Text: H.R.5096 — 102nd Congress (1991-1992)All Information (Except Text)

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Union Calendar No. 487
102d CONGRESS
2d Session
H. R. 5096
[Report No. 102-850]
A BILL
To supersede the Modification of Final Judgment entered August 24, 1982,
in the antitrust action styled U.S. v. Western Electric, Civil Action
No. 82-0192, United States District Court for the District of Columbia;
and for other purposes.
August 12, 1992
Reported with an amendment, committed to the Committee of the Whole House
on the State of the Union, and ordered to be printed
HR 5096 RH
Union Calendar No. 487
102d CONGRESS
2d Session
 H. R. 5096
[Report No. 102-850]
To supersede the Modification of Final Judgment entered August 24, 1982,
in the antitrust action styled U.S. v. Western Electric, Civil Action
No. 82-0192, United States District Court for the District of Columbia;
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
May 7, 1992
Mr. BROOKS introduced the following bill; which was referred to the Committee
on the Judiciary
August 12, 1992
Additional sponsors: Mr. BRYANT, Mr. SYNAR, Mr. STAGGERS, Mr. HUBBARD,
and Mr. JONES of North Carolina
August 12, 1992
Reported with an amendment, committed to the Committee of the Whole House
on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed
in italic]
[For text of introduced bill, see copy of bill as introduced on May 7, 1992]
A BILL
To supersede the Modification of Final Judgment entered August 24, 1982,
in the antitrust action styled U.S. v. Western Electric, Civil Action
No. 82-0192, United States District Court for the District of Columbia;
and for other purposes.
  Be it enacted by the Senate and House of Representatives of the United
  States of America in Congress assembled,
SECTION 1. SHORT TITLE.
  This Act may be cited as the `Antitrust Reform Act of 1992'.
SEC. 2. AUTHORIZATION FOR BELL OPERATING COMPANY MONOPOLY TO ENTER COMPETITIVE
LINES OF BUSINESS.
  (a) APPLICATION-
  (1) IN GENERAL- After the applicable date specified in paragraph (2), a
  Bell operating company may apply to the Attorney General for authorization,
  notwithstanding the Modification of Final Judgment--
  (A) to engage in research and development relating to telecommunications
  equipment or customer premises equipment,
  (B) to provide information services,
  (C) to manufacture or provide telecommunications equipment, or manufacture
  customer premises equipment, or
  (D) to provide interexchange telecommunications.
The application shall describe with particularity the nature and scope of
each activity, and of each product market, service market, and geographic
market, for which authorization is sought.
  (2) APPLICABLE DATES- For purposes of paragraph (1), the applicable date
  after which a Bell operating company may apply for authorization shall be
  the date of the enactment of this Act.
  (3) PUBLICATION- Not later than 10 days after receiving an application made
  under paragraph (1), the Attorney General shall publish the application
  in the Federal Register.
  (b) DETERMINATION BY THE ATTORNEY GENERAL-
  (1) COMMENT PERIOD- Not later than 60 days after the application is
  published under subsection (a)(3), interested persons may submit comments
  to the Attorney General regarding the application.
  (2) DETERMINATION- (A) After the time for comment under paragraph (1) has
  expired, but not later than 120 days after the application is published
  under subsection (a)(3), the Attorney General shall issue a written
  determination with respect to granting the authorization for which the
  Bell operating company has applied.
  (B)(i) The Attorney General shall grant such authorization only to the
  extent that the Attorney General believes that such company would satisfy
  the proof requirements described in subsection (c)(2)(A)(i).
  (ii) The Attorney General shall deny the remainder of the requested
  authorization.
  (C) A determination granting any part of a requested authorization shall
  describe with particularity the nature and scope of each activity and of
  each product market, service market, and geographic market to which the
  authorization granted applies.
  (3) PUBLICATION- Not later than 10 days after issuing a determination under
  paragraph (2), the Attorney General shall publish the determination in the
  Federal Register, together with a description of the findings, studies,
  and analyses relied on for the determination.
  (4) FINALITY- The Attorney General's determination regarding an application
  made under this subsection shall be final unless a civil action with
  respect to such application is timely commenced under subsection (c)(1).
  (c) DE NOVO JUDICIAL DETERMINATION-
  (1) CIVIL ACTION- Not later than--
  (A) 60 days after a determination by the Attorney General is published
  under subsection (b)(3), or
  (B) 60 days after the expiration of the 130-day period beginning on the date
  the Attorney General receives an application made under subsection (a)(1),
whichever occurs earlier, the Bell operating company that applied to the
Attorney General under subsection (a), or any person who might be injured
in its business or property as a result of any determination regarding such
company's engaging in the activity described in such company's application,
may commence a civil action against the Attorney General, in any district
court of the United States in the district in which such company resides
or is found or has an agent, for a de novo determination regarding the
application. Such company and any such person shall also have the right to
intervene as a party in the civil action.
  (2) JUDGMENT- (A)(i) The court shall enter a judgment granting the
  authorization for which the Bell operating company applied to the
  Attorney General only to the extent that such company proves that there
  is no substantial possibility that such company or its affiliates could
  use monopoly power to impede competition in any relevant market for the
  activity to which the application relates.
  (ii) The court shall enter a judgment denying the remainder of the requested
  authorization.
  (B) A judgment granting any part of a requested authorization shall
  describe with particularity the nature and scope of each activity and of
  each product market, service market, and geographic market to which the
  authorization granted applies.
  (3) STAY- A judgment entered under paragraph (2) shall be stayed until
  the time for all appeals with respect to such judgment has expired.
  (d) SPECIAL APPLICABLE DATE- For purposes of subsection (a)(1),
  the applicable date for which a Bell operating company may apply for
  authorization with respect to providing interexchange telecommunications,
  or an information service relating to an alarm monitoring service, shall
  be 5 years after the date of the enactment of this Act.
SEC. 3. AUTHORIZATION AS PREREQUISITE.
  (a) PREREQUISITE- Until a Bell operating company is so authorized in
  accordance with section 2, it shall be unlawful for such company, directly
  or through an affiliated enterprise, to engage in an activity described
  in section 2(a)(1).
  (b) EXCEPTION FOR PREVIOUSLY AUTHORIZED ACTIVITIES- Subsection (a) shall
  not prohibit a Bell operating company from engaging--
  (1) in any activity to the extent authorized by an order entered by the
  United States District Court for the District of Columbia pursuant to
  section VIII(C) of the Modification of Final Judgment, if--
  (A) such order was entered on or before the date of the enactment of this
  Act, or
  (B) a request for such authorization was pending before such court on the
  date of the enactment of this Act,
  (2) in research and development in which any such company was lawfully
  engaged at any time in the period beginning on January 1, 1984, and ending
  on the date of the enactment of this Act, or
  (3) in providing a specific information service (other than an information
  service relating to an alarm monitoring service) in a particular geographic
  market to the extent such company was lawfully engaged in providing such
  service to customers in such market at any time in the period beginning
  on October 7, 1991, and ending 60 days before the date of the enactment
  of this Act.
SEC. 4. PROHIBITIONS.
  (a) ANTICOMPETITIVE DISCRIMINATION- A Bell operating company with monopoly
  power in any exchange service market that is engaged (directly or through
  an affiliated enterprise) in an activity described in section 2(a)(1) shall
  not discriminate, in any relevant market, between itself or an affiliated
  enterprise and any other person, or between any two such other persons,
  with respect to any product or service related to the provision or use
  of a telecommunications service if the effect of such discrimination may
  be to substantially lessen competition, or to tend to create a monopoly,
  in any line of commerce.
  (b) ANTICOMPETITIVE CROSS-SUBSIDIES- A Bell operating company with monopoly
  power in any exchange service market shall not use (directly or indirectly)
  proceeds obtained from providing exchange service in such market to
  subsidize, in any relevant market, an activity described in section 2(a)(1).
  (c) ANTICOMPETITIVE CONCENTRATION AMONG BELL OPERATING COMPANIES- (1) Except
  as provided in paragraph (2), a Bell operating company with monopoly power
  in any exchange service market shall not become an affiliated enterprise of,
  or acquire (directly or indirectly) any exchange service assets of, another
  Bell operating company if the effect of such affiliation or acquisition may
  be to substantially lessen competition, or to tend to create a monopoly,
  in any line of commerce.
  (2) Paragraph (1) shall not prohibit any acquisition by a Bell operating
  company from another Bell operating company if the 2 companies are affiliates
  of each other on the date of such acquisition and were affiliates of each
  other on the date of the enactment of this Act.
  (d) ANTICOMPETITIVE JOINT ACTIVITY AMONG BELL OPERATING COMPANIES- (1)
  Except as provided in paragraph (2), it shall be unlawful for a Bell
  operating company with monopoly power in any exchange service market to
  engage jointly (directly or through an affiliated enterprise) with another
  Bell operating company, in any relevant market, in an activity described
  in section 2(a)(1) in restraint of trade.
  (2) EXCEPTIONS- Paragraph (1) shall not prohibit Bell operating companies
  from jointly engaging in an activity--
  (A) at Bell Communications Research (commonly known as `Bellcore') if such
  companies were lawfully engaging in such activity at Bell Communications
  Research at any time in the period beginning on January 1, 1984, and ending
  on the date of the enactment of this Act,
  (B) if such companies are affiliates of each other while jointly engaging
  in such activity and were affiliates of each other on the date of the
  enactment of this Act, or
  (C) if such companies were lawfully engaging jointly in such activity on
  the date of the enactment of this Act.
SEC. 5. COMPLIANCE.
  (a) DUTY TO ADVISE CERTAIN MANAGEMENT EMPLOYEES OF OBLIGATIONS UNDER ACT-
  Each Bell operating company shall advise, in writing, each of its officers
  and other management personnel with significant responsibility for matters
  addressed in this Act, of the requirements of this Act, and that violations
  of this Act may result in criminal liability.
  (b) CERTIFICATION OF COMPLIANCE- Not later than 30 days after the end of
  each calendar year, the chief executive officer of (or another officer
  responsible for the operation of) each Bell operating company that is not
  (directly or indirectly) owned or controlled by another Bell operating
  company shall certify in writing to the Attorney General whether such company
  and its affiliates have complied throughout such year with sections 3 and
  4 and with subsection (a).
SEC. 6. ENFORCEMENT.
  (a) EQUITABLE POWERS OF UNITED STATES ATTORNEYS- It shall be the duty of
  the several United States attorneys, under the direction of the Attorney
  General, to institute proceedings in equity in their respective districts
  to prevent and restrain violations of this Act.
  (b) CRIMINAL LIABILITY- Whoever knowingly engages or knowingly attempts
  to engage in an activity that is prohibited by section 3, 4, or 5 shall
  be guilty of a felony, and on conviction thereof, shall be punished to
  the same extent as a person is punished upon conviction of a violation of
  section 1 of the Sherman Act (15 U.S.C. 1).
  (c) PRIVATE RIGHT OF ACTION- Any person who is injured in its business or
  property by reason of a violation of this Act--
  (1) may bring a civil action in any district court of the United States in
  the district in which the defendant resides or is found or has an agent,
  without respect to the amount in controversy, and
  (2) shall recover threefold the damages sustained, and the cost of suit
  (including a reasonable attorney's fee).
The court may award under this section, pursuant to a motion by such person
promptly made, simple interest on actual damages for the period beginning on
the date of service of such person's pleading setting forth a claim under this
Act and ending on the date of judgment, or for any shorter period therein,
if the court finds that the award of such interest for such period is just
in the circumstances.
  (d) PRIVATE INJUNCTIVE RELIEF- Any person shall be entitled to sue for
  and have injunctive relief, in any court of the United States having
  jurisdiction over the parties, against threatened loss or damage by a
  violation of this Act, when and under the same conditions and principles
  as injunctive relief is available under section 16 of the Clayton Act
  (15 U.S.C. 26). In any action under this subsection in which the plaintiff
  substantially prevails, the court shall award the cost of suit, including
  a reasonable attorney's fee, to such plaintiff.
  (e) JURISDICTION- (1) The courts of the United States shall have exclusive
  jurisdiction to make determinations with respect to a duty, claim, or
  right arising under this Act, other than a determination by the Attorney
  General under section 2(b)(2).
  (2) No action commenced to assert or enforce a duty, claim, or right
  arising under this Act shall be stayed pending any such determination by
  the Attorney General.
  (f) SUBPOENAS- In an action commenced under this Act, a subpoena requiring
  the attendance of a witness at a hearing or a trial may be served at any
  place within the United States.
SEC. 7. DEFINITIONS.
  For purposes of this Act:
  (1) AFFILIATE- The term `affiliate' means a person that (directly or
  indirectly) owns or controls, is owned or controlled by, or is under common
  ownership or control with, another person.  For purposes of this paragraph,
  to own refers to owning an equity interest (or the equivalent thereof)
  of more than 50 percent.
  (2) AFFILIATED ENTERPRISE- The term `affiliated enterprise' means, with
  respect to a Bell operating company, a person--
  (A) that such company or its affiliate (directly or indirectly) owns or
  controls, is owned or controlled by, or is under common ownership with,
  to any extent whatsoever, or
  (B) in whose gross revenues such company or its affiliate has any direct
  or indirect financial or proprietary interest, through a revenue sharing
  arrangement, royalty arrangement, or otherwise.
  (3) ANTITRUST LAWS- The term `antitrust laws' has the meaning given it in
  subsection (a) of the first section of the Clayton Act (15 U.S.C. 12(a)),
  except that such term includes the Act of June 19, 1936 (49 Stat. 1526; 15
  U.S.C. 13 et seq.), commonly known as the Robinson Patman Act, and section
  5 of the Federal Trade Commission Act (15 U.S.C. 45) to the extent that
  such section 5 applies to monopolies, attempts to monopolize, and unlawful
  restraints of trade.
  (4) BELL OPERATING COMPANY- The term `Bell operating company' means--
  (A) Bell Telephone Company of Nevada, Illinois Bell Telephone Company,
  Indiana Bell Telephone Company, Incorporated, Michigan Bell Telephone
  Company, New England Telephone and Telegraph Company, New Jersey Bell
  Telephone Company, New York Telephone Company, US West Communications
  Company, South Central Bell Telephone Company, Southern Bell Telephone and
  Telegraph Company, Southwestern Bell Telephone Company, The Bell Telephone
  Company of Pennsylvania, The Chesapeake and Potomac Telephone Company,
  The Chesapeake and Potomac Telephone Company of Maryland, The Chesapeake
  and Potomac Telephone Company of Virginia, The Chesapeake and Potomac
  Telephone Company of West Virginia, The Diamond State Telephone Company,
  The Ohio Bell Telephone Company, The Pacific Telephone and Telegraph Company,
  or Wisconsin Telephone Company,
  (B) any successor or assign of any such company, or
  (C) any affiliate of any person described in subparagraph (A) or (B).
  (5) CUSTOMER PREMISES EQUIPMENT- The term  `customer premises equipment'
  means equipment employed on the premises of a person (other than a person
  engaged in the business of providing a telecommunications service) to
  originate, route, or terminate telecommunications, and includes software
  relating to such equipment.
  (6) ELECTRONIC PUBLISHING- The term `electronic publishing' means
  the provision via telecommunications, by a Bell operating company or
  affiliated enterprise to a person other than an affiliate of such company,
  of information--
  (A) which such company or affiliated enterprise has, or has caused to be,
  originated, authored, compiled, collected, or edited, or
  (B) in which such company or affiliated enterprise has a direct or indirect
  financial or proprietary interest.
  (7) EXCHANGE AREA- The term `exchange area' means a contiguous geographic
  area established by a Bell operating company such that no exchange area
  includes points within more than 1 standard metropolitan statistical area,
  consolidated statistical area, or State, except as expressly permitted
  under the Modification of Final Judgment before the date of the enactment
  of this Act.
  (8) EXCHANGE ACCESS- The term `exchange access' means exchange services
  provided for the purpose of originating or terminating interexchange
  telecommunications.
  (9) EXCHANGE SERVICE- The term `exchange service' means a telecommunications
  service provided within an exchange area.
  (10) INFORMATION- The term `information' means knowledge or intelligence
  represented by any form of writing, signs, signals, pictures, sounds,
  or other symbols.
  (11) INFORMATION ACCESS- The term `information access' means specialized
  exchange services provided by a Bell operating company for the purpose
  of originating, terminating, transmitting, forwarding, or routing
  telecommunications to or from a provider of information services.
  (12) INFORMATION SERVICE- The term  `information service' means the
  offering of a capability for generating, acquiring, storing, transforming,
  processing, retrieving, utilizing, or making available information via
  telecommunications, and includes electronic publishing, but does not include
  the use of any such capability to engage in the business of providing an
  exchange service.
  (13) INTEREXCHANGE TELECOMMUNICATIONS- The term `interexchange
  telecommunications' means telecommunications between a point located in
  an exchange area and a point located outside such exchange area.
  (14) MODIFICATION OF FINAL JUDGMENT- The term `Modification of Final
  Judgment' means the order entered August 24, 1982, in the antitrust action
  styled U.S. v. Western Electric, Civil Action No. 82-0192, in the United
  States District Court for the District of Columbia, and includes any judgment
  or order with respect to such action entered on or after August 24, 1982.
  (15) PERSON- The term `person' has the meaning given it in subsection (a)
  of the first section of the Clayton Act (15 U.S.C. 12(a)).
  (16) RESEARCH AND DEVELOPMENT- The term `research and development' means--
  (A) theoretical analysis, experimentation, or systematic study of phenomena
  or observable facts,
  (B) development or testing of basic engineering techniques,
  (C) extension of investigative findings or theory of a scientific or
  technical nature into practical application for experimental or demonstration
  purposes, but does not include production or testing of models or prototypes,
  (D) collection or analysis of research information,
  (E) establishment or operation of facilities for conducting any activity
  included under subparagraph (A), (B), (C), or (D), or
  (F) prosecution of applications for patents, or the granting of licenses,
  for the results of any such activity.
  (17) TELECOMMUNICATIONS- The term `telecommunications' means the transmission
  of information between points by electromagnetic means.
  (18) TELECOMMUNICATIONS EQUIPMENT- The term `telecommunications equipment'
  means equipment, other than customer premises equipment, used to provide a
  telecommunications service, and includes software relating to such equipment.
  (19) TELECOMMUNICATIONS SERVICE- The term  `telecommunications service' means
  the offering for hire of transmission facilities or of telecommunications
  by means of such facilities.
  (20) TRANSMISSION FACILITIES- The term  `transmission facilities' means
  equipment (including wire, cable, microwave, satellite, and fiber-optics)
  that transmits information by electromagnetic means or that directly
  supports such transmission, but does not include customer premises equipment.
SEC. 8. RELATIONSHIP TO OTHER LAWS.
  (a) MODIFICATION OF FINAL JUDGMENT- This Act shall supersede the Modification
  of Final Judgment, except that this Act shall not affect--
  (1) section I of the Modification of Final Judgment, relating to AT&T
  reorganization,
  (2) section II(A) (including Appendix B) and II(B) of the Modification of
  Final Judgment, relating to equal access and nondiscrimination,
  (3) section IV(F) and IV(I) of the Modification of Final Judgment, with
  respect to the requirements included in the definitions of `exchange access'
  and `information access',
  (4) section VIII(B) of the Modification of Final Judgment, relating to
  printed advertising directories,
  (5) section VIII(E) of the Modification of Final Judgment, relating to
  notice to customers of AT&T,
  (6) section VIII(F) of the Modification of Final Judgment, relating to
  less than equal exchange access,
  (7) section VIII(G) of the Modification of Final Judgment, relating to
  transfer of AT&T assets, including all exceptions granted thereunder before
  the date of the enactment of this Act,
  (8) with respect to the parts of the Modification of Final Judgment
  described in paragraphs (1) through (7)--
  (A) section III of the Modification of Final Judgment, relating to
  applicability,
  (B) section IV of the Modification of Final Judgment, relating to
  definitions,
  (C) section V of the Modification of Final Judgment, relating to compliance,
  (D) section VI of the Modification of Final Judgment, relating to visitorial
  provisions,
  (E) section VII of the Modification of Final Judgment, relating to retention
  of jurisdiction, and
  (F) section VIII(I) of the Modification of Final Judgment, relating to
  the court's sua sponte authority.
  (b) ANTITRUST LAWS- Nothing in this Act shall be construed to modify,
  impair, or supersede the applicability of any other antitrust law.
  (c) FEDERAL, STATE, AND LOCAL LAW- (1) Except as provided in paragraph (2),
  this Act shall not be construed to modify, impair, or supersede Federal,
  State, or local law other than law expressly referred to in this Act.
  (2) This Act shall supersede State and local law to the extent that such
  law would impair or prevent the operation of this Act.
  (d) CUMULATIVE PENALTY- Any penalty imposed, or relief granted, under this
  Act shall be in addition to, and not in lieu of, any penalty or relief
  authorized by any other law to be imposed with respect to conduct described
  in this Act.
SEC. 9. AMENDMENT TO DEFINITION OF ANTITRUST LAWS APPEARING IN THE CLAYTON ACT.
  Subsection (a) of the first section of the Clayton Act (15 U.S.C. 12(a)) is
  amended by inserting `the Antitrust Reform Act of 1992;' after `thirteen;'.
HR 5096 RH----2