Suing AT&T

Another setback for Ma Bell

With some 40 antitrust lawsuits pending against it, the giant American Telephone and Telegraph Co. (assets: $125 billion) is fast becoming one of the nation's most familiar courtroom defendants. Charged by competitors with service delays and unfair pricing to drive out competition, Ma Bell has entered into several agreements and is currently appealing a $1.8 billion antitrust award to MCI Communications Corp., which successfully argued that A T & T stalled in supplying telephone hookups needed for MCI to operate a rival long-distance telephone network.

Last week in a New York City courtroom, AT&T was greeted with more bad news. A jury of five women and one man held that the company had unfairly driven Litton Industries out of the telephone equipment business, and awarded $92 million in damages to the California aerospace and electronics conglomerate. If the verdict survives legal challenges, the sum will automatically be tripled under federal antitrust laws to $276 million.

Trying to find at least one encouraging aspect to his company's latest courtroom setback, Edward Goldstein, assistant finance officer for A T & T, pointed out: "We believe the award of $92 million is unjustified, but it is a far cry from the $570 million that Litton had sought. We will appeal the verdict." At Litton's Beverly Hills headquarters, General Counsel Robert Lentz was less circumspect. Said he: "Certainly we are not unhappy. The verdict vindicates our position that the Bell System violated the antitrust laws." Even so, Litton is not expected to return to the rapidly evolving telephone equipment business.

In strictly legal terms, the Litton decision has no bearing on the biggest antitrust case of all against Ma Bell--the U.S. Government's suit to break up A T & T, in part by spinning off its equipment manufacturing division, Western Electric. But the adverse Litton decision may nonetheless make it politically more difficult for the Reagan Administration to drop the case, as both the Commerce Department and the Pentagon have urged. They maintain that the nation's economy and security require a strong AT&T.

President Reagan could order the Justice Department to drop its prosecution. But Reagan's antitrust chief, former Stanford Law Professor William Baxter, 51, has said publicly that he believes A T & T's network of phone lines should be separated from the company's other activities. Last week Justice Department officials conceded that there is plenty of pressure to drop the case but, insisted one, "the department's posture is still to litigate it to the eyeballs."

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