United States of America v. SBC Communications Inc. et al

Memorandum in opposition to re MOTION to Amend/Correct Sprint Nextel's Response to United States' Reply to Allegations Made

D.D.C.January 9, 2007

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ____________________________________ ) UNITED STATES OF AMERICA, ) ) Plaintiff, ) ) v. ) Civil Action No. 1:05CV02102 (EGS) ) SBC Communications, Inc. and ) AT&T Corp., ) ) Defendants. ) ____________________________________) ) UNITED STATES OF AMERICA, ) ) Plaintiffs, ) ) v. ) Civil Action No. 1:05CV02103 (EGS) ) Verizon Communications, Inc. and ) MCI, Inc., ) ) Defendants. ) ____________________________________) AT&T INC.’S OPPOSITION TO SPRINT’S MOTION TO SUPPLEMENT AT&T Inc. opposes Sprint’s attempt to “supplement” the record with plainly irrelevant material relating to the AT&T/BellSouth transaction. When Sprint initially sought leave to participate in these proceedings, it pledged that “[b]ecause Sprint seeks to participate only as specifically authorized by the Court and for purposes of appeal, Sprint’s participation will not delay the proceedings or prejudice the parties.” Motion of Sprint Nextel Corporation for Amicus Curiae Status and to Intervene and Memorandum of Points and Authorities, at 3 (July 20, 2006). Sprint’s unauthorized Motion to Supplement contradicts this commitment and seeks to distract the Court with information that is well beyond the scope of this proceeding. Case 1:05-cv-02102-EGS Document 226 Filed 01/09/2007 Page 1 of 6 2 It is undisputed that the AT&T/BellSouth transaction is not before this Court in any manner. Amici acknowledged explicitly that “this Court is without authority to review the BellSouth acquisition.” Actel Motion for Leave to Supplement the Record, at 5 (Oct. 12, 2006). In fact, this Court has confirmed its agreement with the parties and amici that the BellSouth transaction is outside the scope of its current public interest inquiry. Transcript of November 30, 2006 at 7:19-9:1 (“I’m not getting at that issue, I’m not scrutinizing the government’s actions or inactions in that second case . . . That’s not before me.”). Sprint’s Motion, nevertheless, improperly invites the Court to consider the BellSouth transaction in reaching a decision. It suggests that the FCC’s interest in taking account of the Court’s ruling should somehow influence the outcome of this proceeding. But what a different federal agency may do with regard to a different transaction under a statutory standard different from the antitrust laws (much less the Tunney Act) has no conceivable bearing here.1 Put simply, this proceeding is limited to the SBC/AT&T and Verizon/MCI transactions. Nothing in or about the BellSouth transaction changes the sole issue before this Court or the Court’s analysis of that issue. The only issue before the Court is whether the remedy proposed by the Department of Justice addresses the competitive harm alleged in the Complaints such that the Court can conclude, consistent with the statutory factors, that the proposed judgments are in the public interest. The record demonstrates that divestitures are required in 100 percent of the 1 Sprint goes so far as to suggest this Court should consider the FCC’s alleged “lack of attention” to conditions it imposed on the BellSouth transaction, pointing to typographical errors in the attachment to the FCC press release. Motion at 2, n.3. Case 1:05-cv-02102-EGS Document 226 Filed 01/09/2007 Page 2 of 6 3 buildings where harm is alleged, so there can be no question this complete relief satisfies the public interest standard.2 Conclusion This proceeding has now been pending for over one year. Amici have caused delay twice before by seeking to introduce issues related to the AT&T/BellSouth merger, despite their own admission that that transaction stands completely outside this Court’s scope of review. Given the stipulated irrelevance of that separate transaction to this proceeding and Sprint’s prior pledge to avoid delay, Sprint’s Motion to Supplement should be denied. This Court should promptly proceed to a decision that the decrees are in the public interest. Respectfully submitted, /s/ Wm. Randolph Smith Wm. Randolph Smith (D.C. Bar No. 356402) Wilma A. Lewis (D.C. Bar No. 358637) 2 At the November 30 hearing, for the first time during this proceeding, amici purported to dispute the fact that the remedy offers 100 percent relief to the harm alleged in the Complaint: “Ms. Lewis kept saying to you it’s 100 percent remedy. It’s less than 50 percent.” Tr. at 80:2-4. It is important for the record to be clear that the amici’s assertion is false, as it includes buildings that the Government did not include in the violation alleged in the Complaints. As the DOJ clearly stated in its March 21, 2006 Response to Public Comments (at 20), “Nowhere do the Complaints state that there would be competitive harm in all 2-to-1 buildings, nor would the facts support such an allegation. One reason is that for some of the 2-to-1 buildings entry would be likely in response to a post-merger price increase.” The Government’s economic expert similarly testified in his sworn declaration that “the buildings identified by the Department as likely to experience harm from the mergers . . . include only those buildings where entry is unlikely.” Majure Decl. ¶ 14 (Aug. 7, 2006). Thus, the proper focus is limited to those buildings where the government alleged competitive harm, and there is no doubt the divestitures remedy that harm 100 percent. Case 1:05-cv-02102-EGS Document 226 Filed 01/09/2007 Page 3 of 6 4 CROWELL & MORING LLP 1001 Pennsylvania Avenue, N.W. Washington, DC 20004 Telephone: (202) 624-2500 Facsimile: (202) 628-5116 Counsel for Defendant AT&T Inc. Dated: January 9, 2007 Case 1:05-cv-02102-EGS Document 226 Filed 01/09/2007 Page 4 of 6 5 CERTIFICATE OF SERVICE I hereby certify that on this 9th day of January, 2007, true and correct copies of AT&T Inc.’s Opposition to Sprint’s Motion to Supplement were sent by first class mail, postage prepaid, to the following: Attorneys for Plaintiff, United States Laury E. Bobbish Lawrence M. Frankel Antitrust Division U.S. Department of Justice City Center Building 1401 H Street, N.W. Suite 8000 Washington, DC 20530 Matthew C. Hammond Antitrust Division U.S. Department of Justice City Center Building 1401 H Street, N.W. Suite 8000 Washington, DC 20530 Attorney for Verizon Communications John Thorne Verizon Communications Inc. 1515 North Courthouse Road Arlington, Virginia 22201 Attorneys for ACTel Gary Reback Carr & Ferrell LLP 2200 Geng Road Palo Alto, CA 94303 Thomas W. Cohen Special Counsel Kelley, Drye & Warren LLP 3050 K Street, N.W., Suite 400 Washington, DC 20007 Attorney for New Jersey Division of the Ratepayer Advocate Christopher J. White Deputy Ratepayer Advocate Division of the Ratepayer Advocate 31 Clinton Street, 11th Floor P.O. Box 46005 Newark, NJ 07101 Attorney for American Antitrust Institute Jonathan L. Rubin, Esquire Jonathan L. Rubin, P.A. 1717 K Street, N.W. Suite 600 Washington, DC 20036 Attorney for MCI Paul M. Eskildsen MCI, Inc. 22001 Loudoun County Parkway Ashburn, Virginia 20147 Attorney for COMPTEL Kevin R. Sullivan King & Spalding LLP 1700 Pennsylvania Avenue, N.W. Washington, DC 20006 Attorneys for NASUCA John R. Perkins Iowa Consumer Advocate President of NASUCA Office of Consumer Advocate 310 Maple Street Des Moines, IA 50319 NASUCA 8380 Colesville Road, Suite 101 Silver Spring, MD 20910 Michael Lovern 3713 Park Drive Edgewater, MD 21037 Kathleen F. O'Reilly 414 A Street, SE Washington, DC 20003 Case 1:05-cv-02102-EGS Document 226 Filed 01/09/2007 Page 5 of 6 6 Attorneys for Time Warner Telecom, Inc. Theodore C. Whitehouse Benjamin W. Jackson Willkie Farr & Gallagher LLP 1875 K Street, N.W. Washington, DC 20006 Attorney for Attorney General for the State of New York Jay L. Himes Chief Antitrust Bureau Office of the Attorney Genera 120 Broadway New York, NY 10271 Attorney for Sprint Nextel Corporation Timothy J. Simeone Harris Wiltshire & Grannis LLP 1200 – 18th Street, N.W., 12th Floor Washington, DC 20036 Attorney General for the State of New York Eliot Spitzer, Attorney General State of New York Office of the Attorney General 120 Broadway, Suite 2601 New York, NY 10271 /s/ Valerie Hinko Case 1:05-cv-02102-EGS Document 226 Filed 01/09/2007 Page 6 of 6