Harold H. Greene (1923-2000)
AT&T was under attack. The Justice Department had accused the company of unfair practices, and had filed suit under the Sherman Antitrust Act, charging AT&T as follows: “. . . the absence of effective competition has tended to defeat effective public regulation of rates charged subscribers for telephone service . . .” The year was 1949.
In 1956, after seven years of protracted negotiations, a Consent Decree was achieved, and the case went away. AT&T agreed to limit its manufacturing to telephone-type activities, and the Bell System operating companies would limit themselves to common carrier communications. AT&T was delighted. Frederick Kappel, president of Western Electric, (the Bell System’s manufacturing subsidiary) told a company meeting this decree “generally makes legal an integrated Bell System . . . .”
Fast Forward to 1974
The Justice Department was not satisfied, and again filed suit, charging anticompetitive behavior on the part of AT&T. The case was to be handled by the U.S. District Court for D.C. Specifically, Judge Joseph Waddy, an experienced judge who, at the time, was dying of cancer.
After Judge Waddy’s death, his cases were distributed on a random basis, and the suit between DOJ and AT&T went to Harold H. Greene. Ironically, this assignment was made on Judge Greene’s first day on the Federal Court’s bench. He had just been appointed to the job by President Jimmy Carter.
At this time the case was going through an elaborate discovery phase in which documents were gathered on both sides. Lots of documents! Four thousand pages of documents!
Within three months of being assigned to the case, Judge Greene issued a pretrial order that established strict schedules for both sides. He was determined to move the trial along.
Just who was this man who was acting so decisively in a trial that had already dragged on for half a dozen years?
Harold Herman Greene was born February 6, 1923, in Frankfurt, Germany. His family escaped from Nazi Germany in 1939, passing through Belgium, Spain, and Portugal. The family settled in the U.S. in 1943. One year later Harold Greene became an American citizen, and enlisted in the U.S. Army. He was assigned to Military Intelligence, and spent most of his two-year tour of duty in Allied-occupied Germany interrogating prisoners.
Upon discharge he returned to the U.S., married, and entered law school. After graduation he was admitted to practice before the bars of the District of Columbia, the State of Maryland, the U.S. Supreme Court, and the Military Court of Appeals.
As suggested above, the AT&T/DOJ suit was an on-again off-again process. But Judge Greene was determined to move it ahead, and set January 15, 1981, as the trial start date. There was a great surge of activity, and on January 1 attorneys for AT&T and the DOJ told Judge Greene that they had a “’concept”’ that might lead to a settlement. They asked for a trial postponement. Judge Greene said no, and the trial began.
On January 16, the attorneys again approached Greene, and this time he granted a recess to let the parties demonstrate that they could support a “concrete, detailed proposal for settlement.” But a few days later on February 23, the talks broke off without a settlement, and the trial resumed.
The Department of Justice rested its case five months later, in July 1981, and one month later the AT&T defense began. This defense was no small operation: a support center was set up at 499 South Capitol Street, where some 220 people were typing, photocopying, transporting, and generally handling all the logistics for this, one of the largest antitrust suits ever undertaken. A fleet of 11 vans and station wagons was used to transport the people, witnesses, attorneys, and staff members back and forth. As many as 300,000 documents were reproduced in a single 24-hour period.
The trial continued until January 4, 1982, when a terse announcement was issued by the Justice Department and AT&T saying that negotiations had been reopened. Then, on January 8, 1982, the news hit: AT&T had agreed to break up its $136.8 billion empire.
And where was Judge Greene on this momentous day? Ironically, he was taking a vacation in the Caribbean, and, in his own words, was absolutely the last party to the case to be informed. So, after an 11-month trial in which 1 billion pages of documents were submitted as evidence and the testimony of hundreds of witnesses were heard, Greene's official task was to approve the agreement. He admitted later that he had a twinge of regret that he never had the opportunity to write such a major antitrust opinion.
And so the trial ended. But the role played by Judge Harold Greene did not. The exact structure of the breakup of the Bell System came before him for approval. For instance, should the spun-off Bell Operating Companies continue as 21 individual companies? Or could they be re-formed into one large company? Greene decreed that both of these options were unacceptable - that something in between would be required to gain his approval. As a result the seven Regional Bell Operating Companies (RBOCs) emerged. (Bell Atlantic, NYNEX, BellSouth, Ameritech, Southwestern Bell, US West, and Pacific Telesis). The familiar Bell logo would be the sole property of the RBOCs, and Bell Labs would be controlled by the RBOCs.
AT&T (the parent company) would retain the long distance arm of the company, and the manufacturing facility. It would be allowed to get in any business desired (computer manufacture, for instance). In order to assure that rapid technological developments did not overtake or cause great harm, triennial reviews would be prepared and submitted to his court.
Judge Greene, at the conclusion of the trial, said, "I think, [divestiture] will accomplish what it's supposed to. I'm a great believer in the competitive system, and think that competition will bring us greater innovation and put American industry in information ahead of everyone."
One can't help but wonder what he would have said as regards the re-formation of the telecommunications industry, and particularly the Bell System today.
Judge Greene died January 29, 2000.