COURTING DISASTER

News that the Supreme Court is considering Trinko vs. Bell Atlantic — a case that, if decided in favor of the plaintiff, would allow consumers to sue RBOCs on antitrust grounds — should disturb just about everyone in this industry, not just Verizon Communications. Given society's litigious nature and anti-corporate bent, a jury evaluating antitrust laws as applied to the complexities of federal regulations and communications networks could award consumers damages far beyond any harm they suffered, and far beyond what the Bell companies could afford. Frankly, these lawsuits could be financially devastating to the Bells. Kaufman Bros. analyst Vik Grover likened the massive volume of lawsuits that could result to the hundreds of thousands of asbestos-related claims filed over the last three decades. A decision favoring the plaintiff could leave telcos on the hook for hundreds of millions of dollars. That sort of judgment could cripple the entire industry, extending its current capital spending slump and weak employment outlook years to come. This is not to say the Bells are without sin when it comes to the CLECs and monopolistic practices. It's arguable that the RBOCs did almost everything in their power to smother competition before it ever got started. But the remedy for such behavior shouldn't be lawsuits. It should be stiffer fines imposed by the FCC, which as this and other magazines have pointed out before, is operating under a ridiculously antiquated penalty system established in the 1930s. If people are looking for justice against the Bells they should take the path of regulatory changes, not lawsuits.