[Proposed] Final Judgment
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UNITED STATES DISTRICT COURT
WHEREAS, plaintiff, United States of America, filed its Complaint on July 13, 1995, AND WHEREAS, plaintiff and defendants, by their respective attorneys, have consented to the entry of this Final Judgment without trial or adjudication on any issue of fact or law, AND WHEREAS, defendants have further consented after any consummation as defined in the Stipulation entered into by defendants and the United States on July 13, 1995, to be bound by the provisions of this Final Judgment pending its approval by the Court, AND WHEREAS, plaintiff the United States believes that entry of this Final Judgment is necessary to protect competition in the United States telecommunications and enhanced telecommunications markets, THEREFORE, it is hereby ORDERED, ADJUDGED, and DECREED: This Court has jurisdiction of the subject matter of this action and of each of the parties consenting to this Final Judgment. The Complaint states a claim upon which relief may be granted against the defendants under Section 7 of the Clayton Act, 15 U.S.C. § 18, as amended. II Reporting and Disclosure Requirements A. Sprint or Joint Venture Co. shall not offer, supply, distribute, or otherwise provide in the United States any telecommunications or enhanced telecommunications service that makes use of telecommunications services provided by FT in France or between the United States and France, or DT in Germany or between the United States and Germany, unless the following information is disclosed in the United States by Sprint or Joint Venture Co., or such disclosure is expressly waived, in whole or in part, by plaintiff through written notice to defendants and the Court:
The obligations of Section II.A. shall not extend to the disclosure of intellectual property or other proprietary information of the defendants, FT or DT that has been maintained as confidential by its owner, except to the extent that it is of a type expressly required to be disclosed herein, or is necessary for United States international telecommunications providers to interconnect with the FT/DT PSTNs, or for United States international telecommunications providers to use FT's or DT's international telecommunications or enhanced telecommunications correspondent services. Restrictions on Sharing of Information Obtained by FT and DT B. Sprint and Joint Venture Co. shall not receive or seek to receive from FT or DT, or from any persons designated by FT or DT to sit on the Board of Directors of Sprint:
Further, Sprint and Joint Venture Co. may not employ any personnel who (i) are at the same time employed by FT or DT and have access to any of the types of information that Sprint and Joint Venture Co. are not permitted to receive from FT or DT under this Section II.B, or (ii) are employed by the Joint Venture or by Sprint, and have been employed by FT or DT within the preceding six months, and had received within that time any of the types of information that Sprint and Joint Venture Co. are not permitted to receive under this Section II.B. Ability of Competitors to Obtain Licenses and Authorizations for Entry C. Sprint and Joint Venture Co. shall not offer (directly or through FT or DT), and shall not provide facilities to FT or DT enabling FT or DT to offer, any particular international telecommunications or enhanced telecommunications service between the United States and France or Germany, unless:
This Section II.C shall operate separately for France and Germany. It shall not restrict Sprint or Joint Venture Co. from providing existing correspondent services to France or Germany pursuant to bilateral agreements with FT or DT that have also been made available to other United States international telecommunications providers. "License," for purposes of this Section II.C., means any form of authorization, whether or not formally characterized as a license, that must be obtained from a governmental body in order to offer a telecommunications or enhanced telecommunications service. Obligations while Phase I of this Final Judgment Is in Effect Prior to Authorization of Facilities-Based Competition in France and Germany Scope of Activities of the Joint Venture A. Joint Venture Co. and Sprint will not acquire an ownership interest in, or control over, (i) any facilities in France or Germany that are legally reserved to FT or DT, or (ii) any international half circuits terminating in France or Germany that are used for telecommunications service between the United States and France or the United States and Germany, except to the extent that, and in no greater than the aggregate quantity that, other providers unaffiliated with FT, DT, Sprint or Joint Venture Co. actually own and control such international half-circuits, or plaintiff and defendants agree that meaningful competition exists to such international half-circuits provided by FT or DT. "Control" for purposes of Section III.A and B shall not include publicly available leases or other publicly available uses of such facilities. B. Joint Venture Co. and Sprint will not acquire an ownership interest in, or control over, the Public Data Networks. C. Joint Venture Co. and Sprint may provide FT or DT Products and Services only pursuant to a sales agency or resale agreement, and provided that (i) such agreements are not exclusive, and (ii) other United States international telecommunications providers are able to obtain FT or DT Products and Services directly from FT or DT on a nondiscriminatory basis; provided, however, that such FT or DT Products and Services may be used by Joint Venture Co. and Sprint as inputs to their products and services to end users pursuant to the requirements of this Final Judgment. Conduct of the Joint Venture and Sprint
Persons that are "similarly situated" shall mean United States international telecommunications providers (including their subsidiaries and affiliates) that are generally comparable to Sprint and Joint Venture Co. with respect to the volume or type of FT or DT Products and Services purchased, acquired or accepted from FT and DT, provided that volume and type are relevant distinctions in establishing service conditions. If defendants seek to rebut a claim of discrimination by establishing the existence of a justification of costs, defendants shall have the burden of proof to establish such justification. Defendants shall make available to plaintiff all information that was available to them, whether possessed by them or obtained from FT or DT, in considering the relevance of such distinctions. E. Sprint shall not accept any correspondent telecommunications traffic from France or Germany, from FT or DT respectively, other than in a manner consistent with their Proportionate Return Commitment and the policies of the Federal Communications Commission concerning proportionate return. Sprint shall not accept or benefit from any alteration in the methodology (including assignment of new services to proportionate return categories) by which FT or DT allocate proportionate return traffic among United States international telecommunications providers with whom they have operating agreements if inconsistent with the policies of the Federal Communications Commission with respect to Sprint, FT, and DT, or the change in methodology has the effect of substantially favoring Sprint with respect to all other United States international telecommunications providers, either in the value of traffic (if types of minutes with different accounting rates are pooled for purposes of calculating proportionate return) or volume. In order to implement these requirements:
F. In order to ensure that the activities of Joint Venture Co. and Sprint are not subsidized by FT and DT during Phase I of this Final Judgment:
G.
H. Sprint or Joint Venture Co. shall not offer, supply, distribute, or otherwise provide in the United States any telecommunications or enhanced telecommunications service that makes use of FT or DT Products and Services, if, with respect to such FT or DT Products and Services, (1) FT or DT have established any proprietary or nonstandardized interface or protocol used by Sprint and Joint Venture Co. to obtain access to such products or services, and (2) FT or DT no longer continue to provide on a basis consistent with previous operations, a non-proprietary or standardized interface or protocol used to obtain access to such FT or DT Products or Services. I. Sprint or Joint Venture Co. shall not offer, supply, distribute, or otherwise provide in the United States any data telecommunications or enhanced telecommunications service that makes use of the Public Data Networks to complete data telecommunications in France or Germany, unless the Public Data Networks that are based on the X.25 or any other protocol, continue to be available to all other United States international telecommunications providers on nondiscriminatory terms to complete data telecommunications between the United States and France and between the United States and Germany, and within France and Germany for traffic originating within the United States, France or Germany, using the X.75 standard protocol for interconnection between data networks, or any generally accepted standard network interconnection protocol that may modify or replace the X.75 standard. If these requirements are met, Joint Venture Co. and Sprint may also offer data telecommunications services other than those based on the X.25/X.75 protocols using the Public Data Networks. Applicability and Effect The provisions of this Final Judgment shall be binding upon defendants, their affiliates, subsidiaries, successors and assigns (except for any Sprint business that is subsequently spun-off or otherwise divested and in which neither FT nor DT have any ownership interest), officers, agents, servants, employees and attorneys. Defendants shall cooperate with the United States Department of Justice in ensuring that the provisions of this Final Judgment are carried out. Neither this Final Judgment nor any of its terms or provisions shall constitute any evidence against, an admission by, or an estoppel against the defendants. The effective date of this Final Judgment shall be the date upon which it is entered. Definitions For the purposes of this Final Judgment: A. "Affiliate" and "subsidiary" mean any entity in which a person has equity ownership, or managerial or operational control, directly or indirectly through one or more intermediaries, provided that these terms, when used in connection with Sprint do not include Joint Venture Co., Atlas, FT or DT; when used in connection with FT do not include Joint Venture Co., Sprint or DT but do include Atlas; when used in connection with DT do not include Joint Venture Co., Sprint, or FT but do include Atlas; and when used in connection with Joint Venture Co. do not include Sprint, Atlas, FT or DT (but do include all entities which Joint Venture Co. controls, or which are jointly controlled by Sprint, FT and DT). Atlas, FT and DT shall not be deemed to be persons in active concert or participation with Joint Venture Co. or Sprint for purposes of this Final Judgment. Affiliates and subsidiaries of Sprint and Joint Venture Co. that are not controlled by Sprint or Joint Venture Co. do not have substantive compliance obligations under Sections II and III of this Final Judgment. B. "Atlas" means a joint venture identified in an agreement entered into between FT and DT on December 15, 1994, as amended, formed, or to be formed, by FT and DT to provide certain telecommunications services in Europe, regardless of the name that entity may subsequently have, or the percentages of ownership of FT or DT or the services or geographic areas in which that joint venture may operate, and any subsidiary, affiliate, predecessor, successor or assign of that joint venture, or any other entity jointly owned by FT and DT and having substantially similar purposes. C. "Control" means, with respect to any entity's relationship to another entity, any of the following, unless another standard of control is specified in a provision of this Final Judgment:
Where more than one entity exercises joint control over an entity, each shall be deemed to have control. D. "Correspondent" means a bilaterally negotiated arrangement between a provider of telecommunications services in the United States and a provider of telecommunications services in France, or between a provider of telecommunications services in the United States and a provider of telecommunications services in Germany, by which each party undertakes to terminate in its country through its public switched network or its public data network traffic originated by the other party, for provision of an international telecommunications or such enhanced telecommunications service. A service managed by Joint Venture Co., and provided without correspondent relationships with any other provider, shall not be deemed to constitute a correspondent service. E. "Defendant" or "defendants" means Sprint and Joint Venture Co. F. "Disclose," for purposes of Sections II.A.1-7 and III.E, means disclosure to the United States Department of Justice Antitrust Division, which may further disclose such information to any United States international telecommunications provider that directly or through a subsidiary or affiliate (i) holds or has applied for a license from either the United States Federal Communications Commission or the French Direction Générale des Postes et Télécommunications ("DGPT"), or successors in responsibility to such agencies, to provide international telecommunications or enhanced telecommunications services between the United States and France, or actually provides telecommunications or enhanced telecommunications services between the United States and France, for services where no license is required, or (ii) holds or has applied for a license from either the United States Federal Communications Commission or the German Bundesministerium für Post und Telekommunication ("BMPT"), or successors in responsibility to such agencies, to provide international telecommunications services or enhanced telecommunications services between the United States and Germany, or actually provides telecommunications or enhanced telecommunications services between the United States and Germany, for services where no license is required. Disclosure by the Department of Justice to any provider described above shall be made only upon agreement by such provider, in the form prescribed in the Stipulation entered into by defendants and the United States on July 13, 1995, not to disclose any non-public information to any other person, apart from governmental authorities in the United States, France or Germany. Where Joint Venture Co. is required to disclose in Section II.A particular telecommunications services provided, this shall include disclosure of the identity of each of the services, and reasonable detail about each of the services to the extent not already published elsewhere, but shall not require disclosure of underlying facilities used to provide a particular service that is offered on a unitary basis, except to the extent necessary to identify the service and the means of interconnection with the service. G. "DT" means Deutsche Telekom A.G., and any entity controlled by DT, provided that DT does not include Joint Venture Co., FT, or Sprint, but does include Atlas. H. "Enhanced telecommunications service" means any telecommunications service that involves as an integral part of the service the provision of features or capabilities that are additional to the conveyance (including switching) of the information transmitted. Although enhanced telecommunications services use telecommunications services for conveyance, their additional features or capabilities do not lose their enhanced status as a result. I. "Facility" means: (i) any line, trunk, wire, cable, tube, pipe, satellite, earth station, antenna or other means that is directly used or designed or adapted for use in the conveyance, transmission, origination or reception of a telecommunications or enhanced telecommunications service; (ii) any switch, multiplexer or other equipment or apparatus that is directly used or designed or adapted for use in connection with the conveyance, transmission, origination, reception, switching, signaling, modulation, amplification, routing, collection, storage, forwarding, transformation, translation, conversion, delivery or other provision of any telecommunications or enhanced telecommunications service, and (iii) any structure, conduit, pole, or other thing in, on, by or from which any facility as described in (i) or (ii) is or may be installed, supported, carried or suspended. J. "France" means the Republic of France, excluding its overseas departments and territories for which traffic is reported separately to the Federal Communications Commission. K. "FT" means France Télécom, and any entity controlled by FT, provided that FT does not include Joint Venture Co., DT, or Sprint, but does include Atlas and Transpac. L. "FT or DT Products and Services" shall mean any of the following telecommunications or enhanced telecommunications services or facilities in France or Germany, or between the United States and France or the United States and Germany, provided by FT or DT, regardless of whether such services or facilities are considered to be reserved exclusively to FT or DT under the national law of France or Germany:
M. "Germany" means the Federal Republic of Germany. N. "Interconnection," "interconnect" and "interconnection agreement" mean interconnection underthe FT Schedule of Obligations ("Cahier des Charges") (or any subsequent or other condition governing interconnection with FT that may be imposed by government authorities in France), and under the Telecommunications Installation Act ("Fernmeldeanlagengesetz") (or any subsequent or other condition governing interconnection with DT that may be imposed by government authorities in Germany), or access to the FT or DT public switched telephone networks that may be obtained outside the terms of such legal obligations. O. "Joint Venture Co." means the entities referred to in the Joint Venture Agreement entered into by Sprint, FT and DT on June 22, 1995, as the GBN Parent Entity, the ROW Parent Entity, and the ROE Parent Entity (including the governing boards or bodies of such entities) to be formed in accordance with Sections 4.2, 5.2 and 6.2 of the Joint Venture Agreement, and each other entity to be formed pursuant to the terms of the Joint Venture Agreement (including the Global Venture Board, Global Venture Committee and Global Venture Office to be formed in accordance with Section 3.1-3.10 of the Joint Venture Agreement), regardless of the name under which these entities may subsequently do business, or any other entity jointly owned by Sprint, FT and DT and having among its purposes substantially the same purposes as described for the Joint Venture or any of these entities in the Joint Venture Agreement, and any predecessor (whether the predecessor is jointly owned by Sprint, FT and DT or separately owned by any one of them and any one of them formed to conduct the Joint Venture Co. business), successor, or assign of such entities, or any entity controlled by any of these entities. Atlas, FT, DT and Sprint shall not be deemed to be a Joint Venture Co. The individual members of the Global Venture Board, Global Venture Committee and Global Venture Office, are not personally defendants, but are responsible in their official capacities as members of such entities for ensuring compliance of Joint Venture Co. with this Final Judgment, and responding to requests for documents and information under Section VI, in the same manner as any officer of a defendant. P. "Phase I" means that period of time after the entry of this Final Judgment and before the conditions in Phase II have been met. Q. "Phase II" means that time that begins when the national governments of France and Germany have:
Unless otherwise noted in this Final Judgment, Phase II applies separately to France and Germany, and shall commence with respect to services and facilities between the United States and a country when the conditions are met for that country, even if they are not met in the other country. R. "Proportionate Return Commitment" means the commitment of each of FT and DT to transmit correspondent voice telecommunications services traffic to the United States, to licensed U.S. international telecommunications carriers holding operating agreements for such services with FT and DT, in the same proportions as the correspondent voice telecommunications traffic from the United States to France or Germany that FT and DT, respectively, receive from such U.S. carriers. If the Federal Communications Commission adopts proportionate return policies that are made specifically applicable to the relationship between Sprint, FT and DT and that conflict with this Proportionate Return Commitment, the Proportionate Return Commitment shall be modified to be consistent with such policies. S. "Public Data Network" means either or both of the public data network operated by Transpac in France and the public data network in Germany operated under the "Datex" designation (Datex-P, Datex-J, and the Datex-L service) as of the signing of the Stipulation to enter this Final Judgment, whether such networks are held by FT, DT, Atlas, or any subsidiary or affiliate of FT or DT now or in the future. T. "Sprint" means Sprint Corporation, and any entity controlled by Sprint. Sprint does not include Joint Venture Co., Atlas, FT, or DT, or any FT or DT employees who may serve on Sprint's Board of Directors. U. "Telecommunications service" means the conveyance, by electrical, magnetic, electromagnetic, electromechanical or electrochemical means (including fiber-optics), of information consisting of:
For these purposes "convey" and "conveyance" include transmission, switching, and receiving, and cognate expressions shall be construed accordingly. A telecommunications service includes all facilities used in providing such service, and the installation, maintenance, repair, adjustment, replacement and removal of any such facilities. A service that is considered a "telecommunications service" under this definition retains that status when it is used to provide an enhanced telecommunications service, or when used in combination with equipment, facilities or other services. V. "United States" means the fifty states, the District of Columbia, and all territories, dependencies, or possessions of the United States. W. "United States international telecommunications provider" means any person or entity actually providing international telecommunications services or enhanced telecommunications services to providers or users in the United States, and that is incorporated in the United States, or that is ultimately controlled by United States persons within the meaning of 16 C.F.R. § 801.1., including its subsidiaries and affiliates, or any provider of telecommunications services with which such a United States international telecommunications provider is affiliated. For purposes of this definition, an affiliate shall mean any entity in which a person or entity has a direct or indirect equity interest or whose equity is owned directly or indirectly by a person or entity in the amount of 10% or more. Visitorial and Compliance Provisions A. Sprint and Joint Venture Co. each agree to maintain sufficient records and documents to demonstrate compliance with the requirements of this Final Judgment. B. For the purposes of determining or securing compliance of defendants with this Final Judgment, duly authorized representatives of the plaintiff, upon written request of the Attorney General or the Assistant Attorney General in charge of the Antitrust Division, and on reasonable notice to the relevant defendant, shall have access without restraint or interference to Sprint and to Joint Venture Co. in the United States:
C. Joint Venture Co. consents to make available to duly authorized representatives of the plaintiff, for the purposes of determining whether defendants have complied with the requirements of this Final Judgment and to secure their compliance:
D. Upon the written request of the Attorney General or the Assistant Attorney General in charge of the Antitrust Division, a defendant shall submit written reports, under oath if requested, relating to any of the matters contained in this decree. E. No information or documents obtained by the means provided in this Section VI shall be divulged by the plaintiff to any person other than the United States Department of Justice, the Federal Communications Commission, and their employees, agents and contractors, except in the course of legal proceedings to which the United States is a party, or for the purpose of securing compliance with this decree, or for identifying to the DGPT or other appropriate French regulatory agencies conduct by defendants or FT that may violate French law or regulations or FT's license to operate its French public telecommunications system (but no documents received from defendants pursuant to this Section VI shall be disclosed to French authorities by the Department of Justice), or for identifying to the BMPT or other appropriate German regulatory agencies conduct by defendants or DT that may violate German law or regulations or DT's license to operate its German public telecommunications system (but no documents received from defendants pursuant to this Section VI shall be disclosed to German authorities by the Department of Justice), or as otherwise required by law. Prior to divulging any documents, interviews or sworn testimony obtained pursuant to this Section VI to the Federal Communications Commission, or any French or German regulatory agencies, plaintiff will obtain assurances that such materials are protected from disclosure to third parties to the extent permitted by law. Retention of Jurisdiction Jurisdiction is retained by this Court for the purposes of enabling any of the parties to this Final Judgment to apply to this Court at any time for such further orders or directions as may be necessary or appropriate to carry out or construe this decree, to modify or terminate any of its provisions, to enforce compliance, and to punish any violations of its provisions. Modification A. Any party to this Final Judgment may seek modification of its substantive terms and obligations and other parties to the Final Judgment shall have an opportunity to respond to such a motion. If the motion is contested by another party, it shall only be granted if the movant makes a clear showing that (i) a significant change in circumstances or significant new event subsequent to the entry of the Final Judgment requires modification of the Final Judgment to avoid substantial harm to competition or consumers in the United States, or to avoid substantial hardship to defendants, and (ii) the proposed modification is (a) in the public interest, (b) suitably tailored to the changed circumstances or new events and would not result in serious hardship to any defendant, and (c) consistent with the purposes of the antitrust laws of the United States and with the telecommunications regulatory regimes of the United States, France and Germany. If a motion to modify this Final Judgment is not contested by any party, it shall be granted if the proposed modification is within the reaches of the public interest. B. Neither the absence of specific reference to a particular event in the Final Judgment nor the foreseeability of such an event at the time this Final Judgment was entered, shall preclude this Court's consideration of any modification request. This standard for obtaining contested modifications shall not require the United States to initiate a separate antitrust action before seeking modifications. The same standard shall apply to any party seeking modification of this Final Judgment. Where modifications of the Final Judgment are sought, the provisions of Section VI of this Final Judgment may be invoked to obtain any information or documents needed to evaluate the proposed modification prior to decision by the Court. C. In addition to VIII.A and VIII.B, it is not the intent of the parties that Sprint should be competitively disadvantaged in such a way as to harm competition. If defendants believe that changed circumstances have caused any terms of the Final Judgment to operate in a way that is harmful to competition, they may present to plaintiff the reasons therefore and any supporting evidence, and if plaintiff in its sole discretion agrees that modification of the Final Judgment is appropriate, a request for modification shall be presented to the Court. Sanctions Nothing in this Final Judgment shall prevent the United States from seeking, or this Court from imposing, against defendants or any other person, any relief available under any applicable provision of law. Further Provisions A. The entry of this Final Judgment is in the public interest. B. The substantive restrictions and obligations of this Final Judgment shall be removed five years from the date that Phase II of this Final Judgment has taken effect with respect to both France and Germany, unless this Final Judgment has been previously terminated. The substantive obligations of Section III of this Final Judgment shall be removed on the date that Phase I of this Final Judgment ends, separately with respect to France and with respect to Germany, unless otherwise specified in this Final Judgment. DATED:
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