SENSENBRENNER QUESTIONS DoJ ANTITRUST POSITION IN TRINKO CASE
In what probably won’t be the last telecom antitrust hearing this Congress, House Judiciary Committee Chmn. Sensenbrenner (R-Wis.) didn’t appear satisfied with the Justice Dept.’s actions in the Trinko v. Verizon case. At the same time, ranking Democrat Conyers (Mich.) wasn’t happy with Verizon’s or the DoJ’s response to his concerns about a recent meeting of Bells and equipment manufacturers that Conyers said could warrant a DoJ investigation.
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Sensenbrenner said another hearing was likely after the U.S. Supreme Court decided the Trinko case. He said if Trinko were overturned, a legislative response would be “swift… Everyone can rest assured that the antitrust laws will continue to apply to this industry.”
Sensenbrenner asked DoJ antitrust chief Hewitt Pate if driving up the costs of competitors should be viewed as anticompetitive behavior. Sensenbrenner said he never got a satisfactory answer. Pate said DoJ had argued that an incumbent’s denial of an essential facility to a rival constituent was a violation of the Sherman Antitrust Act only when the denial was “predatory or exclusionary… It must make business sense for the incumbent because it has the effect of injuring competition.” That would be a situation where an incumbent took a profit hit just to injure a competitor, Pate said.
But Sensenbrenner said he wanted to know why the “other side of the coin” wasn’t also an antitrust violation. If incumbents raised costs for competitors, why wasn’t that a violation? he asked. Pate said the DoJ’s position was consistent with court rulings and with its positions in other antitrust cases, including Microsoft and American Airlines.
A confrontation occurred after Verizon Deputy Gen. Counsel John Thorne told Conyers he hadn’t spoken with Verizon CEO Ivan Seidenberg about the controversial USTA plan to enlist telecom manufacturers in a lobbying campaign. “You know what that sounds like: a strategy for dumping the Telecom Act,” Conyers said. Thorne replied: “It sounds to me like an attempt by an industry under siege to get back on its feet.”
Thorne argued that the First Amendment protected companies that got together to lobby. Conyers agreed but said companies weren’t protected in coercing suppliers into a lobbying campaign. “Somebody’s coming close to the line,” he said. After the hearing, Conyers said he didn’t believe Justice would investigate USTA lobbying but said it should. He said he could send a letter to DoJ on the issue requesting a review. Thorne said he would be available to meet with Conyers on the issue.