ABA ANTITRUST SECTION SECTION 2 COMMITTEE

1. ABA ANTITRUST SECTIONSECTION 2 COMMITTEE HOT TOPICS IN MONOPOLIZATION LAW AND POLICY Jeffrey S. Cashdan KING & SPALDING Atlanta, Georgia SPRING 2002

6. Federal Antitrust Law and Local Telecommunications Services The Next Supreme Court Antitrust Case?

7. The Basic Issue:May a Section 2 claim properly be based on alleged failures to comply with obligations that arise from the Telecommunications Act of 1996?

8. The 1996 Act • Imposes affirmative duties on ILECs to interconnect with other carriers and to comply with a series of obligations designed to facilitate entry by CLECs – E.g., provisioning copper loops to allow provision of high-speed Internet access using DSL technology • Contains express antitrust savings clause: “nothing in this Act . . . shall be construed to modify, impair, or supersede the applicability of any of the antitrust laws.”

9. GoldwasserGoldwasser v. Ameritech Corp., 222 F.3d 390 (7th Cir. 2000) • Authored by Judge Diane P. Wood • Failure to comply with the 1996 Act does not automatically establish a Section 2 violation • the 1996 Act “imposes duties on the ILECs that are not found in the antitrust laws” and thus antitrust claim “inextricably linked to claims under the 1996 Act” must be dismissed as a matter of law – Generally no duty on monopolist to affirmatively help a competitor • No implied preemption • Savings clause does not save this claim

10. Since Goldwasser • At least 9 district court decisions addressing this issue, with mixed results • No other Circuit Court of Appeals decision . . . yet

11. Covad v. BellSouth • Argued to Eleventh Circuit two weeks ago • Squarely raises Goldwasser issue, among other things • DOJ/FCC submitted amicus curiae brief in support of plaintiff/appellee Covad

12. DOJ/FCC Amicus brief in Covad v. BellSouth (12/17/2001) • No implied immunity/preemption • “It is not true that . . . an incumbent monopoly provider of local telecommunications services cannot, as a matter of law, violate the antitrust laws by refusing to provide rivals access to its network on reasonable terms.” • “Alleged failures to meet the 1996 Act’s affirmative obligations . . . do not in themselves give rise to Sherman Act liability.” • “At the same time, valid claims under the Sherman Act must not be dismissed on the ground that the facts supporting them are ‘related to’ or ‘intertwined with’ 1996 Act obligations.”

13. DOJ/FCC Amicus brief in Covad v. BellSouth (12/17/2001) • DOJ/FCC “take no position on whether Covad’s particular complaint sufficiently alleges a violation of Section 2 of the Sherman Act.” • DOJ/FCC note, however, that “many of the detailed factual allegations in the complaint involve staples of 1996 Act controversy that have not been the basis of liability in antitrust cases.” – Compare with Intermedia amicus brief

14. In addition to the “Goldwasser” issue, substantial antitrust issues remain to be litigated in various actions challenging ILEC conduct in high-speed Internet access markets

15. For example, even assuming “essential facility” doctrine applies, must determine: • Essential for competition or plaintiff competitor?

16. Internet ISPs ************** Satellite Company Telephone Company Switching Office Cable Company ***** Satellite Dish

17. For example, even assuming “essential facility” doctrine applies, must determine: • Essential for competition or plaintiff competitor? • Is there a denial of access where defendant ILEC merely delays full compliance with access requirements imposed by 1996 Act?

18. Does Section 271 approval change everything?

19. ABA ANTITRUST SECTIONSECTION 2 COMMITTEE HOT TOPICS IN MONOPOLIZATION LAW AND POLICY Jeffrey S. Cashdan KING & SPALDING Atlanta, Georgia SPRING 2002