THE DOMINOS OF GOLDWASSER: ONLY CONGRESS CAN

STOP THE TOPPLING EFFECT BEFORE THE GAME

IS OVER

Megan Delany

I. INTRODUCTION

February 8, 1996 was a much-heralded day inthe telecommunications industry. After manyyears of behind-the-scenes negotiations, openfloor debates and legislative sessions, the Tele-communications Act of 1996 ("Telecom Act") wasat last signed into law.' The goal of this legislationwas to eliminate the last vestiges of monopoly inthe United States telecommunications sector byintroducing competition into the local phonemarket 2 controlled by the former Bell System,now the Regional Bell Operating Companies("RBOCs"), for over 100 years. 3 The Telecom Act

I Telecommunications Act of 1996, Pub. L. No. 104-104,110 Stat. 56 (codified in scattered sections of 47 U.S.C.).

2 See DAVID WOLcorr, An ALTS Analysis: Local CompetitionPolicy and the New Economy, Assoc. for Local Telecomms. Ser-vices (Feb. 2, 2001) [hereinafter WoLco'rr].

3 On January 8, 1982, AT&T and the Department of Jus-tice announced the settlement agreement to break up AT&T.On August 24, 1982, Judge Harold H. Greene affirmed thisdivestiture agreement, in the Modification of Final Judg-ment. See Modification of Final Judgment, United States v.AT&T, 552 F. Supp. 131 (D.D.C. 1982), affd mem. sub nom.,Maryland v. United States, 460 U.S. 1001 (1983). The divesti-ture agreement ordered the breakup of AT&T ("Ma Bell") tocreate seven Regional Bell Operating Companies ("BabyBells"), including Ameritech, Pacific Telesis, Bell Atlantic,BellSouth, Southwestern Bell, NYNEX and U.S. West. See alsoHarry Newton, Newton's Telecom Dictionary, 577 (RayHorak ed., CMP Books 17th ed. 2001) [hereinafterNEWrON'S]. Today, only four of the original seven Baby Bellsstill remain. Bell Atlantic, GTE and NYNEX merged to formVerizon. Southwestern Bell became SBC and merged withAmeritech and SNET and acquired Pacific Telesis. U.S. Westunderwent a makeover to become the new Qwest, the oneinstance where a long distance company acquired a BOC. Seealso 47 U.S.C. §153(4) (Supp. V 1998) (defining the term"Bell Operating Company").

4 In re Deployment of Wireline Services Offering Ad-vanced Telecommunications Capability, First Report and Or-der and Further Notice of Proposed Rulemaking, 114 FCCRcd. 4761, para. 13 (1999); see also H.R. CONF. REP. No. 104-458, at 1 (1996), reprinted in 1996 U.S.C.C.A.N. 10 (the pur-

established a "pro-competitive, deregulatory na-tional policy framework for telecommunications,opening all telecommunications markets to com-petition so as to make advanced telecommunica-tions and information technologies and servicesavailable to all Americans." 4 To accomplish thesegoals, Congress ordered the Federal Communica-tions Commission (the "Commission" or "FCC") 5

to implement various pro-competitive require-ments on all incumbent local exchange carriers("ILECs"),6 with more stringent pro-competitivemarket-opening obligations upon the RBOCs thatdominated the local market and controlled bottle-

pose of the Telecom Act was "to provide for a pro-competi-tive, de-regulatory national policy framework designed to ac-celerate rapidly private sector deployment of advanced tele-communications and information technologies and servicesto all Americans and by opening all telecommunicationsmarkets to competition . . . ").

5 See generally NEWrON'S, supra note 3. The Federal Com-munications Commission is an independent United Statesgovernment agency, directly responsible to Congress. TheCommission was established by the Communications Act of1934 and is charged with regulating interstate and interna-tional communications by radio, television, wire, satellite andcable. On March 25, 2002, the Commission instituted a reor-ganized structure "as part of its reform efforts to make theFCC more effective, efficient and responsive," http://www.fcc.gov/Bureaus/Miscellaneous/NewsReleases/2002/nrmc02O4.html. The newly, reorganized structure consists ofsix bureaus: the Media Bureau (formerly the Cable ServicesBureau and the Mass Media Bureau); the Wireline Competi-tion Bureau (formerly the Common Carrier Bureau); theConsumer and Governmental Affairs Bureau (formerly theConsumer Information Bureau); International Bureau; theEnforcement Bureau; and the Wireless TelecommunicationsBureau. Id.

6 47 U.S.C. §§251-252 (2001); see also 47 U.S.C. §251(h)defining an "[i]ncumbent local exchange carrier" as a "localexchange carrier" that provided telephone exchange serviceon the date of enactment of the Telecom Act and was consid-ered a member of the National Exchange Carrier Associationunder the Commission's rules or a successor or assign ofsuch a member.

COMMLAW CONSPECTUS

neck facilities .7 Today, more than six years afterthe passage of the Act, the incumbent local ex-change carriers have sufficiently opened their lo-cal networks to competitors and have met theFCC approved standards in only ten states.8 Evenmore telling is that the RBOCs still control 96.8percent of the local residential and small businessmarkets and 82.5 percent of the local mediumand large business markets.9

The slow development of local competition isnot tied to a lack of effort or capital by the newcompetitive local exchange carriers ("CLECs"). l°

Encouraged by the pro-competitive principles ofthe Telecom Act, a large number of well-financedand experienced competitors entered the localtelecommunications market. 1 "From 1996 to2000, the CLECs invested over $56 billion inbroadband networks, 12 more than either thecable companies or the RBOCs."'13 In addition tothese intensive capital investments, CLECs cre-ated 94,000 new jobs as of 2000.14 The efforts of

7 47 U.S.C. §271 (2001). In section 271 of the TelecomAct, Congress constructed a 14-point checklist that an incum-bent local exchange carrier must satisfy in order to demon-strate that it has sufficiently opened its local markets to con-petition. SeeJean F. Walker, Paved with Good Intentions: HowInterLATA Data Relief Undermines the Competitive Provisions of theAct, 53 FED. COMM. L.J. 533, 543 (2001). The 14-point check-list addresses separate pieces of the market-opening provi-sions set out in sections 251 and 252 of the 1996 Act. A BOCcannot fulfill the checklist unless it shows that it has com-plied with all of the various aspects of the market-openingrequirements outlined in sections 251 and 252.

8 See generally http://www.fcc.gov. As of April 1, 2002, theFCC had approved Verizon's §271 applications for Connecti-cut, Massachusetts, New York, Pennsylvania and Rhode Is-land and SBC's §271 applications for Arkansas, Kansas, Mis-souri, Oklahoma and Texas.

9 Seth Schiesel, Sitting Pretty: How Baby Bells May ConquerTheir World, N.Y. TIMES, Apr. 22, 2001, at C3.

10 WOLCOTr, supra note 2.

'11 47 U.S.C. §251(c) (2001). Congress contemplatedthree paths to competition in the local markets. First, com-petitors could compete through "interconnection," or thebuilding out of their own separate networks and then inter-connecting to the incumbents' networks. Second, competi-tors could compete through a combination of their own facil-ities and "unbundling," or leasing of unbundled network ele-ments ("UNEs"), the individual piece parts of the local net-works. Finally, competitors could compete through "resale"of the incumbents' services.

12 See 47 C.F.R. §1.7001 2002. The FCC has defined"broadband" networks as those capable of providing lines orwireless channels with information carrying capability in ex-cess of 200 Kbps upstream and downstream. Id.; see also Hear-ing on Reviewing Competition and Antitrust Issues Relating to theTelecommunications Act Before the Senate Judiciary Subcomm. onAntitrust, Business Rights and Competition, 106th Cong. 13(1999) (statement of former FCC Chairman William E. Ken-

these new entrants have been impeded by theRBOCs. Despite the market-opening mandates ofthe Telecom Act,' 5 RBOCs have consistently en-gaged in anticompetitive practices, including theuse of stall tactics, pricing maneuvers and supply-ing misleading information.' 6 For example, inMarch 2000, the Commission charged Bell Atlan-tic (now Verizon) with using delay tactics in NewYork, including failure to process orders fromcompetitors resulting in service delays to competi-tors' customers.' 7 As a result, the Commissionfined Bell Atlantic $3 million.' 8 "The Bells havealso used a variety of pricing maneuvers to thwartcompetition.' 19 By charging competitors exorbi-tant rates for the necessary bottleneck network el-ements, the Bells make it too expensive for com-petitors to compete.20 Many competitors havebeen driven out of the market through such pric-ing tactics.

The sad reality is that the consumer is the realloser in this battle between the new, smaller en-

nard) (defining broadband as "two-way, communications ofvoice, data and images via any technology and, most impor-tantly, at vastly higher speeds than most consumers have everhad in their homes") [hereinafter Kennard statement].

13 Statement of John Windhausen, Jr., President of As-soc. for Local Telecomms. Services (Sept. 26, 2001), availableat http://www.alts.org/news.html; http://www.alts.org/news.html; see also Hearing Before the House Small BusinessComm. Regulatory Reform and Oversight Subcomm., and Rural En-terprises, Agriculture and Technology Subcomm. on Eliminating theDigital Divide-Who Will Wire Rural America, 107th Cong.(2001) (testimony of Susan McAdams).

14 WOLCOTT, supra note 2 at 4-5.15 These stringent requirements designed to open the lo-

cal telecommunications markets to competition may befound in 47 U.S.C. §251 (c) (1), which imposes a duty to nego-tiate in good faith; 47 U.S.C. §251 (c) (2), which imposes aduty to interconnect at 'just, reasonable, and nondiscrimina-tory rates"; 47 U.S.C. §251(c)(3), which imposes a duty tomake available access to unbundled network elements on a'just, reasonable, and nondiscriminatory" basis.

16 Christina Hange Kukuk, Ameritech is Still in Hot Waterover Poor Service in Ohio, AKRON BEACON J.,Jan. 18, 2001, at 2.

17 Press Release, Federal Communications Commission,FCC Ensures Bell Atlantic Compliance with Terms of LongDistance Approval; Bell Atlantic Agrees to Pay Up to $27 Mil-lion $3 Million Payment Now and Up to $24 Million Later ifBell Atlantic Fails to Meet Specified Performance Standards(Mar. 9, 2000), http://www.fcc.gov/eb/NewsReleases/bel-latl.html.

18 Id.19 WOLcOrr, supra note 2, at app. A, n.3 ("For example,

a typical loop charge to remove equipment from a line isunder $200. By comparison, Bell Atlantic recently filed atariff in New York, which included a charge of up to $750 perloop for removal of loop devices").

20 Id.

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A Goldwasser Fix

trants and the Goliath-like RBOCs. 2' The con-sumer bears the brunt of the RBOCs' monopolis-tic behaviors in being denied the fruits of compe-tition and instead being relegated to poorer ser-vice quality, less innovative service offerings andhigher prices.2 2 In Goldwasser v. Ameritech, onegroup of consumers decided not to take this lyingdown. 23 Four individual residents of Illinois, Indi-ana, Michigan and Wisconsin joined together in aclass action suit against Ameritech, the incumbentlocal exchange carrier in the region.2 4 The fourplaintiffs, who were all subscribers to Ameritech'slocal phone service, alleged that Ameritech had"committed monopolistic acts in furtherance ofan anticompetitive objective of maintaining a mo-nopoly for local phone service in the five-state re-gion. ' 2 5 Citing 20 specific monopolistic behaviors,the plaintiffs claimed that Ameritech had not onlyfailed to grant competitors access to its facilities,but also had affirmatively impeded competitors'ability to enter those markets served by Amer-itech. 26 The plaintiffs asserted that such practicesviolated the Telecommunications Act of 199627

and the antitrust laws under the Sherman Act. 28

The district court dismissed the complaint on thebasis that the plaintiffs lacked standing to sueunder the antitrust laws. 29 The U.S. Court of Ap-peals for the Seventh Circuit overturned the lowercourt's ruling on standing, but ultimately decidedthat the Telecom Act was controlling and the

21 Eric M. Swedenburg, Promoting Competition in theTelecom Markets: Why the FCC Should Adopt a Less Stringent Ap-proach to its Review of Section 271 Applications, 84 CORNELL L.REv. 1419, 1431 (1999) (stating that the "consumer has yet toreap any significant benefit the 1996 Act allegedly sowed");see also Mike Mills and Paul Farhi, This Is a Free Market? TheTelecommunications Act So Far: Higher Prices, Few Benefits, WASH.POST, Jan. 19, 1997, at Hi (noting that the "1996 [Act] washardly a bellwether for the kind of consumer benefits prom-ised by the law's supporters").

22 See, e.g., Competition in Local Phone Service Fails to Con-nect, USA TODAY, Feb. 7, 2001, at 10A, available at http://www.usatoday.com/usatonline/20010207/3048526s.html.("Consumers ... are paying the price. The cost of local ser-vice has been climbing at a time when costs for intenselycompetitive long-distance and wireless services havedropped . . . And quality of service remains mixed at best,with customer complaints up sharply in some regions.").

23 Goldwasser v. Ameritech, 222 F.3d 390 (7th Cir. 2000).24 Id. at 392. At the time the case was brought, Ameritech

provided local telephone service to subscribers and custom-ers in a five-state region: Illinois, Indiana, Michigan, Ohioand Wisconsin.

25 Goldwasser v. Ameritech, No. 97 C 6788, at 6 (N.D.Illinois Feb. 4, 1998).

26 Id. at 13-17 (listing 20 anticompetitive actions, plain-tiffs alleged that Ameritech took affirmative actions to pre-

plaintiffs had failed to state a claim under the an-titrust laws. 30

The Goldwasser decision has had a significantimpact on the Telecom Act. Goldwasser vitiated thespirit of the Telecom Act by ignoring historicaland legal precedent, the Act's express and im-plied antitrust savings clauses and the legislativehistory supporting the inclusion of these clauses.In the process, the decision emboldened many ofthe incumbent local exchange carriers to con-tinue to flout the requirements of the TelecomAct without fear of negative repercussions. 31 TheGoldwasser decision has consequently introducedeven more uncertainty into an already uncertaintelecommunications marketplace. The questionhovering in both legal courtrooms and corporateboardrooms is whether, in the wake of Goldwasser,antitrust enforcement has any role to play in con-straining anticompetitive behavior among com-petitors in a marketplace governed by the regula-tory mandates implemented under the TelecomAct. If this question is left unanswered, the com-petition game that was started by the Telecom Actmay soon be over with the monopolies declaredthe winners. As a result, Congress must take ac-tion to stop the dominos from falling under thetoppling influence of Goldwasser.

Congress recognized that this uphill battle tounlock a 100-year-old state-sanctioned monopolyrequired battles on two fronts-the telecommuni-

vent competition in the local phone service market).27 Telecommunications Act of 1996, Pub. L. No. 104-104,

110 Stat. 56. Plaintiffs brought claim under §§206 and 207 ofthe Communications Act of 1934, as amended by the Tele-communications Act of 1996. See 47 U.S.C. §§206 and 207.Under §206, common carriers are liable "for the full amountof damages sustained in consequence of any such violation ofthe provisions of" the Act. 47 U.S.C. §206. Under §207, in-jured parties may either file a complaint at the Commissionor "bring suit for the recovery of damages." 47 U.S.C. §207;see generally Philip J. Weiser, Federal Common Law, CooperativeFederalism, and the Enforcement of the Telecom Act, 76 N.Y.U. L.Rxv. 1692, 1759-60 (2001) (discussing the role that "a puni-tive damage requirement" plays in helping "to guard againstwillful violations of the Act's market-opening requirements

28 Sherman Antitrust Act of 1890, Pub. L. No. 107-203,26 Stat. 209 (codified at 15 U.S.C. §§1-7) (1997).

29 GoldwasserI, No. 97 C 6788 at 10.30 See generally Goldwasser II, 222 F. 3d at 390.31 Id. at 401402 (only "at some appropriate point down

the road [can] antitrust laws . . . move to the fore"); see alsoSteve Peacock, Tauzin to Comply with FCC Request for ExpandedEnforcement Power, COMM. DALY, May 8, 2001, available at 2001WL 5053136 (opponents of the Goldwasser decision believethat it eliminated an "important tool ... to challenge an-ticompetitive behavior of incumbents... ").

2002]

COMMLAW CONSPECTUS

cations policy front and the antitrust policy front.While the regulatory provisions of the Act de-tailed certain obligations, Congress recognizedthat the federal court system would also have animportant role to play in ensuring the delivery ofthe expected benefits to consumers and thereforeintended to preserve the role of the antitrust laws.This Comment will first provide a historical over-view of the development of the antitrust laws, pri-marily the Sherman Act and the Telecommunica-tions Act of 1996. This historical overview willdemonstrate the harmonious coexistence of thesetwo approaches. Next, this Comment will discussthe Seventh Circuit's decision in Goldwasser v.Ameritech and analyze the court's reasoning in itsholding that the antitrust laws did not apply to an-ticompetitive behavior relating to obligations im-posed by the Telecom Act. This Comment willsubsequently show the divergent directions takenby the lower courts in interpreting Goldwasser, cre-ating an overall environment of legal and regula-tory uncertainty. Then, this Comment will demon-strate Goldwasser's incorrect application of theplain statutory language of the Telecom Act andits failure to heed historical and legal precedent,as well as extensive legislative history. As a result,this Comment will then assert the need for imme-diate congressional action to resolve the uncer-tainty and erosion of competition principles ef-fected by Goldwasser. Finally, this Comment willdiscuss H.R. 1698, the "American BroadbandCompetition Act," and demonstrate its viability asa potential Goldwasser remedy.

32 ROBERT H. BoRK, THE ANTITRUST PARADOX: A POLICY

AT WAR WITH ITSELF 19-20 (Basic Books, Inc. 1993) (1978)[hereinafter BORK].

33 See generally 15 U.S.C. §§1-2.34 15 U.S.C. §1 ("Every contract, combination in the

form of trust or otherwise, or conspiracy, in restraint of tradeor commerce among the several States, or with foreign na-tions, is hereby declared to be illegal... "); see alsoJOHN H.SHENEFIELD & IRWIN M. STELTZER, THE ANTITRUST LAWS: APRIMER 14-15 (2d. ed. 1996) (according to the authors, thepresence of a "contract," "combination," or "conspiracy" isthe "trigger ... In the absence of some cooperative conductor joint action involving at least two separate companies, thisprovision of the Sherman Act does not apply.").

35 15 U.S.C. §2 ("Every person who shall monopolize, orattempt to monopolize, or combine or conspire with anyother person or persons, to monopolize any part of the tradeof commerce among the several States, or with foreign na-tions, shall be deemed guilty of a felony... "); see alsoJohn14. SHENEFIELD & IRWIN M. STELTZER, THE ANTITRUST LAws: A

II. HISTORICAL OVERVIEW

A. The Sherman Act

With one sweep of his pen on July 2, 1890, Pres-ident Benjamin Harrison granted federal courtsthe authority to develop a body of federal anti-trust common law.32 The Sherman Act consists oftwo main provisions. 33 Section 1 focuses on re-strictive agreements, specifically wrongful con-tracts, trusts or conspiracies, which operate "in re-straint of trade or commerce," both nationallyand internationally. 34 Section 2 concentrates onthe attempted or actual abuse of monopolypower, both nationally and internationally. 35 To-gether, these two provisions were the first enunci-ation of federal antitrust policy. 36

The passage of the Sherman Act in 1890 wasmotivated by the fear that unchecked monopo-lists, namely concentrated industrial goliaths suchas Standard Oil and other trusts, would threatencapitalism and the operation of the free market. 37

Senator Sherman, explaining the need for acheck on such monopolists, stated that if wewould "not submit to an emperor, we should notsubmit to an autocrat of trade with power to bothprevent competition and fix the price of any com-modity."38 Congress therefore enacted the Sher-man Act to invest federal courts with the authoritysufficient to ensure that no one "king" reigned"over the production, transportation and sale ofany of the necessities of life."3 9 Today, it is still ac-cepted that the Sherman Act was enacted to pro-

PRIMER 18 (2d. ed. The AEI Press 1996) (1995) Id. at 18 (stat-ing that "the section condemns not sheer size, but abusiveconduct by a monopolist, or unilateral or collective efforts toengage in exclusionary or predatory conduct to obtain mo-nopoly status").

36 BORK, supra note 32, at 19.37 See 21 CONG. REc. 2455, 2460 (daily ed. Mar. 21, 1890)

(statement of Sen. Sherman) (warning against "... the con-centration of capital into vast combinations to control pro-duction and trade to break down competition. These combi-nations already defy or control powerful transportation cor-porations and reach State authorities. They reach out theirBriarean arms to every part of our country. They are im-ported from abroad. Congress alone can deal with them, andif we are unwilling or unable there will soon be a trust forevery production and a master to fix the price for every ne-cessity of life.").

38 Id. at 2457.39 21 CONG. Rc. 2455, 2460 (daily ed. Mar. 21, 1890)

(statement of Sen. Sherman).

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mote consumer welfare and competitive market-places. 40 Yet, while Congress gave the courts theauthority to develop a body of antitrust law, it de-clined to set forth specific tools in the statute todirect the courts' accomplishment of that goal.4'

As a result, the applicability of the Sherman Actwas soon tested when the Supreme Court decidedthe first antitrust suit in 1895.42 In United States v.E. C. Knight Co., the Supreme Court addressed thequestion whether American Sugar Refining Co.'sacquisition of E. C. Knight Co. and three otherindependent sugar refiners created a monopolyin the manufacture of sugar.43 However, theCourt, holding that a monopoly over the manu-facture of a commodity was not sufficient to "mo-nopolize commerce," refused to apply the Sher-man Act to the sugar trust.44 In 1904, though, theSupreme Court altered the course of federal anti-trust policy with its decision in Northern SecuritiesCo. et al. v. United States.45 In Northern Securities, theSupreme Court, applying the Sherman Act toholding companies, held that the acquisition of acontrolling interest in two competing railroadcompanies constituted a "trust" in restraint of in-terstate commerce. 46

The Court's decision in Northern Securities setthe stage for" . . . the most important decisions inantitrust"47 -the Standard Oi148 case and the Amer-ican Tobacco49 case. In Standard Oil, the Court,"preoccupied with abuses, predatory practices, co-ercion, unnatural means of gaining and maintain-ing market power," ordered the breakup of the oilcompany into more than 30 individual compa-nies. 50 However, the Court ruled that not all com-binations violated the Sherman Act. Rather, onlythose unreasonable ones that employed methods

40 DOMINICK T. ARMENTANO, ANTITRUST AND MONOPOLY 6(The Indep. Inst. 1996) (1990).

41 Apex Hosiery Co. v. Leader, 310 U.S. 469, 489 (1940)(holding that due to the vagueness of the language of theSherman Act "courts have been left to give content to thestatute"); see also BOR.K, supra note 32, at 19 (describing theconsequential evolutionary development of the ShermanAct).

42 United States v. E. C. Knight Co., 156 U.S. 1 (1895).43 Id.44 Id. at 17 (specifying that the manufacture of sugar was

not "an attempt . . . to monopolize commerce, eventhough . . .the instrumentality of commerce was necessarilyinvoked").

45 Northern Securities Co. et al. v. United States, 193U.S. 197 (1904).

46 Id. at 338.47 BORK, supra note 32, at 33.

with "the intent to drive others from the field andto exclude them from their right to trade" wereillegal and in violation of the Sherman Act.5 1

Echoing Senator Sherman's original fears of un-checked monopolists, 52 Justice Harlan warned ofthe "slavery that would result from aggregations ofcapital in the hands of a few individuals and cor-porations.."

53

Similarly, in American Tobacco, the Court af-firmed the lower court's decision to dissolveAmerican Tobacco Company on the basis of"wrongful acts" indicating intent to achieve a mo-nopolistic position. 54 Writing for the majority, Jus-tice White justified the application of the Sher-man Act, stating, "the danger which it wasdeemed would arise to individual liberty and thepublic well-being from acts like those which thisrecord exhibits ... led the legislative mind to con-ceive and enact the Anti-trust act.'' 55 The fear ofmisuse of monopoly power that guided the enact-ment of the Sherman Act has likewise influencedthe Supreme Court in its development of a bodyof federal antitrust common law.

In interpreting Section 2 of the Sherman Act,courts have required a showing of two elements ofmonopolization. In United States v. Grinnell Corp.,Justice Douglas declared that in order for a singlefirm to be a monopoly, a two-prong test must bemet: there must be "(1) the possession of monop-oly power in [a] relevant market, and (2) the will-ful acquisition or maintenance of that power asdistinguished from growth or development as aconsequence of a superior product, business acu-men, or historic accident."5 6 The first step in as-sessing an alleged antitrust violation is to measurethe "monopoly power"57 in order to determine

48 Standard Oil Co. v. United States, 221 U.S. 1 (1911).49 United States v. American Tobacco Co., 221 U.S. 106

(1911).50 BORK, supra note 32, at 38.51 Standard Oil Co. 221 U.S. at 76.52 See 21 CONG. REc. 2455, 2457 & 2460 (daily ed. Mar.

21, 1890) (statement of Sen. Sherman).53 Standard Oil Co. 221 U.S at 83 (H-I.aAN, J. concurring

and dissenting).54 United States v. American Tobacco Co., 221 U.S. 106,

183 (1911).55 Id.56 United States v. Grinnell Corp., 384 U.S. 563, 570-71

(1966).57 See United States v. E.l. DuPont De Nemours & Co.,

351 U.S. 377, 391 (1956) (defining "monopoly power" as "thepower to control prices or exclude competition").

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COMMLAW CONSPECTUS

whether such power significantly impedes compe-tition. 58 While courts have traditionally measuredsuch monopoly power in the context of marketshare, they have struggled to define what consti-tutes a monopolistic market share.59 Generally, "a75% market share is likely to permit or require aninference of market power. ' 60 Yet, a holder ofsuch market share is not in per se violation of sec-tion 2.61 Rather, in order to be found guilty ofmonopolizing or attempting to monopolize, "themonopolist must have acquired its monopoly bysome improper conduct or course of conduct, ormust have done something improper to maintainits power. ' 62 While mere possession of monopolypower does not amount to a violation under sec-tion 2, a willful attempt to acquire monopoly sta-tus or maintain monopoly power will violate sec-tion 2.63

Courts therefore have also required a demon-stration of the uses and abuses of monopolypower-the second prong of the test as enunciatedby Justice Douglas in Grinnell.64 For example,courts have determined that even monopolistshave the right to refuse to cooperate with a com-petitor;65 however, "where a refusal to deal is ben-eficial to the monopolist only because it tends to

58 Grinnell, 384 U.S. at 570.59 Id. at 571. The market share was 87% in Grinnell. Id.

However, there is no magic "market share" number. See, e.g.,United States v. Aluminum Co. of Am., 148 F.2d 416, 424(2nd Cir. 1945), where Judge Learned Hand held that "it isdoubtful whether sixty or sixty-four percent would beenough; and certainly thirty-three percent is not"; see alsoUnited States v. United Shoe Mach. Corp., 110 F. Supp. 295,339 (D. Mass. 1953), affd per curium, 347 U.S. 521 (1954),where market share was 75-85%. But see Treaty Establishingthe European Economic Community, Mar. 25, 1957, art. 86,298 U.N.T.S. 11, 48 (effective Jan. 1, 1958) (now renum-bered Art. 82 by the Treaty of Amsterdam) (prohibiting "anyabuse by one or more undertakings of a dominant positionwithin the common market or in a substantial part of it...(emphasis added).

60 Patrick Lynch, Monopolization, Attempted Monopolizationand Joint Ventures, PRAc. L. INST. 287-88 (2001) [hereinafterLynch].

61 See BORK COMMUNICATION GROUP LLC, WHITE PAPER,

THE CASE AGAINST MICROSOVr (authored by Robert H.Bork) 419, 422 ("Size, even if it confers monopoly power, isnot illegal if it is achieved by superior products, service, busi-ness acumen, or mere luck") [hereinafter Bork, The CaseAgainst Microsoft]; see also Grinnell, 384 U.S. at 571 (contrast-ing the deliberate acquisition or maintenance of monopolypower with "monopoly achieved as a result of historical acci-dent, business acumen, or the like").

62 Lynch, supra note 60, at 295-96; see also Aspen SkiingCo. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 605(1985); see also United States v. Aluminum Co. of Am., 148F.2d 416, 420 (2nd Cir. 1945).

destroy competition, it will be unlawful under sec-tion 2."66 This theme was recently reiterated inUnited States v. Microsoft Corp. where the courtfound that Microsoft's use of exclusionary prac-tices and predatory tactics to maintain its monop-oly violated both Sections 1 and 2 of the ShermanAct.6 7 The court explained that Microsoft's exclu-sive dealings are not unlawful solely because oftheir "anticompetitive effect of preservingMicrosoft's monopoly." 6s Rather, the court foundMicrosoft's exclusive arrangements violated sec-tion 2 because they were not supported by anypro-competitive justification or intended to fur-ther any pro-competitive business ends. 69

Finally, if a refusal to deal involves an "essentialfacility," courts have held monopolists to a stricterstandard. 70 A facility is considered essential "whenit is both critical to the plaintiff's competitive via-bility and the plaintiff is essential for competitionin the marketplace. '71 The essential facilities doc-trine first emerged in United States v. Terminal Rail-road Assoc., 72 which "involved three differentmeans of crossing the Mississippi when the gov-ernment finally sued the combination" in 1905under sections 1 and 2 of the Sherman Act. 73 Inorder to establish liability under the essential facil-

63 Id.64 Grinnell, 384 U.S. at 570.65 See Aspen Skiing Co. v. Aspen Highlands Skiing Corp.,

472 U.S. 585 (1985).66 Lynch, supra note 60, at 297.67 U.S. v. Microsoft, 253 F.3d 34 (D.C. Cir. 2001). See also

Bork, The Case Against Microsoft, supra note 61, at 422("Microsoft has, and exerts, the power to exclude rivals bypredatory tactics that do not reflect superior efficiency, tac-tics whose sole purpose is the destruction of rivals.").

68 Microsoft 253 F.3d at 87 ("A monopolist, like a competi-

tive firm, may have a perfectly legitimate reason for wantingan exclusive arrangement with its distributors.").

69 Id. at 87-88.70 See MCI Communications Corp. v. AT&T., 708 F.2d

1081 (7th Cir. 1983) (relying on United States v. Terminal R.Ass'n., 224 U.S. 585, 605 (1985); see also Hearing on Monopoli-zation and Competition in the Telecommunications Industry Beforethe Senate Comm. on the Judiciary, 97th Cong. 283 (1981) (state-ment of William G. McGowan, Chairman of the Bd., MCICommunications Corp.) ("in the classic terminology of anti-trust law, A.T. & T. controls the essential facility, or the bot-tleneck . . . which is the local exchange service to which wemust interconnect in order to provide long-distance tele-phone service to our customers") [hereinafter Hearing on Mo-nopolization].

71 Phillip Areeda, Essential Facilities: An Epithet in Need of

Limiting Principles, 58 ANTITRUST L.J. 841, 852 (1989).72 224 U.S. 383 (1912).

73 Abbott B. Lipsky, Jr. andJ. Gregory Sidak, Essential Fa-cilities, 51 STAN. L. R. 1187, 1189 (May 1999).

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ities doctrine, courts have required the satisfac-tion of four elements of an essential facility.7 4

First, the defendant must have control of a facilityessential to competition. 75 Second, duplication ofthat facility must be impossible or impractical.7 6

Third, it must be feasible to provide access to thefacility.77 And, finally, the defendant must havedenied access to the facility in order to excludecompetition and not for a legitimate business pur-pose.

78

The body of federal antitrust law that has devel-oped since the enactment of the Sherman Act isthus rooted in the American principles of compe-tition and innovation. Enforcement of the anti-trust laws is necessary for such competition andinnovation because enforcement efforts "providean assurance to investors and entrepre-neurs.., that they will succeed or fail on the basisof the creativity and quality of their products andservices, free from the pernicious effects of an-ticompetitive practices."7 9 The American courts,who were first tasked with the job of developingour body of federal antitrust law and who con-tinue to apply the antitrust laws today, must there-fore be guided by the dual policy considerationsof promoting competition8 ° on one hand and en-couraging innovation on the other."'

B. The Telecom Act

In enacting the Telecommunications Act, 82

74 MCI Communications Corp. v. AT&T., 708 F.2d 1081,1132-33 (7th Cir. 1983).

75 Id.76 Id.77 Id.78 Id.; see also Hearing on Monopolization, supra note 70, at

299.79 Hearing on Reviewing Competition and Antitrust Issues Re-

lating to the Telecommunications Act Before the Senate JudiciarySubcomm. on Antitrust, Business Rights and Competition, 106thCong. 31 (1999) (statement of former FCC Chairman ReedE. Hundt).

80 See generally David Turetsky, Antitrust in a More Con-

servative Congress, 41 ANTITRUST BULL., 541, 542 (1996) [here-inafter Turetsky].

81 See generally 1 WILLIAM MEADE FLETCHER ET. AL.,

FLETCHER CYCLOPEDIA OF THE LAW OF PRIVATE CORPORATIONS

§4983.10 (perm. ed. rev. vol. 1999); see also Turetsky, supranote 80, at 542.

82 Telecommunications Act of 1996, Pub. L. No. 104-104,

110 Stat. 56.83 See id. at 56 (preamble).84 Id.; see also, H.R. CONF. REP. No. 104-458, at 1 (1996)

(stating that Congress intended to "provide for a pro-compet-itive, de-regulatory national policy framework designed to ac-

Congress was motivated by the same goals that in-spired the enactment of the Sherman Act-con-sumer welfare and competitive marketplaces.8 3 In-deed, the purpose of the Act is "to promote com-petition and reduce regulation in order to securelower prices and higher quality services for Ameri-can telecommunications consumers and en-courage the rapid deployment of new telecommu-nications technologies." 84 As a result, Congressmade competition the driving force behind theTelecom Act.8 5 To serve that end, "the regulatoryregime in the 1996 Act contains stringent require-ments designed to open competition in local tele-phone service." '86 These requirements are enunci-ated in section 251 of the Act.87 Section 251 (a)imposes a broad mandate on all telecommunica-tions carriers "to interconnect directly or indi-rectly with the facilities and equipment of othertelecommunications carriers."88 To encouragecompetition specifically in the local exchangemarket, one of the last "market segments thathave natural monopoly characteristics, '"8 9 section251 (b) then imposes further duties on all local ex-change companies. 90 Finally, the ILECs bear addi-tional burdens under section 251 (c) in order toprevent them from manipulating their control ofbottleneck facilities to strangle their competitorsand frustrate the very intent of the Telecom Act.91

These additional duties include: "the duty to ne-gotiate in good faith;" 92 the duty "to intercon-nect;" 98" the duty to provide nondiscriminatory ac-

celerate rapidly private sector deployment of advanced tele-communications and information technologies and servicesto all Americans by opening all telecommunications marketsto competition . . . ").

85 See Confirmation Hearing Before the Senate Commerce, Sci-ence & Transportation Comm., 105th Cong. (1997) (statementof former FCC Chairman William E. Kennard), available at1997 FCC LEXIS 5431, at *5 (stating that "competition is thecornerstone of the 1996 Act, and the FCC must continue topromote competition in every sector of the communicationsmarketplace").

86 PRACTICING LAW INSTITUTE, TELECOMMUNICATIONS

CONVERGENCE OVERVIEW 17 (2001).87 47 U.S.C. §251 (2001).88 See id. §251(a)(1).89 Joseph D'Kearney & Thomas W. Merrill, The Great

Transformation of Regulated Industries Law, 98 COLUM. L. REv.1323, 1364 (1998).

90 47 U.S.C. §251 (b). These duties include the duty ofresale, the duty of number portability, the duty of dialing par-ity, the duty of access to rights-of-way and the duty to recipro-cal compensation. Id.

91 See id. §251(c).92 See id. §251 (c) (1).93 Id. §251 (c) (2).

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cess to network elements; 94 the duty to providetelecommunications services for resale at whole-sale rates; 95 and the duty to allow for physical col-location of equipment.96

In order to encourage compliance on the partof the incumbents with the requirements of sec-tion 251, Congress fashioned a trade under sec-tion 271 by predicating BOC entry into the longdistance market on the satisfaction of the mar-ket-opening provisions of section 251. 9 7 FormerFCC Chairman William Kennard described thisbarter as "a simple yet clever proposition: in ex-change for opening their local facilities to com-petitors, the 1996 Act provides the BOCs with thesubstantial reward of the long distance 'carrot."' 9

Under section 271, a BOC can petition the Com-mission on a state-by-state basis to provide in-re-gion interLATA services.99 In order to obtain sec-tion 271 approval, though, the petitioning BOCmust demonstrate to the individual state publicutility commissions that they have complied withthe 14-point competitive checklist, which directlyincorporates the competitive provisions of section251.100 The Commission, in consultation with theAttorney General, must then make a determina-tion on the application within 90 days.""' Thus,while the Telecommunications Act may be a dif-ferent means than the Sherman Act, they are both

94 Id. §251(c)(3); see also id. §251(d)(2) (Congress man-dated that, in deciding which network elements should bemade available on an unbundled basis, the Commission mustdetermine whether access to particular network element is"necessary" and whether requesting carrier would be im-paired in providing service without access to particular ele-ment).

95 Id. §251 (c) (4).96 Id. §251 (c) (6).97 See 47 U.S.C. §271 (2001).98 Hearing Before the House Comm. on the Judiciary on H.R.

1686 - The "Internet Freedom Act" and H.R. 1685 - The "InternetGrowth and Development Act," 106th Cong. (2000) (statementof former FCC Chairman William E. Kennard). See also Hear-ing on Reviewing Competition and Antitrust Issues Relating to theTelecommunications Act Before the Senate Judiciary Subcomm. onAntitrust, Business Rights and Competition, 106th Cong. 22(1999) (statement of former Assistant Attorney General ofthe DOJ Antitrust Division Joel I. Klein) (stating "how abso-lutely critical section 271 is to achieving the Act's market-opening goals... One of the most ambitious aspects of theAct is that it requires and expects the incumbent local ex-change carriers to assist competitors that wish ultimately totake away its customers. Imagine how much more difficultthis process would be without the incentive of long distanceentry for the Bell companies.").

99 See 47 U.S.C. §271 (d) (1).100 See id. §271 (c) (2) (B).101 See id. §271(d)(3); see also §271 (d)(2)(A); see also

designed to accomplish the same end of competi-tion. 10 2 Recognizing this, Congress intended thetwo statutory schemes to coexist harmoniously. Asa result, even though Congress stipulated specificbehavioral guidelines intended to promote com-petition in the local exchange marketplace, Con-gress also affirmatively included an express an an-titrust savings clause. 10 3 Section 601(b) (1) specifi-cally provides that "nothing in this Act ... shall beconstrued to modify, impair, or supersede the ap-plicability of any of the antitrust laws." 104 Simi-

larly, Congress incorporated an implied antitrustsavings clause providing that "[t] his Act ... shallnot be construed to modify, impair, or supersedeFederal, State or local law unless expressly so pro-vided."'11 5 This antitrust savings clause is standardlanguage used in other federal regulations to ex-press the continued applicability of antitrust lawseven when Congress seeks to impose more spe-cific behavioral obligations to govern certainforms of competition. For instance, the languageof section 601(b) (1) is identical to the languageof the antitrust savings clause used in the EnergyPolicy Act of 1992, which states that certain sec-tions relating to wholesale transmission services"shall not be construed to modify, impair, or su-persede the antitrust laws."'11 6 The standard lan-guage used in the express'0 7 and implied 108 anti-

Turetsky, supra note 80, at 554-55 ("the legislation also as-signs the Antitrust Division a strong role in evaluating BellOperating Company applications for entry into the long dis-tance market, requiring that the FCC accord 'substantialweight' to the Division's evaluations.").

102 See, e.g., Turetsky, supra note 80 ("[A] ntitrust is a criti-cal ally of competition - it is not a tool to pick winners andlosers, but rather a tool to ensure that competitive marketsdo so."); see also, e.g., Telecommunications Act of 1996, Pub.L. No. 104-104, 110 Stat. 56 (an act "[t]o promote competi-tion ...").

103 Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 143, §601(b)(1). See also 142 CONG. REc.

H1145-06, HI171 (daily ed. Feb. 1, 1996) (statement of Rep.Conyers) (" [t]he antitrust savings clause ... ensures any andall ... anticompetitive activities are fully subject to antitrustlaws.").

104 Id.105 Telecommunications Act of 1996, Pub. L. No. 104-

104, 110 Stat. 143, §601 (c) (1).106 Energy Policy Act of 1992, Pub. L. No. 102486, 106

Stat. 2916, §722(2) (2001); see also Public Utility RegulatoryPolicies Act of 1978, Pub. L. No. 95-617, 92 Stat. 3120, §4(2001) ("Nothing in this Act or in any amendment made bythis Act affects . . . the applicability of the antitrust laws toany electric utility or gas utility... ").

17 See Telecommunications Act of 1996, Publ L. No. 104-104, 110 Stat. 143, §601(b)(1).

108 See Energy Policy Act §722(2).

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trust savings clauses of the Telecom Act is basedon the statutory precedents in the energy, electricutility and natural gas industries. 0 9 Congress'sclear intent in enacting the TelecommunicationsAct with an express antitrust savings clause was toensure that a proper remedy was available to con-strain certain anticompetitive behavior and thatsuch behavior was not shielded from over 100years of antitrust case law. The statutory construc-tion of the Telecom Act and the legislative historysurrounding its enactment demonstrate Con-gress's intent to preserve the role of the Depart-ment of Justice and the antitrust laws in openinglocal markets to competition.

C. Goldwasser

Goldwasser v. Ameritech was a federal class action

109 See generally James R. Atwood, Antitrust, Joint Ventures,

and Electric Utility Restructuring: RTGs and Poolcos, 64 ANTI-

TRUST L.J. 323, 325-28 (1996); see also TelecommunicationsAct §601 (c) (1).

110 Goldwasser II, 222 F.3d at 392 ("Plaintiffs-appellants

Richard Goldwasser, Michael Cohn, Eric Carter, and RichardLozon are citizens of Illinois, Wisconsin, Indiana, and Michi-gan, respectively. Those states ... are the ... states in whichdefendant Ameritech provides local telephone service. TheGoldwasser plaintiffs . . . are consumers of local telephoneservices in Ameritech's area.").

111 Goldwasser I, No. 97 C 6788, at 2.112 Goldwasser Hl, 222 F.3d, at 394-95.

The complaint specifies 20 specific exclusionary or mo-nopolistic practices . . . (1) Ameritech is not providingthe same quality of service to its competitors as it pro-vides to itself, in violation of §251. (2) Again in violationof §251, Ameritech has not given its competitors nondis-criminatory access to its operational support systems,nor has it given them access to unbundled elements ofits systems on terms equivalent to those Ameritech en-joys. (3) Ameritech has failed to provide "dark fiber" asan unbundled network element, in violation of the 1996Act. (4) Ameritech has failed to provide its competitorsaccess to poles, ducts, conduits, and rights-of-way on anondiscriminatory basis, in violation of §§251 and 271.(5) Ameritech has failed fully to unbundle its networkelements, including local loops, local transport, and lo-cal switching, in violation of §251 (c) (3). (6) Ameritech'scompetitors have experienced undue delays (presuma-bly caused by Ameritech) in acquiring unbundled ele-ments, and those delays have precluded them from of-fering services as attractive as Ameritech's. (7) The com-petitors have also experienced delays and discriminationas they have sought to gain access to unbundled loops,in violation of §251(c)(3). (8) Ameritech has failed toprovide unbundled access to local transport interofficetransmission facilities on a discriminatory basis, in viola-tion of §251 (c) (3). (9) Ameritech has failed to providelocal switching to competitors, in violation of§271 (c) (2) (B) (vi). (10) Ameritech discriminates against

suit brought against Ameritech on behalf of fourlocal telephone service consumers in each ofAmeritech's service regions." 0 The plaintiffsblamed the lack of competition in the local tele-phone market on the exclusionary practices ofAmeritech, which controlled more than "90 per-cent of the markets for local telephone service inits geographic areas." 11 Citing 20 specific monop-olistic behaviors that violated Section 2 of theSherman Act' and the Telecom Act,12 the plain-tiffs claimed that Ameritech had not only affirma-tively impeded competitors' ability to enter thosemarkets served by Ameritech but also had failedto grant competitors access to its "so-called essen-tial facilities."' ' 3 The plaintiffs claimed that suchanticompetitive acts violated Section 2 of theSherman Act by denying consumers a choiceamong competitive carriers and, as a result, raised

competitors by requiring competitive LECs and competi-tors to pay originating and terminating access charges,when it cannot collect interstate access charges. (11)Ameritech has failed to offer or provide customizedrouting, which is required to be provided as part of un-bundled local switching. (12) Ameritech has not pro-vided dialing parity to competitors for services such asoperator assistance ("0"), directory assistance ("411"),and repairs ("611"), in violation §271(c) (2) (b) (xii).(13) Ameritech has failed to provide access to its own911 and emergency services on a nondiscriminatory ba-sis, in violation of §271 (c) (2) (B) (vii) (1). (14) Ameritechhas continued to bill customers of competitors who haveconverted from Ameritech's services, and hence somecustomers are being double- billed, thereby harming thecompetitors' good will. (15) Ameritech has failed to pro-vide interconnection between its network and those ofcompetitors that is equal to the interconnections it givesitself, in violation of §§251 (c) (2) and 271 (c) (2) (B) (i).(16) Ameritech has not complied with §272(b) (3) of the1996 Act, which requires a BOC and its interLATA affili-ates to have separate officers, directors, and employees.(17) Ameritech has failed publicly to disclose all transac-tions with §272 affiliates, in violation of §272(b) (5). (18)Ameritech has refused to sell to its competitors, on just,reasonable, and nondiscriminatory terms, access to com-ponents of its network on an unbundled or individualbasis. (19) Ameritech has refused to sell to its competi-tors local telephone services at wholesale prices that arejust, reasonable, and nondiscriminatory, which preventsthe competitors in turn from offering attractive resaleprices to consumers. (20) Ameritech has refused to al-low its competitors to connect with its local telephonenetwork on just, reasonable, and nondiscriminatoryterms.113 Goldwasser I, 222 F.3d, at 394 (including "its tele-

phone lines, equipment, transmission, and interconnectionstations in [Ameritech's] markets." The Supreme Court hasheld that the incumbents' competitors are not able to dupli-cate those facilities.). See, e.g., AT&T v. Iowa Board of Utili-ties, 525 U.S. 366 (1999).

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prices for local telephone service.' 14 In addition,the plaintiffs claimed that these anticompetitiveacts violated mandatory access provisions of theTelecommunications Act. 1 1 5 According to theplaintiffs, these violations "have restrained and sti-fled any meaningful competition for local tele-phone services in the relevant markets . . . andhave perpetuated its monopolization of local tele-phone services."' 6 The plaintiffs therefore soughtthe standard antitrust remedy of treble damagesand declaratory and injunctive relief.' 7

The district court dismissed the case on the ba-sis of three rationales. First, the court held thatthe "filed rate" doctrine first recognized in Keoghv. Chicago & N.WR. Co."I 8 bars recovery of dam-ages based upon claims of overcharging. 1 9 Rely-ing on In Re Wheat Rail Freight Rate Antitrust Litiga-tion,120 the court found that such claims ofovercharging were subject to the filed rate doc-trine because the remedy sought by the plaintiffswas linked to the allegedly inflated filed rates.' 2 'Second, the court held that plaintiffs did not havestanding to bring suit to require Ameritech tocomply with the market-opening provisions of theTelecom Act. According to the court, such "claimscould severely threaten the delicate balance thatCongress has struck in attempting to ease thetransition of the telecommunications industryinto a competitive marketplace."'122 Finally, thecourt held that the Telecom Act establishes no af-firmative duties to consumers; therefore, plaintiffshave no cause of action based upon breach ofthese duties under the Telecom Act. ' 23 On the ba-sis of these three holdings, the court subsequently

114 Id. at 392.115 Id. at 399. (Plaintiffs accused Ameritech of "failing to

comply with its myriad duties under §§ 251, 252 and 271 ofthe telecommunications law.").

116 Class Action Complaint, Nature of the Action at 2,Goldwasser I, No. 97C6788, (N.D. Ill. Sept. 26, 1997).

117 Id. at 21.118 260 U.S. 156 (1922). The Court in Keogh held once

rates had been filed with and approved by the InterstateCommerce Commission by the Commission, those filed rateswere deemed to be "reasonable and nondiscriminatory." Id.at 161; see also County of Stanislaus v. Pacific Gas & Elec. Co.,114 F.3d 858, 862 (9th Cir. 1997), cert denied, 522 U.S. 1076(1998) (upholding the filed rate doctrine and explainingthat "[s]ince the 1920s, the 'filed rate' or 'filed tariff' doc-trine has barred antitrust recovery by parties claiming injuryfrom the payment of a filed rate for goods or services").

119 Goldwasser I, 222 F.3d, at 402.120 759 F.2d 305 (7th Cir. 1985).121 Goldwasser II, 222 F.3d, at 402.

granted Ameritech's 12(b) (6) motion to dismissthe case for failure to state a claim.

Even though the Seventh Circuit disagreed withthe lower court on the standing issue, a three-judge panel of the Seventh Circuit affirmed theremainder of the lower court's decision. In over-turning the lower court's finding that the plain-tiffs lacked standing, the Seventh Circuit firstfound that the plaintiffs were "direct purchas-ers.., forced to pay an alleged monopolistic over-charge."'124 The Seventh Circuit found that theplaintiffs, as subscribers of Ameritech local tele-phone service,'1 25 therefore satisfied the thresholdstanding requirement set forth in Illinois Brick Co.v. Illinois.12 6 In addition, the court found that theplaintiffs had described the proper antitrust harmthat the antitrust laws are designed to prevent 27

by asserting the alleged consequential increasedprices of local telephone service.' 28

Despite making an affirmative finding of stand-ing, the Seventh Circuit ultimately rejected theplaintiffs' claims on the basis that the alleged vio-lations of the Telecom Act were beyond the reachof the Sherman Act. The court held that that theTelecom Act imposed "more specific and far-reaching obligations" than those imposed by anti-trust laws. 129 "The fundamental fallacy in theplaintiffs' theory is that the duties the [TelecomAct] imposes on ILECs are coterminous with theduty of a monopolist to refrain from exclusionarypractices."'130 The court based its holding on itsinterpretation that Congress had the opportunityto adopt an antitrust scheme to achieve competi-tion in the local markets. 131 Yet, according to the

122 Goldwasserl, No. 97 C 6788, at 10.123 Id. at 11.124 Goldwasser I, 222 F.3d, at 398.125 Id.126 431 U.S. 720 (1977) (holding that suits by indirect

purchasers were barred).127 Associated General Contractors of Calif., Inc. v. Calif.

State Council of Carpenters, 459 U.S. 519, 539 (1983) (Su-preme Court held that plaintiff lacked standing because it"was neither a consumer nor a competitor in the market inwhich trade was restrained." The Goldwasser plaintiffs, in con-trast, were consumers in the relevant markets where the al-leged monopolistic acts by Ameritech occurred).

128 Goldwasser II, 222 F.3d, at 398 (holding that plaintiffshad made the requisite antitrust injury showing).

129 Id. at 401.130 Id. at 399.131 See id. (holding that "Congress could have chosen a

simple antitrust solution to the problem of restricted compe-tition in the local markets").

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court, in enacting the Telecom Act, Congresschose instead to create a regulatory scheme basedon chutes and ladders through which the incum-bent monopolist must jump.' 32 The court statedthat these "kinds of affirmative duties to helpone's competitors . . . do not exist under theunadorned antitrust laws."'133 Because the require-ments under the Telecom Act are more specificand onerous than those found in any antitrustlaws, the court refused to apply the antitrust lawsto such violations. 34

The court thus rejected the plaintiffs' claimsthat the breaches of duties under the TelecomAct are tantamount to antitrust violations, assert-ing instead that it would be both "illogical and un-desirable" to hold that such a failure to complywith the Telecom Act necessarily constitutes anantitrust violation. 135 First, this conclusion wouldbe illogical because the link between a violation ofa statutory regime and a monopolistic practicemay be too attenuated to be properly redressedthrough antitrust means.1 36 Second, this infer-ence would be undesirable because the "antitrustlaws would add nothing to the oversight alreadyavailable under the 1996 law."' 137 According to thecourt, the enforcement structure set forth in theCommunications Act that charges the Commis-sion with specific oversight responsibility is morethan adequate to deal with such alleged anticom-petitive practices.1 38

Finally, in considering whether any of the plain-tiffs' allegations could amount to a "freestandingantitrust claim," the court held that the plaintiffs'antitrust claims were too "inextricably linked" tobe divorced from the claims based on theTelecom Act. 139 Because the Telecom Act is morespecific, the court determined it must trump the

132 Id. (finding that Congress, "in an effort to jump-start

the development of competitive local markets ... imposed ahost of special duties on the ILECs").

33 Id. at 399-400 (referring to special ILEC-specific re-quirements, FCC and state public utility commissions' over-sight, and "a system of negotiated agreements" to accomplishlocal competition).

134 Id. at 401.135 Id. at 400.136 See id. at 400 (citing numerous examples of other laws

that dominating firms could violate regardless of its dominat-ing market position, including an agricultural firm that vio-lates safety or cleanliness food processing regulations; a com-puter processor firm that violates employment discriminationprohibitions; or a pharmaceutical firm that violates the Foodand Drug Administration's rules applicable to new drugs).

137 Id. at 401.

more general antitrust laws when both are impli-cated in the same complaint.140 While the courtexplicitly noted that the Telecom Act did not con-fer "implied immunity on behavior that wouldotherwise violate the antitrust law," the court didhold that the Telecom Act must also enforce anyduty that arises under the Telecom Act.141 There-fore under Goldwasser, consumers and competi-tors, and potentially the Antitrust Division of theDepartment of Justice ("DOJ"), are barred fromusing antitrust remedies to redress violations ofthe Telecom Act in non-competitive markets.142

The court indicated that antitrust remediesshould be reserved for deregulated, competitivemarkets, such as the long-distance market cre-ated after the government and new market en-trants successfully broke up AT&T's monopoly. 43

Contrasting the state of these competitive marketswith the current status of the local exchange mar-kets, which are still subject to the Telecom Act's"detailed regulatory regime," the court held that"[a]t some appropriate point down the road, theFCC will undoubtedly find that local markets havealso become sufficiently competitive that the tran-sitional regulatory regime can be dismantled andthe background antitrust laws can move to thefore."'

4 4

D. Split in Lower Courts has Created Legaland Regulatory Uncertainty

Several district courts, in interpreting the spe-cific boundaries of these two legislative schemes,have rejected the holding of Goldwasser and al-lowed the plaintiffs' antitrust claims to stand.These decisions have effectively denied those de-fendants any de facto antitrust immunity. 145 In

138 Id.139 Id.140 See id. (holding that the "1996 Act is... more specific

legislation that must take precedence over the general anti-trust laws, where the two are covering precisely the samefield").

141 Id.142 Id. at 401-02.143 See id. at 401.144 Id. at 401-02.145 See, e.g., Electronet Intermedia Consulting, Inc. v.

Sprint-Florida, Inc., No. 4:00-cv176-RH (N.D. Fla. Sept. 21,2000); Bell At. Network Services, Inc. v. Ntegrity TelecontentServs., Inc., No. 99-5366 (D.N.J. Nov. 1, 2000); Stein v. PacificBell Co., No. C 00-2915SI, 2001 WL 1358946 (N.D. Cal. Feb.14, 2001); CalTech Int'l Telecom Corp. v. Pacific Bell, No. C-97-2105-CAL (N.D. Cal. Oct. 25, 2000) (order regarding is-

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CalTech Int'l Telecom Corp v. Pacfic Bell, the courtheld that "the Telecom Act does not 'impair' theapplication of the antitrust laws to the telecom-munications industry."146 As a result, the court an-nounced its intention to judge CalTech's allega-tions that Pacific Bell had failed "to provide thefacilities and services mandated by the TelecomAct" and CalTech's contentions that Pacific Bell'sfacilities were "essential facilities" by the "stan-dards of the antitrust laws."'147 The court simplydemanded the required Sherman Act showing.Ultimately, the jury reached a verdict for theplaintiff in the amount of $1.4 million.

Similarly, the district court in Stein v. Pacific Belldenied a second Goldwasser motion proffered byPacific Bell.148 The court dismissed the plaintiffs'antitrust claims for denying essential facilities andmonopoly leveraging; however, the court allowedthe plaintiffs' antitrust claims based on violationsof an interconnection agreement under theTelecom Act to stand. 149 The court distinguishedits holding from Goldwasser on the basis of theplaintiffs' allegations of violations in "bad faithand . . . other exclusionary practices." 50 Accord-ing to the court, the Goldwasser court never ad-dressed the issue of "whether violations of the1996 Act, if done in a 'predatory' manner... canmake up an independent basis for liability underthe Sherman Act."' 15' The Stein plaintiffs, in con-trast to the Goldwasser plaintiffs, presented thecourt with a satisfactory showing of attempted mo-nopolization through allegations of "predatory'behavior."' 52 In denying the defendant's motionto dismiss, the court reasoned "Stein has allegedthe type of conduct that exceeds a monopolist'sright to deal or not to deal with competitors, in

sues for trial); Covad Comunications.Co. v. Pacific Bell, No. C98-1887SI, 1999 U.S. Dist. LEXIS 22789 (N.D. Cal. Dec. 14,1999).

146 CalTech Int'l Telecom Corp. v. Pacific Bell, Order Re-gardingIssuesfor Trial, No. C-97-2105-CA, 1 (N.D. Cal. Oct.25, 2000) (order regarding issues for trial).

147 CalTech Int'l Telecom Corp. v. Pacific Bell, Order Re-gardingIssuesfor Trial, N.D. Cal. Case No. C-97-2105-CAL (or-der filed Oct. 25, 2000); see also Consolidated Gas. Co. of Fla.,Inc. v. City Gas Co. of Fla., 880 F. 2d 297, 301 (11th Cir.1989) (holding that "[p]ervasive regulation will not protectan industry from antitrust liability for 'conduct that is volun-tarily initiated'") (quoting MCI Communications Corp. v.American Tel. & Tel. Co., 708 F.2d 1081, 1103 (7th Cir.), certdenied, 464 U.S. 891 (1983)).

148 Stein v. Pacific Bell Co., No. C 00-2915SI, 2001 WL1358946, at *10 (N.D. Cal. Feb. 14, 2001).

149 Id. at *10-11.150 Id.

violation of section 2 of the Sherman Act.' 1 53 Thedistrict court therefore rejected Pacific Bell's ex-pansive reading of Goldwasser and allowed theplaintiffs' antitrust claims to stand.

Likewise, in Electronet Intermedia Consulting, Inc.v. Sprint-Florida, Inc., the district court denied theILEC's motion to dismiss. 154 A footnote in the or-der distinguished the case from Goldwasser

It is true, as Sprint notes, that a violation of the[Telecom Act], without more, does not an antitrust vio-lation make. In the case at bar, however, unlike in Gold-wasser, there are allegations of misconduct separate andapart from any alleged violations of the [Telecom Act](internal citations omitted). 15 5

The Florida district court therefore refused thedefendant's requests for antitrust immunity andallowed Electronet's claims under the antitrustlaws to go forward.1 56 Similarly, the court in CovadCommunciations Co. v. Pacific Bell, a pre-Goldwasserdecision, also found sufficient evidence waspresented by Covad to deny Pacific Bell any sortof antitrust immunity. 157 The court held that the"plaintiff has sufficiently alleged that Pacific Bellhas imposed costly and unnecessary conditionsupon access to its network, and intentionallydelayed performance of obligations under theagreement, in an effort to prevent it from enter-ing the market.' 158

The court in Law Offices of Curtis v. Tinko, LLPv. Bell Atlantic Corp., on the other hand, grantedBell Atlantic's Goldwasser motion to dismiss; how-ever, it did not entirely rule out the possibility ofan antitrust claim for violation of the TelecomAct.' 5 9 In that case, the plaintiff "failed to allegeany willful acquisition or maintenance of monop-oly power by Bell Atlantic."'160 Thus, the courtheld that Bell Atlantic's violation of section 251

151 [d.152 Id.153 Id. at *7.154 Electronet Intermedia Consulting, Inc. v. Sprint-Flor-

ida, Inc., No. 4:00cvO76rh (N.D. Fla. Sept. 21, 2000).155 Id. at 2, n.J.156 Id. at 2.157 Covad Communications Co. v. Pacific Bell, No. C 98-

1887SI, 1999 U.S. Dist. LEXIS 22789, at *33 (N.D. Cal. Dec.14, 1999).

158 Id. at *32-33.159 Law Offices of Curtis V. Trinko, LLP v. Bell Atlantic

Corp., 123 F. Supp. 2d 738, 741 (S.D.N.Y. 2000).161) Id. at 741-42 (holding that the plaintiff failed to estab-

lish the second element of a Sherman Act §2 claim, the will-ful acquisition or maintenance of monopoly power, in point-ing "to only one act or series of acts taken by Bell Atlantic tomaintain its monopoly power").

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did not equate with a violation of antitrust lawsbut left the door open to the possibility of astronger showing of unlawful use of monopolypower that would sustain a Sherman Act claim.

The domino effect of the Goldwasser decision,though, is clearly evident by other recent deci-sions that have followed Goldwasser's lead. Relyingon Goldwasser, the Nevada district court in MGCCommunications, Inc. v. BellSouth Telecomms., Inc. re-jected attempts by MCG Communications, Inc., d/b/a Mpower Communications Corp. ("Mpower"),to "enforce BellSouth's obligations under theTelecommunications Act through the tool of anantitrust suit."'' The court recited a summary ofGoldwasser and concluded, "[i]n this case, as inGoldwasser, Mpower's claims are based on allegedviolations of the Telecommunications Act or FCCorders implementing the Telecom Act."' 62 As aresult, the court found that the violations allegedby Mpower did not amount to a violation of theSherman Act.' 63 Furthermore, the court held thatMpower's claims that BellSouth denied Mpowerreasonable access to essential facilities are "[a]snoted in Goldwasser, . . . inextricably intertwined

to the claims under the Telecom Act and, even ifthey were not, the Telecom Act is more specificlegislation that takes precedence over the generalantitrust legislation."'1 64 Despite the fact that Gold-wasser involved a class of consumers, whereas thiscase featured a competitor suing the incumbent,the district court still extended the Goldwasserholding to reach the same result of de facto im-munity for competitor suits alleging antitrust vio-lations in the form of anticompetitive actions.

Similarly, Intermedia filed suit against Bell-South alleging that BellSouth has been mono-polizing the telecommunications industry by de-

161 MGC Communications, Inc. v. BellSouthTelecomms., Inc., 146 F. Supp. 2d 1344, 1350 (S.D. Fla.2001).

162 Id. at 1352.163 Id.164 Id. at 1352.165 Intermedia Communications, Inc. v. BellSouth

Telecomms., Inc., No. 8:00 Civ-1410-T-24(C), slip op. (M.D.Fla. Dec. 15, 2000).

166 Id. at 6, relying on AT&T Wireless PCS, Inc. v. City of

Atlanta, 210 F.3d 1322, vacated on other grounds, 223 F.3d 1324(11th Cir. 2000).

167 Intermedia Communications, Inc. v. BellSouthTelecomms., Inc., No. 8:00 Civ-1410-T-24(C), slip op. at 6(M.D. Fla. Dec. 15, 2000).

168 Id. at 8.169 MGC Communications, Inc. v. BellSouth

nying competitors sufficient access to essential fa-cilities.165 The district court initially interpretedGoldwasser narrowly by finding that the TelecomAct and the antitrust laws were independent fromeach other rather than co-dependent. 66 It heldthat "any behavior that can be the basis for an an-titrust claim before the creation of the [TelecomAct] still can be the basis of an antitrust claim af-ter the creation of the [Telecom Act] ."167 Never-

theless, the court ultimately applied Goldwasserbroadly to dismiss Intermedia's antitrust claimsholding that "all of [Intermedia's] antitrust claimsmust fail because they are . . . based on [Bell-

South's] alleged violations of the [TelecomAct] ... "168 Thus,just as the Nevada district courtdid in MCG Communications, Inc. v. BellSouth

Telecomms., Inc,1 6 9 the court in Intermedia appliedthe holding of Goldwasser to summarily bar com-petitors' claims of antitrust violations based on ex-clusionary conduct that also violates the TelecomAct. 170

Finally, the Richmond, Virginia district court inCavalier Telephone, LLC v. Verizon most recentlyused the Goldwasser decision to grant Verizon'smotion to dismiss on the basis that Cavalier's alle-gations "merely represent[ed] violations of the1996 Act dressed up in antitrust garb.' 171 Thecourt, citing Goldwasser's holding that "the 1996Act creates 'more specific and far-reaching obliga-tions' than those embodied in § 2 of the ShermanAct,"' 172 consequently held that "Cavalier cannotstate a claim under § 2 of the Sherman Act if italleges violations of affirmative duties created bythe 1996 Act."' 173 Thus, despite both the Gold-wasser court's and the Cavalier court's explicit rec-ognition of the harmonious nature of theTelecom Act and the antitrust laws, 174 both deci-

Telecomms., Inc., 146 F. Supp. 2d 1344, 1350 (S.D. Fla.,2001).

170 Intermedia Communications, Inc. v. BellSouthTelecomms., Inc., Brief of the Appellant Intermedia Commu-nications,lnc., No. 01-10224-JJ, (11th Cir. Mar. 20, 2001) at 4(describing BellSouth's anticompetitive conduct) and at 28(describing the lower court's reliance on Goldwasser to dis-miss Intermedia's antitrust claims).

171 Cavalier Telephone, LLC v. Verizon Virginia, Inc.,No. 3:01CV736, at 4 (4th Cir. filed Mar. 27, 2001).

172 Id. at 5 (quoting Goldwasser II, 222 F.3d at 401).173 Id. at 5.174 See id. at 4 (holding that "the 1996 Act is not at odds

with federal antitrust laws . . . "); see also Goldwasser II, 222F.3d at 401 (holding that the duties on ILECs imposed by theTelecom Act "do not conflict with the antitrust laws").

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sions effectively foreclose the availability of anti-trust remedies for any violations that "aregrounded in the 1996 Act."'175

The split in the district court opinions evi-dences the legal confusion circulating in the wakeof Goldwasser and the negative domino effect thedecision has had on later court decisions. The va-rying legal interpretations of the Goldwasser deci-sion throughout the district courts reveal theshaky foundation on which the decision standsand demonstrates the inherent inconsistencies instatutory interpretation and intent, legal prece-dent and accepted public policy. As a result, addi-tional review and an affirmative resolution areneeded to settle the legal and regulatory uncer-tainty currently surrounding this issue and to haltthe toppling effect of the Goldwasser decisionbefore it is too late.

II. GOLDWASSER GOT IT WRONG

A. Goldwasser Ignored A Long History ofReliance on Antitrust Protections andEnforcement

The Goldwasser court ignored the historical rolethat the government and federal antitrust authori-ties176 have played in both the development ofUnited States telecommunications policy and incurbing industry abuse of monopoly power. In

175 Cavalier Telephone, No. 3:01CV736, at 10.176 See William E. Kovacic, Downsizing Antitrust: Is It Time

to End Dual Federal Enforcement?, ANTITRUST BULL. 505, 508(1996) ("The federal antitrust statutes and court decisions in-terpreting them have created four major enforcementagents: two federal agencies (the DOJ and the FTC), the stateattorneys general, and private parties such as businesses andconsumers").

177 Modification of FinalJudgment, United States v. AT&T,552 F. Supp, 131 (D.D.C. 1982), affd mem. sub nom., Marylandv. United States, 460 U.S. 1001 (1983); see, e.g.,Jim Chen, TheLegal Process and Political Economy of Telecommunications Reform,97 COLUM. L. REV. 835, 852 (1997) (the divestiture agree-ment, which broke up AT&T into seven RBOCs, has beencalled "the crowning achievement of American telecommuni-cations law's first century").

178 PRACTICING LAW INSTITUTE, TELECOMMUNICATIONS

CONVERGENCE OVERVIEw 56 (2001); see, e.g., Lawrence A. Sul-livan, Elusive Goals Under the Telecommunications Act: PreservingLong Distance Competition Upon Baby Bell Entry and Attaining Lo-cal Exchange Competition: We'll Not Preserve the One Unless WeAttain the Other, 25 Sw. U. L. REV. 487, 527 (1996) ("The lackof capacity of regulators to deal with [anticompetitive] tacticsis emblematic of the pre-MFJ period. The FCC's failure toinhibit such practices through regtlatory means was docu-mented at the trial of DOJ's case against AT&T.").

179 United States v. AT&T, 552 F. Supp. 131 (D.D.C.

fact, during the pre-Modification of Final Judg-ment 177 phase through the passage of theTelecom Act, the Department of Justice and thefederal court system were more influential inshaping the telecommunications industry thanthe Commission. 178 In 1974, the Antitrust Divisionof the Department of Justice initiated suit againstAT&T for a broad litany of antitrust violationsstretching back 70 years. 179 Assistant AttorneyGeneral William Baxter found "the source ofAT&T's monopoly power to be in its control overthe local networks, which had been protectedfrom competition as a result of state regulationfor over seventy years."' 80 In United States v.AT&T, the court considered the overlapping reg-ulatory schemes:

[T]he Antitrust Division faced an initial burden of es-tablishing that AT&T's conduct was not exempt fromthe antitrust laws by virtue of FCC regulation. In fact,the FCC generally supported the Division's assertion ofantitrust jurisdiction and, with this help, the govern-ment was able to defeat preliminary jurisdictional mo-tions.

1 8 1

While Judge Greene specifically addressed the is-sue of whether the communications statutes con-ferred an implied immunity from antitrust law, he"held that immunity could not be implied fromsuch regulation."' 8 2 The court affirmed the result-ing consent decree entered into by all the parties

1982) (complaint filed Nov. 20, 1974), afffd sub. nom. Mary-land v. United States, 460 U.S. 1001 (1983). In addition tothe monumental divestiture of AT&T, the judiciary also filedover 40 private antitrust suits against AT&T.

180 Geoffrey M. Peters, Is the Third Time The Charm? AComparison of the Government's Major Antitrust Settlements withAT&T This Century, SETON HALL L. REv., 252, 268 (1985).

181 Donald I. Baker, Government Enforcement of SectionTwo, 61 NOTRE DAME L. REV. 898, 916 (1986).

182 George J. Alexander, Antitrust and the Telephone Indus-try After the Telecommunications Act of 1996, 12 SANTA CLARACOMPUTER & HIGH TECH L.J. 227, 244 (1996); see also UnitedStates v. American Tel. & Tel. Co., 461 F. Supp. 1314, 1321-22 (D.C. Cir. 1978) (holding that "[t]he Supreme Court hasrepeatedly noted that 'repeals of the antitrust laws by implica-tion from a regulatory statute are strongly disfavored, andhave only been found in cases of plain repugnancy betweenthe antitrust and regulatory provisions'") (quoting Otter TailPower Co. v. United States, 410 U.S. 366, 372). In this caseagainst AT&T, the court also explained in a footnote that"[e]ven when the regulation is 'pervasive,' and the preciseconduct attacked in an antitrust suit is being regulated, animmunity will be found only if the antitrust remedy conflictswith rather than complements the enforcement efforts of theregulatory agency." Id. at 1326, n.36 (citing Mt. Hood Stages,Inc. v. Greyhound Corp., 555 F.2d 687 (9th Cir. 1977).

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in 1982 in the Modification of Final Judgement("MFJ").

The problem in 1974 of "attempted entry ofcompeting telephone companies" that was beingbarred by AT&T is similar to the one that is at theheart of Goldwasser. 18s Yet despite the history ofju-dicial intervention in the three previous antitrustsettlements with AT&T, 18 4 the court in Goldwasserwas unwilling to step in likewise against Amer-itech. 18 5 Despite citing the AT&T success storyand pointing to the long-distance industry as amodel of competition, the court overlooks thefact that the antitrust case played an instrumentalrole in achieving that success. 18 6 The Goldwasser

court believed that this "success of the companiesthat challenged AT&T's hegemony over long dis-tance shows that" competition could similarly beachieved in the local exchange market. 18 7 Thisfaulty premise overlooks the fact that "the devel-opment of local exchange competition is simplyan order of magnitude more complicated, morelabor-intensive and more capital-intensive thanwas the development of long distance competi-tion.' 88 In its historical narrative describing theevents leading up to the passage of the TelecomAct, the court recognized the applicability of anti-trust laws in the context of the AT&T monopolybreakup. However, when comparing the long-dis-tance and local marketplaces and touting the suc-cess of the long distance industry competitors, thecourt ignored the "sheer complexity of the task"of breaking into the local market as compared toentering the long distance market.'8 9 Even moreimportantly, the Goldwasser court ignored theplain fact that the long distance companiesachieved their success only after the 1982 settle-ment of the government's antitrust suit against

183 Geoffrey M. Peters, Is the Third Time The Charm? A

Comparison of the Government's Major Antitrust Settlements withAT&T this Century, 15 SETON HALL L. Rcv. 252, 274 (1985).

184 See Decree, United States v. AT&T (D. Or. 1914) (or-der of Sept. 7 modifying decree of Mar. 26, 1914) (the firstsettlement reached with AT&T); see United States v. WesternElec. Co., 1956 Trade Cas. (CCH) P68,246 (D.N.J. Jan. 24),vacated and replaced, 1982-2 Trade Cas. (CCH) P64,900(D.D.C. 1956) (the second settlement with AT&T); see Modifi-cation of Final Judgment, United States v. AT&T, 552 F. Supp,131 (D.D.C. 1982), afjfd mem. sub nom., Maryland v. UnitedStates, 460 U.S. 1001 (1983) (the third settlement reachedwith AT&T).

185 Goldwasser II, 222 F.3d at 390.186 Id. at 399. Statistics show that since 1982, "long-dis-

tance prices for residential customers have declined sixty-sixpercent, in real terms; minutes of use have increased dramat-

AT&T, and the resulting consent decree, brokeup the AT&T monopoly by legally forcing a sepa-ration between AT&T's long lines and AT&T's lo-cal exchange companies in order to ensure MCIand other long distance companies had access tothe local network infrastructure. 90

B. Goldwasser Ignored the Plain Language ofthe Telecom Act

The Goldwasser court also ignored the plain lan-guage of the Act. The 1996 TelecommunicationsAct expressly preserved the relevance and applica-bility of the antitrust laws within a new statutoryscheme. The antitrust savings clause states, "noth-ing in this Act or the amendments made by thisAct shall be construed to modify, impair, or super-sede the applicability of any of the antitrustlaws." 191 Congress, through the plain language ofthe statute, forbade any subversion of the antitrustlaws. The Seventh Circuit in Goldwasser ignoredthis express recognition of the ongoing applicabil-ity of the antitrust laws in the telecommunicationsregulatory arena, as United States Attorney Gen-eral John Ashcroft recently testified:

In the enactment of the 1996 telecommunications re-form measures, the Congress expressed its will and in-tent with very substantial clarity with a savings clause in-dicating that the antitrust prerogatives that inure to theenforcement authorities would remain in place. Whenthe [Goldwasser court] . . . wrote an opinion which wasinterpreted to mean this was no longer the case, we feltit very important that the [DOJ] again reiterate whatthe Congress had explicitly, in our judgment, madeclear in the 1996 Act.' 9 2

Congress therefore expressly preserved the roleof antitrust law to assist in the achievement of theobjectives of the Telecom Act with the inclusion

ically; and there are now literally hundreds of long distancecarriers from which to choose."John H. Shenefield, Antitrust-The Next One Hundred Years, 70 ST. JOHN's L. REv. 189, 203(1996).

187 Goldwasser II, 222 F.3d at 390.188 Kennard Statement, supra note 12, at 14.189 Id.

190 See Modification of Final Judgment, United States v.AT&T, 552 F. Supp, 131 (D.D.C. 1982), affd mem. sub nom.,Maryland v. United States, 460 U.S. 1001 (1983).

191 Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 156, §601(b)(1).

192 Hearing before the House Judiciary Comm. on the Depart-ment of Justice, 107th Cong. (2001) (testimony of U.S. Attor-ney General John Ashcroft) (commenting on the DOJs ami-cus brief filed in Intermedia Comm., Inc. v. BellSouthTelecomm., Inc.).

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of a specific antitrust savings provision. Further-more, in light of the Supreme Court's decision inChevron U.S.A., Inc. v. Natural Resources DefenseCouncil, Inc., neither the courts nor agencies cansubstitute their own interpretations of such clearlanguage. 193 The Supreme Court has held thatwhen Congress has clearly pronounced its statu-tory intent in the plain language it chooses, this

pronouncement effectively binds both the courtsand government agencies. 194

In addition to the inclusion of this express pro-vision, the architects of the Act continued to im-plicitly preserve the applicability of federal anti-trust laws with the additional clause "[t]his Actand the amendments made by this Act shall notbe construed to modify, impair, or supersede Fed-eral, State, or local law unless expressly so pro-vided in such act or amendments." 195 Thus, instating that "[t]he 1996 Act is, in short, more spe-cific legislation that must take precedence overthe general antitrust laws, where the two are cov-ering precisely the same field," 19 6 the Goldwassercourt clearly ignored the congressional pro-nouncement that nothing in the Telecom Actshall "be construed to modify, impair or super-sede Federal . . . law."' 19 7 Despite the plain lan-guage of the statute forbidding such action, theSeventh Circuit effectively gave antitrust law thebackseat to the Telecommunications Act and con-ferred antitrust immunity upon those companieswhose behavior is so anticompetitive that it notonly violates the Telecom Act but also is tanta-mount to violation of the antitrust laws. ' 8 Gold-wasser therefore ignored the Telecom Act's clearmandate that the provisions of the Communica-tions Act and the antitrust laws are both to beused as tools to deter and arrest anticompetitiveconduct. 19 9

C. Goldwasser Ignored the Legislative History ofthe Telecom Act

Even if there was some question as to the plainlanguage of the statute, the legislative history sur-rounding the Telecom Act alone demonstratesthat both the legislative and the executivebranches of the government intended to protectthe applicability of the antitrust laws. In the floordebate preceding the passage of the Telecom Act,members of Congress repeatedly emphasized thecontinuing role that antitrust laws must play, ex-plaining that "[r]elying on antitrust principles isvital to ensure that the free market will work tospur competition and reduce government involve-ment in the industry."20"1 This sentiment wasechoed by Senator Thurmond, Chairman of theSenate Judiciary Committee's Antitrust, BusinessRights and Competition Subcommittee, one weekbefore the signing of the Act:

[T] he unequivocal antitrust savings clause ... explicitlymaintains the full force of the antitrust laws in this vitalindustry... Application of the antitrust laws is the mostreliable, time-tested means of ensuring that competi-tion, and the innovation it fosters, can flourish to bene-fit consumers and the economy.2 0 '

Then, on the day of the signing of the TelecomAct, the Executive Branch reaffirmed the impor-tance of the antitrust laws in helping to achievethe goals of the Telecom Act. President Clintonexplicitly applauded the antitrust savings clause,stating, "the Act's emphasis on competition is alsoreflected in its antitrust savings clause. This clauseensures that even for activities allowed under orrequired by the legislation, or activities resultingfrom FCC rulemaking or orders, the antitrust lawscontinue to apply fully."202 The legislative recordclearly demonstrates both the legislative and exec-utive branch recognition of the past role of the

193 Chevron U.S.A., Inc. v. Natural Resources DefenseCouncil, Inc., 467 U.S. 837 (1984).

194 Id.; see also WILLIAM F. Fox, JR., UNDERSTANDING AD-

MINISTRATIVE LAw 412 (Matthew Bender & Co., Inc. 3rd ed.1997) (1986) (stating that under the Chevron doctrine, ifCongress has directly addressed the matter in question, then"both agency and courts must defer to the Congressional po-sition irrespective of their own views on the subject").

195 Telecommunications Act of 1996, Pub. L. No. 104-

104, 110 Star. 156, §601(c) (1).196 Goldwasser I1, 222 F.3d at 401.197 Telecommunications Act of 1996, Pub. L. No. 104-

104, 110 Stat. 156.198 Goldwasser II, 222 F.3d at 401-402.199 See Intermedia Communications, Inc. v. BellSouth

Telecommunications, Inc. 173 F. Supp. 2d 1282 (11th Cir.2000).

210 141 CONG. REC. S18586-01 (daily ed. Dec. 14, 1995)(statement of Sen. Leahy).

201 142 CONG. REC. S687-01, 8711 (daily ed. Feb. 1, 1996)

(statement of Sen. Thurmond).202 President William J. Clinton, Statement Upon Sign-

ing S. 652, Feb. 8, 1996, 1996 U.S.C.C.A.N. 228-1, 228-3.

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antitrust laws in transforming traditional monopo-listic markets into competitive ones and the intentof both government branches that the antitrustlaws continue to play that role.

Even more specifically, however, Congress dis-cussed the future applicability of the antitrust lawsin the newly envisioned deregulated telecommu-nications marketplace. The record demonstratescongressional recognition of the critical role ofthe antitrust laws in prying open the traditionalBell monopolies:

[T]he bill contains an all-important antitrust savingsclause which ensures that any and all . . . anticompeti-ive activities are fully subject to the antitrust laws....And by maintaining the role of the antitrust laws, thebill helps to ensure that the Bells cannot use their mar-ket power to impede competition and harm consum-ers.2 0 3

The legislative history of the Telecom Act thusclearly supports Congress's intent that the anti-trust laws be applied in conjunction with the der-egulatory principles of the Telecom Act to achievea competitive telecommunications market. Asshown by the affirmative considerations of boththe antitrust laws in general and the antitrust sav-ings clause specifically, Congress did not intendfor the Telecom Act to preempt antitrust laws andconfer antitrust immunity upon the incumbent lo-cal exchange monopolies.

The Goldwasser court, however, ignored suchconsiderations in concluding that only after theCommission makes the determination that localmarkets are sufficiently competitive can "the tran-sitional regulatory regime . . . be dismantled andthe background antitrust laws can move to thefore."20 4 Perhaps predicting such a challenge,Senate Commerce Committee Chairman andTelecommunications Act Conference Committee

203 142 CONG. Rc. H1145-06, H1171 (daily ed. Feb. 1,1996) (statement of Rep. Conyers).

204 Goldwasser II, 222 F.3d at 401-02.205 142 CONG. Ric. S687-01, S687 (daily ed. Feb. 1, 1996)

(statement of Sen. Pressler).206 Goldwasser II, 222 F.3d at 399-400.207 Id. at 399 (Congress "entrusted supervision of those

duties to the FCC and the state public utility commis-sions . . . ").

208 See, e.g., 142 CONG. REc. S687-01 (Feb. 1, 1996) (state-ment of Sen. Hollings) ("the Department ofJustice was pro-tected in the sense that what we did was have the savingsclause for all antitrust laws included, positive language, andthe substantial weight of the Department of Justice be givenby the Federal Communications Commission in their deci-sion").

209 See 142 CONG. Rrc. H1157 (Feb. 1, 1996) (statementof Rep. Hyde) ("the conferees acknowledge the long experi-

Chairman Larry Pressler stated on February 1,1996 that the Telecom Act "does not affect ourantitrust laws. The antitrust laws stay in place. 20 5

Contrary to the court's opinion in Goldwasser thatthe antitrust laws are supplanted by the TelecomAct and should only be triggered once a markethas become sufficiently competitive, the legisla-tive record thus confirms congressional intentthat antitrust laws should play a major and contin-uing role in keeping the Bell incumbents' monop-olistic practices in check. 206

Furthermore, Goldwasser appoints the Commis-sion as the sole government agency responsiblefor implementing the Telecom Act. 20 7 However,the legislative history of the Telecom Act demon-strates congressional intent that both the FCC andthe DOJ guide such implementation. 208 Through-out legislative debates, Congress recognized thehistorical role that the DOJ had played in actingas our "country's antitrust expert. '" 20 9 Similarly,

Congress acknowledged the successful, historicalrole that antitrust laws played in introducing com-petition to strangled markets. 21 0 Because of this

established DOJ role and the traditional promi-nence of antitrust laws, Congress explicitly statedthat the Telecom Act "does not disrupt the Na-tion's antitrust law and does not change the DOJ'srole in policing unfair competition and predatorypricing. '" 211 The antitrust laws therefore remain ineffect as one of the DOJ's primary policing tools.

Furthermore, the Goldwasser court establishedthat the more specific rules of the Telecom Actdisplaced the antitrust laws.2 1 2 Congress, how-ever, specifically addressed the applicability of theantitrust laws, despite the existence of FCC regula-tions:

ence and considerable expertise [the DOJ] has developed inthis field"); see also 142 CONG. REc. S698 (Feb. 1, 1996) (state-ment of Sen. Kerrey) ("[t]he Antitrust Division has unrivaledexpertise in assessing marketplace effects, particularly so intelecommunications, where it has been deeply involved con-tinuously for more than 20 years").

210 See, e.g., 142 CONG. Rrc. H1171 (Feb. 1, 1996) (state-ment of Rep. Conyers) ("Antitrust law is synonymous withlow prices and consumer protection-and that is exactlywhat we need in our telecommunications industry").

211 142 CONG. REC. S718 (daily ed. Feb. 1, 1996) (state-

ment of Sen. Exon).212 Goldwasser I, 222 F.3d at 401 ("The 1996 Act imposed

duties on the ILEC that are ... more specific and far-reach-ing obligations ... The 1996 Act is... more specific legisla-tion that must take precedence over the general antitrustlaws.").

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During the Antitrust Division's antitrust case in the1970's against the Bell system ... some argued that theexistence of FCC regulations displaced the antitrustlaws and made them inapplicable. The courts emphati-cally rejected that challenge them [sic], and the anti-trust savings clause in the bill today makes clear thatthat question cannot be reopened. 2 13

The legislative history of the Telecom Act there-fore effectively forecloses the interpretation of theGoldwasser court that the more specific regulationsof the Telecom Act displace the traditional appli-cability of the antitrust laws.

Finally, in addition to affirmative congressionalconsideration of the continued applicability ofthe antitrust laws, the implication of the congres-sional repeal of Section 221 (a) of the Communi-cations Act also demonstrates congressional in-tent to prevent any interpretation of antitrust im-munity.2 14 Section 221 (a) had created an antitrustsafe-haven for telecommunications mergers byrendering transactions deemed by the Commis-sion to be in the public and consumers' interestimmune from antitrust review. 215 The Senate re-port analyzing the bill explains this conscious ef-fort to eliminate any antitrust immunity, stating,"[t]he repeal would not affect the Commission'sability to conduct any review of a merger for Com-munications Act purposes . . . Rather, it wouldsimply end the Commission's ability to confer an-titrust immunity." 21 6 Congress thus realized thatany form of antitrust immunity would be counter-productive in achieving its goal of a competitive,deregulated telecommunications marketplace. 217

This determination bolstered the overall congres-sional determination to preserve the authority ofantitrust authorities to enforce the Act throughthe antitrust savings clause. 218

213 142 CONG. REc. S687-01, S711 (daily ed. Feb. 1, 1996)(statement of Sen. Thurmond).

214 See 47 U.S.C. §221 (a) (repealed by Telecommunica-tions Act of 1996, Pub. L. No. 104-104, 110 Stat. 56).

215 Maurice E. Stucke & Allen P. Grunes, Antitrust and theMarketplace of Ideas, 69 ANTrrRUST L. J., 249, 290 (2001).

216 S. Rep. No. 104-230 (1996), at 442, available at 1996WL 54191.

217 142 CONG. REC. S687-01, 711 (daily ed. Feb. 1, 1996)(statement of Sen. Thurmond); see also id. ("The importanceof the antitrust savings clause is underscored by the decisionto repeal section 221(a) of the Communications Act of1934 ... the fact that this exemption has been eliminated inthis legislation is another confirmation that the Congress in-tends for the antitrust laws to be the means by which freemarkets are maintained in telecommunications.").

218 See id.

D. Goldwasser Ignored Legal Precedent

Extensive legal precedent shows that a regula-tory scheme like the Communications Act doesnot confer immunity from antitrust liability uponthose who fall under the regulatory scheme. In aprivate antitrust suit initiated by MCI Communi-cations Corp. against AT&T, AT&T moved to dis-miss the suit.2 19 MCI survived the motion to dis-miss by demonstrating that "AT&T had unlawfullyprevented interconnection for newly deregulatedlong distance providers with its then monopolyover the network for local telephone service thatwas necessary to complete both ends of any longdistance call." 22 0 The court in the Seventh Circuit,the same circuit of Goldwasser, stated, "the merepervasiveness of a regulatory scheme does not im-munize an industry from antitrust liability for con-duct that is voluntarily initiated. '" 221 The SeventhCircuit went even further by characterizing the lo-cal networks at issue in the case as "essential facili-ties" to impose antitrust liability for refusal to in-terconnect.222 The court defined an essential fa-cility as "one that competitors must have, but areunable, for economic or technical reasons, to rep-licate. Therefore, unless access to the facility ismandated, competition of any kind cannot oc-cur."223 The Seventh Circuit in Goldwasser thus ig-nored its own binding precedent22 4 in recentlyholding that Ameritech was entitled to regulatoryimmunity and rejecting AT&T's assertion of anantitrust immunity defense in MCI v. AT&T. De-spite the fact that AT&T was then in control of the"local distribution facilities" and that AT&T wassubject to FCC regulations to regarding intercon-

219 MCI Communications Corp. v. AT&T, 708 F.2d 1081,1101 (7th Cir. 1983), cert denied, 464 U.S. 891 (1983).

220 Spencer Weber Waller, Antitrust as Consumer Choice:Comments on the New Paradigm, 62 U. Prrr. L. REv. 535, 537(2001).

221 MCI Communications Corp. v. AT&T, 708 F.2d at1103.

222 Id. at 1132-33.223 Alexandra M. Wilson, Harmonizing Regulation by Pro-

moting Facilities-Based Competition, 8 GEO. MASON L. REv. 729,743 (2000).

224 See generally Haas v. Abrahamson, 910 F.2d 384, 393(7th Cir. 1990) (holding that a legal decision remains con-trolling "unless and until [it has] been overruled or under-mined by the decisions of a higher court, or other super-vening development... ").

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nection requirements, the Goldwasser court cre-ated an antitrust immunity exception for ILECsthat runs directly afoul of its own legal prece-dent.225

IV. THE DOMINOS OF GOLDWASSER-CONGRESS MUST STEP INTO THEGAME BEFORE COMPETITION LOSES

While the two separate statutory schemes-theTelecom Act and the antitrust laws-may employdifferent mechanisms to accomplish the same endof a competitive marketplace, the compatibility ofthese two schemes is explicitly recognized in theexpress and implied antitrust savings clauses ofthe Telecom Act, the legislative history of the Actand extensive legal and historical precedent. TheGoldwasser court, however, based its holding onthe incompatibility of the two sets of procedures.This holding is motivated by the fear that "theelaborate system of negotiated agreements andenforcement established by the Telecom Actcould be brushed aside by any unsatisfied partywith the simple act of filing an antitrust action."226

As a result, the Goldwasser court determined thatthe Telecom Act, as the more specific legislation,should control. At first blush, the Goldwasser deci-sion may seem to give the Telecom Act moreteeth. In actuality, such conferral of de facto anti-trust immunity on the incumbent undercuts Con-gress's intentions in enacting the market-openingprovisions of the Act and threatens to sever thehistoric partnership between the Commission andthe DOJ which guarantees the DOJ a role in re-viewing the monopoly power of the RBOCs. 22 7

This decision has broad, negative policy ramifi-cations. The drafters of the Telecom Act con-structed a careful balance to alleviate a traditionalmonopoly power. Goldwasser upsets this balanceby eliminating the use of antitrust remedies to

225 MCI Communications Corp. v. AT&T, 708 F.2d at 1133-34.

226 Goldwasser II, 222 F.3d at 401.227 Letter from F. James Sensenbrenner, Jr., House Judi-

ciary Committee Chairman, to Dennis Hastert, Speaker ofthe U.S. House of Representatives 6 (May 1, 2001) [hereinaf-ter Letter from Sensenbrenner] (on file with the author)("Given the Justice Department's unique expertise in com-petitive matters, Congress expressly provided within §271that the Department would review RBOC compliance withthe market-opening provisions of the Act and that the Fed-eral Communications Commission would give the Depart-ment's analysis substantial weight in making its decision with

constrain behavior that may be related to the mar-ket-opening provisions of the Telecom Act but areso anticompetitive as to amount to a harm of thesort traditionally governed by antitrust. In doingso, Goldwasser only encourages the monopoly Bellcompanies to continue behaving as monopolistsso as to be protected from the reach of the anti-trust laws. Goldwasser disturbs almost 50 years ofestablished antitrust jurisdiction and jurispru-dence, leaving the existing telecommunicationsmarkets fraught with regulatory uncertainty. 228 Inorder to achieve the Sherman Act's and theTelecom Act's goals of competitive marketplaces,the procedures set forth in the Telecom Act mustbe used in tandem with the remedies availableunder the antitrust laws. Because of the courts' re-fusal to consider these principles together, Con-gress must clarify its intention that antitrust lawsapply to those fact situations where the Bell com-pany abuses its monopoly power to thwart compe-tition. House Judiciary Committee Chairman Sen-senbrenner explained the need for such a Gold-wasser remedy:

At a minimum, we must reverse the Seventh Circuit'srecent decision in the Goldwasser case. That decisiondirectly contradicts the clear congressional intent thatthe antitrust laws should continue in force in this indus-try. Goldwasser simply reads the antitrust savings clauseout of the law, and it must be corrected ... This sectorof our economy achieved its current vibrancy becauseof the application of the antitrust laws. Only throughthe continued application of the antitrust expertise ofthis Committee will that free market vibrancy con-tinue.

2 2 9

Specifically, Congress must enact legislation tostop the domino train of Goldwasser in its tracks bydefeating the Goldwasser court's assumption ofmutual exclusivity of the Telecom Act and the an-titrust laws. During the 1 0 7Th Congress, Congress-man Chris Cannon, along with House JudiciaryCommittee Ranking Member John Conyers, intro-duced H.R. 1698, the "American Broadband

respect to an RBOC application to provide long distance ser-vice); see also 47 U.S.C. §271 (d) (2) (A).

228 See generally, Letter from Sensenbrenner, supra note

227, at 2-5 (discussing the historical precedent for antitrustoversight).

229 Hearing on H.R 1698, the "America Broadband Competi-

tion Act of 2001," and H.R 1697, the "Broadband Competitionand Incentives Act of 2001, "Before the House Comm. on the Judici-aty, 107th Cong. 8 (2001) (statement of Rep. F. James Sen-senbrenner, Chairman, House Judiciary Comm.), available athttp://www.house.gov/judiciary/sensenbrenner052201.htm.

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Competition Act of 2001" (Cannon-Conyersbill) .230 This bill would resolve the regulatory con-fusion created by Goldwasser by ensuring "that theantitrust laws can be used against the Bell Compa-nies if they fail to comply with the law .... thatcompetitors can interconnect with the Bell Com-pany network, and [promote] the development ofcompetitive local telecom markets." 2 3 Specifi-cally, Title I of the bill would clarify that antitrustlaws apply to violations of requirements imposedby the Telecom Act and not preempted by theTelecom Act.2 32 In addition, Title II of the billwould create mandatory alternative dispute reso-lution processes to resolve efficiently any disputesarising under local interconnection agree-ments. 23 3 This bill would not drastically rewriteexisting antitrust law or current telecommunica-tions policy. Rather, the Cannon-Conyers billwould "simply sharpen the] relation between anti-trust law and Act, resulting in 'preservation ofcompetition in our industry' ,,.234

Opponents of the Cannon-Conyers bill arguethat it would "scrap years of antitrust jurispru-dence" and "reverse Congress's judgment fiveyears ago to deregulate the telecommunicationsindustry, promote competition and empoweragencies, rather than antitrust courts."2 3 5 Theybase their arguments on three general proposi-tions.

First, they contend that the bill is unnecessarybecause the Seventh Circuit court in Goldwasserdid not explicitly recognize any implied antitrustimmunity for ILECs under the Telecom Act. Theycite to the majority decision:

Our principle holding is thus not that the Telecom Actconfers implied immunity on behavior that would oth-erwise violate the antitrust law... It is that the TelecomAct imposes duties on the ILECs that are not found inthe antitrust laws. Those duties do not conflict with theantitrust laws either; they are simply more specific andfar-reaching obligations that Congress believed would

230 H.R. 1698, 107th Cong. (2001).231 Letter from John Windhausen,Jr., President, Associa-

tion for Local Telecommunications Services, to House Judici-ary Committee Chairman F.James Sensenbrenner,Jr. 1 (May17, 2001) (on file with author).

232 H.R. 1698, supra note 231.233 Id.234 Sensenbrenner Sees More Information Needed on Data Bills,

WARREN'S CABLE REcULATION MONITOR, May 28, 2001 (state-ment ofJeffrey Blumenfeld); see also Hearing on H.R. 1698, the"America Broadband Competition Act of 2001, "and H. 1697, the"Broadband Competition and Incentives Act of 2001," Before theHouse Comm. on the Judiciary, 107th Cong. 8 (2001) (statementof Jeffrey Blumenfeld).

accelerate the development of competitive markets. 2 3 6

In actuality, despite the majority's recognitionof the important role of the antitrust savingsclause, the Goldwasser court also suggested thatcompetitors may never assert antitrust suitsagainst monopoly carriers who maintain controlof their local networks in manners that stifle com-petition. Thus, competitive carriers are effectivelydenied the opportunity to pursue antitrust reme-dies when the incumbent monopoly carriers havefailed to comply with the requirements of theTelecom Act because, under a Goldwasser analysis,"the Telecom Act is more specific legislation thatmust take precedence over the general antitrustlaws." 23 7 Furthermore, specifying that "back-ground antitrust laws can move to the fore" onlyafter the Commission finds "that local marketshave ... become sufficiently competitive that thetransitory regulatory regime can be dismantled,"the Goldwasser court erases any role for antitrustlaws until markets have become sufficiently com-petitive and ignores the role that antitrust laws aresupposed to play in helping to achieve competi-tive markets in the first place.238 The Cannon-Conyers proposal would stop the dominos of Gold-wasser by clarifying that the antitrust laws are notpreempted by requirements imposed by theTelecom Act, thereby preserving the availability ofantitrust remedies.2 39

Second, opponents argue that the Cannon-Conyers bill will only encourage a hodgepodge oflitigation thereby actually harming competi-tion. 2411 They believe that a Goldwasser remedy willonly encourage competitive carriers to avoidagency action and instead take the antitrustroute.24' The expediting mechanisms set forth inthe Cannon-Conyers bill however, would help tominimize the number of potential lawsuits bymaking region-wide alternate dispute resolution

235 Sensenbrenner Sees More Information Needed on Data Bills,WARREN'S CABLE REG. MONITOR, May 28, 2001 (statement ofWilliam Barr, Verizon General Counsel); see also Hearing onH. 1698, the "America Broadband Competition Act of 2001, "andH.R. 1697, the "Broadband Competition and Incentives Act of2001," Before the House Comm. on the Judiciary, 107th Cong. 8(2001) (statement of William P. Barr) [hereinafter Barr state-ment].

236 Goldwasser II, 222 F.3d at 401.237 Id.238 Id. at 401-02.239 H.R. 1698, supra note 231.240 See generally Barr statement, supra note 236.241 Id.

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processes available. 242 The availability of alterna-tive dispute resolution processes would thereforeactually decrease the overall amount of lawsuitsultimately initiated by providing an alternate ave-nue for the enforcement of disputes arising underthe interconnection agreement negotiation pro-cess.

Opponents of the legislation also argue that theCommission's procedures enable quick resolutionof such dusputes and that allowing such an alter-nate path would result in delay and uncer-tainty.24 3 In actuality, "over the last few years, theFCC has promised consumers choice and compe-tition in broadband services, but nothing that itdid was enough for many DSL competitors to sur-vive against dominant regional Bell telecommuni-cations powerhouses." 244 The lack of FCC en-forcement has therefore created a challengingtelecommunications landscape for competitorshoping to break into the local exchange market.The Cannon-Conyers bill, however, would pro-vide for stronger, quicker enforcement mecha-nisms through the institution of a time clock onthe alternate dispute resolution process so as toprevent the RBOCs from litigating and appealingtheir competitors into extinction .245

V. CONCLUSION

The competitive telecommunications industryis at a critical juncture. Hundreds of new start-upcompanies invested over $56 billion in deployinginnovative technologies and have created almost100,000 new jobs. The Goldwasser decision, how-ever, threatens to undermine these critical invest-ments and to stem the tide of innovation andcompetition. Perhaps anticipating such a chal-lenge, the drafters of the Telecom Act included aspecific antitrust savings clause and a general sav-ings clause preserving the applicability of all Fed-

242 H.R. 1698, supra note 231.243 See generally Barr statement, supra note 236.244 BROADBANDINFO.COM, Bell DSL Rates Rise, Cable Likely

to Benefit, at http://www/broadbandinfo.com/news-print.asp?ContentD=2147432508 (last visited Nov. 15, 2001).

245 H.R. 1698, supra note 231.246 AT&T Corp. v. Iowa Utilities Bd., 525 U.S. 366, 397

(1999).247 However, in a recent decision, Covad Communs. Co. v.

BellSouth Corp., 2002 U.S. App. LEXIS 15486 (11th Cir. 2002),the U.S. I Ith Circuit Court of Appeals distinguished Gold-wasser in part and rejected it in part, stating:

..we cannot agree with Goldwasser to the extent that it isread to say that a Sherman Act antitrust claim cannot be

eral law, both of which were crafted using stan-dard savings clause statutory language. Then, toclarify Congress' intent in including these twoprovisions and to eliminate any confusion as tothe continued function of the antitrust laws,prominent House and Senate members and Presi-dent Clinton issued explanatory statementsdescribing the exact role that antitrust laws wereto play in opening up the local market to competi-tion. Finally, so as not to clip the role of the DOJ,Congress even repealed the ability of the Commis-sion to immunize telecommunications mergersfrom antitrust scrutiny. Thus, while SupremeCourt Justice Scalia characterized the TelecomAct as "a model of ambiguity or indeed of self-con-tradiction," for the purposes of the determiningthe continued applicability of the antitrust laws,Congress drafted a model of clarity with its unam-biguous assertion of the role of antitrust laws inthe Telecom Act.246

Despite such a clear Congressional mandate,the Goldwasser court still effectively forecloses, theavailability of antitrust remedies. The Can-non-Conyers bill, or similar legislation based onthat bill, is therefore needed to stop the dominosof Goldwasser. Congress recognized that the part-nership of antitrust law and telecommunicationsregulation is crucial to the achievement of compe-tition in the local marketplace. Without both ofthese tools at their disposal, both the regulatorsand those that they have been appointed to pro-tect, the consumers, are at the mercy of the Bellmonopolies. The domino train started by Gold-wasser threatens to topple the progress made thusfar.24 7 Armed with the Goldwasser decision, theRBOCs will not hesitate to aggressively protecttheir monopoly in the local network, destroyingany progress already made and forever eliminat-ing the hope of a competitive local exchange mar-ket. Only Congress can stop the toppling effect of

brought as a matter of law on the basis of an allegationof anti-competitive conduct that happens to be 'inter-twined' with obligations established by the 1996 Act.

At the same time, we agree with Goldwasser that merelypleading violations of the 1996 Act alone will not sufficeto plead Sherman Act violations. Thus, a claim that a de-fendant failed to live up to its contractual obligationsunder an agreement made pursuant to the 1996 Act inand of itself will be insufficient to establish an antitrustviolation. However, if a plaintiff also pleads facts that, iftrue, tend to show an anticompetitive purpose to createor maintain a monopoly, then that plaintiff has pleadedan antitrust violation.

Id.

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Goldwasser by reaffirming the intent and the lan-guage of the Telecom Act that the antitrust lawsand telecommunications regulations and policiesthat complement each other must be used to-gether. Through the passage of the Cannon-Cony-ers bill or other similarly crafted legislation, Con-

gress can finish what it started back in 1890 withthe passage of the Sherman Act by bringing irre-versible competition to the monopoly-dominatedlocal telecommunications market. If Congressfails to do so, then the game will soon be over andcompetition will come toppling down.

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