SBC Communications Challenges AT&T's Dominance in Telecommunications

Strategic Insights -

SBC Communications Inc. filed two motions in the U.S. District Court for the District of Columbia on April 4, 1995, seeking to modify the 1982 Modification of Final Judgment (MFJ) against AT&T. The MFJ had settled the government's antitrust case against AT&T, but SBC argues that AT&T is using the decree to stifle competition in telecommunications. SBC proposes changes to the waiver process, which would allow regional Bell companies to file requests directly with the Court, and remove AT&T's special status to oppose such requests. The company argues that AT&T's dominance in various markets, including long-distance, cellular, and PCS, is unfair and hinders competition.

Key Takeaways:

  • SBC Communications Inc. filed two motions in the U.S. District Court for the District of Columbia on April 4, 1995, to challenge AT&T's dominance in telecommunications.
  • SBC argues that AT&T is using the 1982 Modification of Final Judgment (MFJ) to stifle competition in various markets, including long-distance, cellular, and PCS.
  • AT&T holds 60% of the total interexchange market and an even higher percentage of the residential long-distance market.
  • SBC proposes changes to the waiver process, which would allow regional Bell companies to file requests directly with the Court, and remove AT&T's special status to oppose such requests.
  • SBC argues that AT&T's dominance in various markets is unfair and hinders competition, citing AT&T's opposition to at least 30 waiver requests.
  • The current waiver process, which was adopted by the court to speed up the process, has failed to deliver, with the average age of pending waiver requests before the Department of Justice being over two and a half years.
  • SBC Communications Inc. reported 1994 revenues of $11.6 billion.

Statistics:

  • AT&T holds 60% of the total interexchange market.
  • AT&T holds an even higher percentage of the residential long-distance market.
  • AT&T is the dominant manufacturer of central office switches and the largest domestic manufacturer of transmission equipment.
  • AT&T has opposed at least 30 waiver requests, including nearly all significant requests for waivers of the telecommunications equipment manufacturing and interexchange restrictions.
  • The average age of pending waiver requests before the Department of Justice is over two and a half years.
  • SBC Communications Inc. reported 1994 revenues of $11.6 billion.

Sources:

  • SBC Communications Inc., "SBC Communications Files Motions in U.S. District Court to Challenge AT&T's Dominance in Telecommunications"
  • James D. Ellis, SBC's senior executive vice president and general counsel, as quoted in the SBC Communications Inc. press release.