Recent court rulings seem to indicate the Goldwasser ruling -- which the Bells have been using to address antitrust complaints filed against them -- may be losing steam.
Goldwasser vs. Ameritech is a consumer class action lawsuit filed in 1997. In Goldwasser, the court ruled the Bells are not subject to antitrust claims with regard to service they provide to competitors. Instead, such claims of anti-competitive behavior fall under jurisdiction of the FCC, which promulgated the regulations imposed under the Telecom Act that govern competitors' access to the Bells. In effect, this means the Telecom Act "trumps" the Sherman Antitrust Act, says Dan Berninger, managing director at Pulver.com.
But the rules of the game may be changing.
Late this summer Covad won its appeal in the 11th Circuit, U.S. Court of Appeals to pursue a complaint against BellSouth. The antitrust complaint initially had been dismissed by a lower court, which cited Goldwasser. The appeals court rejected that decision.
Just four days earlier CoreComm defeated SBC's motion for dismissal in Ohio District Court.
And in a mid-June ruling on Trinko vs. Bell Atlantic, a federal appeals court said consumers can sue their local telephone companies for antitrust violations.
"All these rulings started in the same way," says Berninger, who claims the Bells are guilty of the antitrust charges filed against them. Every time a company or consumer consortium makes an antitrust complaint, he says, the Bells would "map it to the Telecom Act." Recent rulings indicate "Goldwasser doesn't seem to have much weight anymore," Berninger says.
That's meaningful, says Berninger, because now it appears these complaints will be heard in court. "It means the cases proceed," he says. "The Bells want to dismiss these cases outright, and they failed at that. The problem this creates for the Bells is they are all guilty. Once [the complaints] get to trials and get to facts, the Bells will lose."
BellSouth now has "several options" following the appeals court ruling, says Joe Chandler, a spokesman for the Bell company. "It is possible we will ask for a rehearing in the 11th Circuit Appeals Court," he says.
"This is still at the motion to dismiss stage -- the very base part of this lawsuit," Chandler adds. "As the opinion from the court noted, the standard for a claim surviving a motion to dismiss is exceedingly low. The standard the court has is minimal. We fully expect to prevail."
