A group of 13 associations and service providers led by CompTel/A...

The USTA in Oct. hosted a closed dinner with high-tech companies’ top executives in Washington to discuss a possible lobbying alliance and seek funding from the suppliers (CD Nov 3 p1). In a letter to Spitzer, competitors called for an investigation to determine whether the “joint $40 million effort to end competition laws and ‘raise prices’ at the state and federal levels” had “crossed the line of permissible activity by the monopolies.” They said such a “collusive” effort could violate state antitrust laws and damage the N.Y. telecom economy: “The companies that the Bells monopolies [had] apparently sought to pressure in the regard include Corning and Siemens, which are either headquartered or have a significant presence in New York.” Competitors said N.Y. antitrust law, under the Donnelly Act, which was patterned by the courts upon the federal Sherman Act, forbade any agreement among competitors to restrain competition: “In this regard, any agreement, implied or expressed, on the part of the Bell monopolies to ‘boycott’ or otherwise punish non-participating supplier companies, or any agreement involving market division or other competition- suppressing activity, would clearly run afoul of New York antitrust law.” Competitors also claimed the Bells’ invitation to suppliers, over whom they exerted “considerable power, would suggest the possibility of an implied boycott should these suppliers exercise their prerogative to decline participation, as we believe many suppliers will do… This campaign to leverage economic power through a collective effort ‘requesting’ uniform rebates suggests, at a minimum, the possibility of illegally collusive behavior.” A CompTel/Ascent Alliance spokeswoman said N.Y. was “a good place to go” with a request for investigation because, she said Spitzer had a “history of taking a strong initiative in issues that impact consumers.” USTA Senior Vp Thomas Amontree called the allegations “baseless” and “malicious.” “This was a meeting of public policy and nothing more,” he said. The Noerr-Pennington doctrine, as enunciated by the U.S. Supreme Court, allows competitors to work cooperatively on public policy matters. However, competitors argued the doctrine did “not allow competitors to hide behind a thin veil of public advocacy in order to engage in unlawful competitive behavior.” Amontree criticized the letter: “What you have here is a group of companies who are afraid of a real competition and consumer choice, not to mention the recipients of more than a billion dollars in corporate welfare, organizing in a desperate attempt to change the focus of today’s telecommunication debate because they know they can’t win on the substance.” The CompTel/Ascent Alliance spokeswoman didn’t say whether the alliance planned to send more letters to other state AGs, but said other groups had done so. For example, she said a coalition of Cal. telecom companies had asked state AG Bill Lockyer to investigate the Bells’ plans discussed at the Oct. meeting that they said could “harm competition in the state’s telecommunications market and cost California consumers and businesses hundreds of millions of dollars.” Also, 26 competitive carriers plus ALTS and CompTel earlier this year sent a letter to key congressional committees raising similar issues.