and bore Blue Shield’s sanction

in the form of an increase in the net cost of her

psychologist’s services.” Her status was thus

comparable to that of a contracting or

subcontracting firm that refused to yield to the

defendants’ coercive practices and therefore

suffered whatever sanction that coercion imposed.

Like McCready, and like Connell Construction

Co., such a firm could maintain an action against

the defendants.

459 U.S. at 540 n.44 (emphasis added, internal citations

omitted). Here, as in McCready, Trinko was unavoidably the

victim of Verizon’s unlawful conduct. Trinko’s service was

degraded by Verizon’s anticompetitive tactics. J.A. 48 (Am

Compl. § 59). Like McCready, Trinko did not to yield to the

pressures of Verizon’s illegal behavior. Accordingly, Trinko,

like McCready, has standing to sue.

The injury to plaintiff was “inextricably intertwined”

with the injury to the affected competitor. McCready, 457

U.S. at 484. See also Associated General Contractors, 459

U.S. at 538; Antitrust Law Fundamentals 4 3.05f, at 105. As

in McCready, the injury “flows from that which makes

defendants’ acts unlawful” and does not “seek to label

increased competition as a harm.” McCready, 457 US. at

484: Brunswick, 429 U.S. at 488. Unlike the Union in

Associated General Contractors, plaintiff is a consumer in

the market in which trade was restrained, and thus was

directly disse:ved by Verizon’s efforts to hamper

competition in the market. J.A. 46 (Am. Compl. { 52). See

23

Associated General Contractors, 459 U.S. at 539. In this

case, therefore, allowing Respondent’s claims appropriately

links recovery with procompetitive policy. McCready, 457

U.S. at 482; Brunswick, 429 U.S. at 488.

Respondent’s injuries were also the foreseeable and

proximate result of Petitioner’s illegal conduct. Associated

General Contractors, 459 U.S. at 535-36; McCready, 457

U.S. at 479; Antitrust Law Fundamentals § 3.05a, at 96. As

in McCready, the harm to Trinko was an integral aspect of

the anticompetitive conduct, and thus “was precisely ‘the

type of loss that the clamed violations . . . would be likely to

cause.’” 457 U.S. at 479 (quoting Brunswick, 429 U.S. at

489). In such circumstances, where a customer of a

competitor suffers a direct injury from an anticompetitive

scheme aimed principally at the competitors, the Court has

found standing. McCready, 457 at 483-84; Antitrust Law

Fundamentals § 3.05f, at 106.

B. The Complaint Does Not Seek Damages that Will

Lead to Complex Apportionment or Duplication

Respondent’s claims will not lead to duplicative

recovery or complex apportionment of damages. Associated

General Contractors, 459 U.S. at 543-44. Respondent seeks

“recovery for injuries distinct from those that other parties

may have suffered.” Associated General Contractors, 459

U.S. at 550 (Marshall, J. dissenting). Just as the antitrust

injury suffered by the plaintiff in McCready was distinct

from the antitrust injury suffered by the competitors in the

psychotherapy market at issue in that case, 457 U.S. at 475,

so here, the recovery sought by AT&T or other competitors

would focus on lost competitive opportunities and not on the

consumers’ service degradation.

This case does not implicate the concerns of passing on,

the basis for denying standing in J/linois Brick Co. v. Illinois,

24

431 U.S. 720 (1977). The antitrust injuries suffered by

Respondent are distinct from any injury to AT&T, but

directly within the realm of injury Congress sought to

address with the antitrust laws. McCready, 457 U.S. at 484.

See also Associated General Contractors, 459 U.S. at 540;

Brunswick, 429 U.S. at 487-88; Antitrust Law Fundamentals

q 3.05, at 103. Verizon’s anticompetitive conduct harmed its

rivals, including AT&T, made them less_ effective

competitors and impeded entry by other competitors. J.A.

46-47 (Am. Compl. §§ 52-58). AT&T’s claim would not

encompass damages resulting from receiving poor local

telephone service. °

C. Trinko is a Suitable Plaintiff Because the Harm

Suffered Is Precisely What the Antitrust Laws

Seek to Prevent

Plaintiffs in Trinko’s position have strong incentives to

identify and prevent anticompetitive conduct. The face a

Hobson’s choice of selecting between competitor. service

degraded as a result of the anticompetitive tactics of the

defendant, J.A. 46 (Am Compl. § 52), or purchasing from the

defendant directly, with the attendant disadvantages of

dezling with a monopolist. Redress for this poor service is

only available to the victims if they identify and challenge

the underlying source of anticompetitive conduct.

Here, as in McCready, where “the injury was borne directly

by the customers of the competitors,” 457 U.S. at 483, “the

remedy cannot reasonably be restricted to those competitors

whom the conspirators hoped to eliminate from the market.”

Id. at 479.

This is not a case where “the existence of an identifiable

class of persons whose self-interest would normally motivate

° In any claim by AT&T, antitrust injury would focus on its diminished

ability to compete as a consequence of the anticompetitive conduct.

25

them to vindicate the public interest in antitrust enforcement

diminishes the justification for allowing a more remote party

to perform the office of a private attorney general.”

Associated General Contractors, 459 U.S. at 542.

Disadvantaged competitors have incentives not to pursue

antitrust challenges to incumbent monopolists, upon whom

they depend and with whom they must deal on a constant

basis, because there are no alternative providers. J.A. 39, 40,

45 (Am. Compl. ¥§ 19, 24, 47.) “When the immediate victim

has some reason to avoid suing” there may be “no first best

with the incentive or ability to sue.” Antitrust Law

Fundamentals § 3.05, at 101 (citations omitted). Because its

service was dependent on Verizon’s treatment of AT&T,

Trinko has an identity of interest with Verizon’s competitor,

underscoring Trinko’s suitability to press these claims.

Reaffirming the standing of consumers in Petitioner’s

position would vindicate the interest in private enforcement

of the antitrust laws. As the Court noted in McCready,

“consistent with congressional purpose, we have refused to

engraft artificial limitations on the § 4 remedy.” 457 U.S. at

472. Denying standing to Trinko would deny compensation

for immediate, distinct injuries resulting from Verizon’s

anticompetitive conduct. “In the face of [congressional

antitrust] policy this Court should not add requirements to

burden the private litigant beyond what is specifically set

forth by Congress.” Jd., 457 U.S. at 472 n.9 (citations

omitted). Consequently, this Court has limited standing only

in particular cases, where recovery would have been

difficult, such as parens patriae recovery for damages to the

general economy, or where there was an unacceptable risk of

duplicative recovery. /d., 457 U.S. at 473-75 (discussing

Hawaii v. Standard Oil Co., 405 U.S. 251 (1972) and Illinois

Brick, supra). Similar considerations are simply not

implicated in this case. Plaintiff's claims are not duplicative

of those of Verizon’s competitors, because each consumer

26

plaintiff’ s injuries relate specifically and exclusively to the poor

service received as aresult of Verizon’s unlawful conduct. The

Court should therefore conclude that Trinko has standing, for

“{o]nly by requiring violators to disgorge the ‘fruits of their

illegality’ can the deterrent objectives of the antitrust laws be

fully served.” McCready, 457 U.S. at 473 n.10 (citations

omitted).

CONCLUSION

The judgment of the court of appeals should be affirmed.

Respectfully submitted,

CHRISTOPHER L. MURRAY MICHAEL D. MCNEELY

TELECOMMUNICATIONS Counsel of Record

AND INTERNET COUNSEL CHRISTY C. KUNIN

CONSUMERS UNION PATRICK J. O° CONNOR

1666 Connecticut Ave., NW GRAY CARY WARE &

Suite 310 FREIDENRICH LLP

Washington, DC 20009 1625 Massachusetts Ave., NW

(202) 238-9253 Suite 300

Washington, DC 20036

CONSUMER FEDERATION (202) 238-7788

OF AMERICA

1424 16th St., NW, Counsel for Amici Curiae

Suite 604

Washington, DC 20036

(202) 387-6121

July 25, 2003