Monday, June 13, 2016
1980 :: June 13 :: MCI wins antitrust lawsuit against AT&T
MCI was an innovative long distance company that radicalized the telecommunications market. Started in the 1960s, the business plan was to use radio licenses to provide long distance service between Chicago and St. Louis. MCI's application to provide service was approved by the FCC in 1969. But AT&T and the BOCs didnt like this much, and refused to interconnect with MCI. MCI had difficulty negotiating interconnection with AT&T, hired special counsel skilled in negotiations, and brought the issue before the FCC. In 1973, AT&T threw a curveball by filing interconnection tarriffs in 49 state PUCs, transforming MCI's transaction costs from one interconnection agreement, to 49 different agreements in each jurisdiction. In 1974, AT&T disconnected MCI. Finally, frustrated, In 1974, MCI, along with the Department of Justice, filed an antitrust suit against AT&T. On June 13th, 1980, the Court ruled in favor of MCI, awarding MCI $1.8 billion in damages. Two years later, AT&T would negotiate with DOJ the resolution of their antitrust lawsuit, agreeing to the breakup of the Bell System.