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Southwestern Bell violated antitrust laws, jury says

Updated:
OKLAHOMA CITY (AP) -- An attorney for Southwestern Bell Telephone Co. says he anticipates the company will appeal a federal jury's finding that Bell violated state antitrust laws while competing with other phone companies.

After listening to five weeks of testimony, the jury on Monday ordered Bell to pay nine competitors more than $7.4 million in damages.

Bell attorneys said the company has done nothing more than compete vigorously to retain pay telephone customers.

"What tells you the market is competitive is how fast we're losing pay phones," attorney Rick Ford said. "Our pay phone revenues are going down like a rock."

Southwestern Bell had a legal monopoly on pay telephones within its Oklahoma service territory before deregulation in November 1996.

After deregulation, other pay telephone companies were allowed to compete.

Companies compete by offering business property owners commissions in exchange for the right to place pay telephones on their properties. Commissions are based on the amount of revenue each telephone produces.

Bell competitors showed jurors documents revealing that in the months leading up to deregulation, Bell officials conducted an organized "blitz" to persuade property owners to sign long-term, restrictive contracts that would allow Bell pay phones to remain long after deregulation.

Jonathan E. Miller, an attorney for the competing companies, told jurors that customers were threatened with pay phone removal if they did not sign up, and since competition was not yet allowed, property owners had little choice but to sign.

Attorney Robert Edinger, who represented the competitors, said that three years after deregulation, Bell continued to pay 10 percent or less commissions on 32 percent of its pay phones, while competitors were paying double that amount or more at numerous locations.

Witnesses testified that Bell technicians and contractors sometimes resorted to dirty tricks, cutting wires short and tearing out cement pads and protective guard posts to make it more difficult and expensive for competitors to install phones.

Southwestern Bell was accused of violating state law, but the case was tried in federal court because Bell's competitors also had accused the company of violating federal antitrust laws, which are more narrowly defined.
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