A Michigan administrative law judge wants Ameritech Corp.
to be fined $1.7 million over an alleged illegal transfer of assets to its
In a sharply worded decision, Judge Theodora Mace ruled
last week that Ameritech violated the Michigan Telecommunications Act when it failed to
advise state regulators of an August 1995 equipment transfer to its video arm, Ameritech
Mace's decision was the latest setback for Ameritech
in Michigan. The Public Service Commission recently outlawed its AmeriChecks marketing
plan, ruling that it discriminated against consumers who don't take ANM's cable
Ameritech said it will file an exception to Mace's
recommendation. The PSC will have until March 26 to issue a final ruling.
In her suggested PSC decision, Mace said, 'The
potential for harm to the public, as well as to competitors, due to failure to report such
a transfer is very high.'
Mace said the commission must review such asset transfers
to identify any 'subterfuge by a provider who may be expressing a public intent to
use assets in a certain way, while really aiming to provide them to an affiliate at less
that fair market value, or to otherwise gain unfair competitive advantage.'
Claiming that the Chicago-based Baby Bell 'has
violated the MTA in the past,' Mace said it was unclear 'how or when Ameritech
will be persuaded to follow both the spirit and the letter of the [law] if no penalty is
imposed at this juncture.'
Therefore, she suggested a fine of $1,744,000, and that
Ameritech reimburse Comcast Corp.'s Comcast Cablevision and the Michigan Cable
Telecommunications Association for legal fees incurred in bringing the complaint.
Mace conceded, however, that Ameritech may not consider
$1.7 million 'significant, or a deterrent to further violations.'
'The Michigan Telecommunications Act establishes rules
to protect the public against Ameritech's anti-competitive abuses,' said MCTA
executive director Colleen McNamara, in a prepared statement. 'Ever since the act was
passed, Ameritech has repeatedly violated those rules and acted as if it is above the
MCTA spokesman Chris Horak noted that its unusual for an
administrative law judge to issue such a harshly worded recommendation.
'It really took Ameritech to task,' he said.
Ameritech spokeswoman Sara Snyder said the MTA only
requires that the company inform the PSC if it transfers equipment used to deliver local
In this case, the fiber optics and computer equipment
transferred to ANM were originally earmarked for a video-dialtone system that was scrapped
when Ameritech decided to build its own cable systems in Michigan, Snyder said.
'Based on the MTA, we didn't report it because
the equipment that was transferred was never intended to be used, nor was it ever used, to
offer local telephone service,' she said.
Ameritech spokesman Geoff Potter called the complaint
another attempt to slow Ameritech's penetration into the Detroit suburbs, where it
has 21 systems competing with several MSOs.
'The cable companies have tried to slow
Ameritech's efforts at every turn,' he said.