In the
United States Court of Appeals
For the Seventh Circuit

No. 98-1439

Richard Goldwasser, et al.,
individually and on behalf of
all others similarly situated,

Plaintiffs-Appellants,

v.

Ameritech Corporation,

Defendant-Appellee.



Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 97 C 6788--Charles P. Kocoras, Judge.


Argued March 30, 1999--Decided July 25, 2000



  Before Ripple, Diane P. Wood, and Evans, Circuit
Judges.

  Diane P. Wood, Circuit Judge. The
Telecommunications Act of 1996, Pub. L. 104-104,
110 Stat. 56 (1996), codified at 47 U.S.C. sec.
151 et seq., represents a comprehensive effort by
Congress to bring the benefits of deregulation
and competition to all aspects of the
telecommunications market in the United States,
including especially local markets. But progress
and change in such a complex industry do not
occur overnight, and Congress accordingly
entrusted the Federal Communications Commission
(FCC) and the state public utility commissions
with the task of overseeing the transition from
the former regulatory regime to the Promised Land
where competition reigns, consumers have a wide
array of choice, and prices are low.

  The antitrust laws for more than 110 years have
served much the same purpose for the entire
economy. The question that confronts us here is
how and where these two competition-friendly
regimes intersect. Consumers in most of the
states served by Ameritech Corporation brought
this suit under the monopolization provision of
the Sherman Act, 15 U.S.C. sec. 2 (1994),
claiming that Ameritech has been violating both
the antitrust laws, as it has moved through the
deregulation process mandated by the
Telecommunications Act (which we will usually
call "the 1996 Act" for short), and the 1996 Act
itself. The district court dismissed their case,
never reaching their effort to bring it as a
class action, on the ground that they lacked
standing to complain about Ameritech’s alleged
footdragging and obstructive behavior. We have
concluded that the district court was correct to
dismiss the plaintiffs’ suit. Our reasons,
however, differ in important respects from those
on which it relied, as we explain below.

I

  Plaintiffs-appellants Richard Goldwasser,
Michael Cohn, Eric Carter, and Richard Lozon are
citizens of Illinois, Wisconsin, Indiana, and
Michigan, respectively. Those states, plus Ohio
(for which there mysteriously was no named class
representative) are the five states in which
defendant Ameritech provides local telephone
service. The Goldwasser plaintiffs (which is what
we will call them here) are consumers of local
telephone services in Ameritech’s area. When the
1996 Act was passed, they, like millions of other
telephone customers throughout the country,
looked forward to the same kind of development of
competitive local services that had occurred
several decades earlier in the telephone
equipment, long distance, and enhanced services
markets. When this did not occur as speedily as
they had hoped, they concluded that the fault lay
with Ameritech. Under the 1996 Act, Ameritech has
special responsibilities as the incumbent local
exchange carrier, or ILEC, to cooperate with
potential entrants as they seek to break into the
local services markets. Believing that Ameritech
was flouting its obligations under the 1996 Act
and unlawfully monopolizing under Section 2 of
the Sherman Act, they filed the present suit as
a class action on September 26, 1997.

A.

  Before turning to the specifics of the
Goldwasser complaint, it is helpful to review
what the 1996 Act was designed to do and how it
went about that task.

  Voice telephony itself was born with the famous
summons Alexander Graham Bell sent to his
assistant Thomas A. Watson, on March 10, 1876:
"Mr. Watson, come here; I want you." George P.
Oslin, The Story of Telecommunications 219
(1992). Just a few days earlier, on March 7,
1876, Bell became the owner of the first patent
for a recognizable telephone, Patent No. 174,465.
After a considerable amount of litigation,
certain patents for improvements to Bell’s
original invention were upheld by the Supreme
Court. See United States v. American Bell
Telephone Co., 167 U.S. 224 (1897). Bell and his
backers proved to be even more astute as
businesspeople than they had been as inventors.
They incorporated, and by 1886, a mere decade
after the issuance of Bell’s patent, the tree-
like shape of the world-famous Bell Telephone
company was beginning to be recognizable, with
the American Telephone and Telegraph Company
(AT&T) at its trunk. Oslin at 230.

  Although the Bell company reigned supreme during
the life of the basic patents, when the patents
expired there was a burst of competition from
many independent telephone companies around the
country. This was, however, temporary: mergers
and acquisitions led to re-consolidation, and by
the time the Communications Act of 1934, ch. 652,
48 Stat. 1064 (1934) (codified as amended in
scattered sections of 47 U.S.C.) (the 1934 Act),
was passed, it was an article of faith that
telephone service, like services furnished by
other public utilities, was a natural monopoly.
Consumer protection was to be achieved by
regulation, which, insofar as it affected local
service, took place at the state level. The FCC
had responsibility for regulating interstate
telephone companies and services.

  By 1934, the Bell System included operating
companies, long distance services, equipment
manufacturing, and research facilities. AT&T
owned 80% of all the local telephone lines and
services in the United States, and it had a
monopoly lock on long distance service. There
matters stood for some four decades. But, even if
the regulatory picture was static, technology and
markets were not. The natural monopoly assumption
came under increasing attack, especially as it
pertained to long distance services and equipment
manufacturing.
  In 1974, the United States, through the
Antitrust Division of the U.S. Department of
Justice, sent shock waves through the nation when
it instituted a massive antitrust case against
AT&T. The complaint alleged that AT&T and its
affiliates Western Electric Co. and Bell
Telephone Laboratories had maintained an unlawful
combination for many years among themselves and
with the 22 Bell Operating Companies, or BOCs in
telecom jargon; that they had restricted
competition from other telecommunications systems
and carriers, and from other manufacturers; and
that they had engaged in a host of monopolistic
practices. See [1970-1979 U.S. Antitrust Cases
Transfer Binder] Trade Reg. Rep. (CCH) para.
45,074. Rather early in the litigation, the
district judge who handled the proceedings from
the date of filing until the case was wrapped up
after the passage of the 1996 Act, the Honorable
Harold Greene, rejected the defendants’ argument
that the matters raised in the complaint fell
within the exclusive jurisdiction of the FCC and
were thus immune from antitrust scrutiny. See
United States v. American Tel. & Tel. Co., 461 F.
Supp. 1314, 1326-28 (D.D.C. 1978) (AT&T I). In
that opinion, Judge Greene considered the
question whether the communications statutes
conferred an implied immunity from antitrust
regulation on the defendants, and his answer was
no. Both his decision in that case, and the
eventual Modified Final Judgment (MFJ) that
reflected the consent decree reached among the
parties, rested on the simple notion that,
despite the existence of a substantial network of
regulation in the field, there was still plenty
of room for competition. See United States v.
American Tel. & Tel. Co., 552 F. Supp. 131
(D.D.C. 1982) (AT&T II), aff’d sub nom. Maryland
v. United States, 460 U.S. 1001 (1983). Where
competition was possible, the defendants had no
right to use their monopoly power to squelch it.

  From the time when the consent decree was
approved until the 1996 Act took effect, the
process of opening up telecommunications markets
to competition took place under the supervision
of the district court, which had the task of
administering the MFJ. Apart from its provisions
requiring the break-up of the old Bell System,
which was perhaps the most newsworthy consequence
of the antitrust suit, the MFJ contained
behavioral restrictions on the newly independent
regional BOCs (including Ameritech) and on AT&T
itself. See AT&T II, 552 F. Supp. at 226-28.
These restrictions, which pertained to questions
like the provision of long distance services
outside local access and transport areas, the
furnishing of wireless telephony, and the
development of enhanced services, were designed
to ensure that the former system (under which
competition was distorted by leverage and cross-
subsidization between protected, regulated
markets and unregulated markets) did not
reappear.

  Long before the 1996 Act was passed, however,
it had become clear that comprehensive regulation
of the rapidly advancing telecommunications
markets was not a task well suited to the federal
courts. Thus, one of the first things Congress
did in the 1996 Act was to shift the remaining
authority the district court was exercising under
the MFJ over to the FCC. The 1996 Act itself was
designed to "promote competition and reduce
regulation in order to secure lower prices and
higher quality services for American
telecommunications consumers and encourage the
rapid deployment of new telecommunications
technologies." Preamble to Telecommunications Act
of 1996. As the Supreme Court acknowledged in
AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 371
(1999), and as we have already noted, the
eventual hope is to transform the
telecommunications market from a monopolistic,
regulated one to a vibrant, competitive one.

  Two sections of the 1996 Act are of central
importance here: sec.sec. 251 and 252. They are
both contained in Part II of the statute, which
is entitled "Development of Competitive Markets."
Section 251 sets out detailed rules that
implement the general duty of telecommunications
carriers (as established in the statute) to
interconnect with one another’s facilities and
equipment. Each local exchange carrier, or LEC,
has the duty to resell on reasonable and
nondiscriminatory terms, to provide number
portability to the extent technically feasible,
to provide dialing parity to competing providers,
to afford access to rights-of-way, and to
establish reciprocal compensation arrangements
for the transport and termination of
telecommunications. 47 U.S.C. sec. 251(b).

  Incumbent LECs, or ILECs, have additional duties
under the statute, which are spelled out in sec.
251(c): they must negotiate in good faith to
create the agreements necessary for fulfilling
the subpart (b) duties; they must provide for
"requesting telecommunications carriers"
appropriate interconnections; they must provide
unbundled access to network elements at any
technically feasible point on just, reasonable
and nondiscriminatory terms; they must offer to
aspiring competitors at wholesale rates any
services that they sell at retail; and they must
give reasonable public notice of changes in their
services that would affect others.

  The 1996 Act contains specific language about
its relation to the federal antitrust laws.
Section 601(b)(1), found at 47 U.S.C.A. sec. 152
Historical and Statutory Notes, provides that ".
. . nothing in this Act or the amendments made by
this Act shall be construed to modify, impair, or
supersede the applicability of any of the
antitrust laws." To similar effect, sec.
601(c)(1) states that "[t]his Act and the
amendments made by this Act shall not be
construed to modify, impair, or supersede
Federal, State, or local law unless expressly so
provided in such Act or amendments."

B.

  This is the background against which the
Goldwasser plaintiffs filed their class action
complaint. The complaint focuses tightly on the
ILECs’ sec. 251 duties. It alleges that Ameritech
controls more than 90% of the markets for local
telephone service in the geographic territories
it covers (basically, the five state-area) and
that it has erected substantial barriers to entry
into those markets. It also alleges that
Ameritech controls a number of so-called
essential facilities, including its telephone
lines, equipment, transmission, and
interconnection stations in the relevant markets.
Ameritech’s competitors (i.e. the companies from
whom the plaintiff customers would like to
purchase) are unable to duplicate those
facilities. Ameritech, by engaging in a host of
exclusionary practices made possible by its
monopoly power, is preventing those competitors
from entering the market.

  The complaint specifies 20 specific exclusionary
or monopolistic practices Ameritech has engaged
in or continues to commit. We detail them here,
because the nature of the complaint sheds
significant light on the extent to which it
implicates pure antitrust theory, the extent to
which it focuses on local markets, and the extent
to which it rests on the 1996 Act:

  (1)   Ameritech is not providing the same
quality of service to its competitors as it
provides to itself, in violation of sec. 251.

  (2)   Again in violation of sec. 251, Ameritech
has not given its competitors nondiscriminatory
access to its operational support systems, nor
has it given them access to unbundled elements of
its system on terms equivalent to those Ameritech
enjoys.

  (3)   Ameritech has failed to provide "dark
fiber" as an unbundled network element, in
violation of the 1996 Act.

  (4)   Ameritech has failed to provide its
competitors access to poles, ducts, conduits, and
rights-of-way on a nondiscriminatory basis, in
violation of sec.sec. 251 and 271.

  (5)   Ameritech has failed fully to unbundle
its network elements, including local loops,
local transport, and local switching, in
violation of sec. 251(c)(3).

  (6) Ameritech’s competitors have experienced
undue delays (presumably caused by Ameritech) in
acquiring unbundled elements, and those delays
have precluded them from offering services as
attractive as Ameritech’s.

  (7) The competitors have also experienced
delays and discrimination as they have sought to
gain access to unbundled loops, in violation of
sec. 251(c)(3).

  (8) Ameritech has failed to provide unbundled
access to local transport interoffice
transmission facilities on a nondiscriminatory
basis, in violation of sec. 251(c)(3).

  (9) Ameritech has failed to provide local
switching to competitors, in violation of sec.
271(c)(2)(B)(vi).

  (10) Ameritech discriminates against
competitors by requiring competitive LECs and
competitors to pay originating and terminating
access charges, when it cannot collect interstate
access charges.

  (11) Ameritech has failed to offer or provide
customized routing, which is required to be
provided as part of unbundled local switching.

  (12) Ameritech has not provided dialing parity
to competitors for services such as operator
assistance ("0"), directory assistance ("411"),
and repairs ("611"), in violation of sec.
271(c)(2)(B)(xii).

  (13) Ameritech has failed to provide access to
its own 911 and emergency services on a
nondiscriminatory basis, in violation of sec.
271(c)(2)(B)(vii)(I).

  (14) Ameritech has continued to bill customers
of competitors who have converted from
Ameritech’s services, and hence some customers
are being double-billed, thereby harming the
competitors’ good will.

  (15) Ameritech has failed to provide
interconnection between its network and those of
competitors that is equal to the interconnections
it gives itself, in violation of sec.sec.
251(c)(2) and 271(c)(2)(B)(i).

  (16) Ameritech has not complied with sec.
272(b)(3) of the 1996 Act, which requires a BOC
and its interLATA affiliates to have separate
officers, directors, and employees.

  (17) Ameritech has failed publicly to disclose
all transactions with sec. 272 affiliates, in
violation of sec. 272(b)(5).

  (18) Ameritech has refused to sell to its
competitors, on just, reasonable, and
nondiscriminatory terms, access to components of
its network on an unbundled or individual basis.

  (19)   Ameritech has refused to sell to its
competitors local telephone services at wholesale
prices that are just, reasonable, and
nondiscriminatory, which prevents the competitors
in turn from offering attractive resale prices to
consumers.

  (20) Ameritech has refused to allow its
competitors to connect with its local telephone
network on just, reasonable, and
nondiscriminatory terms.

All of these practices, the complaint alleges,
violate both sec. 2 of the Sherman Act, 15 U.S.C.
sec. 2, and the 1996 Act itself. The plaintiffs
sought treble damages for the antitrust
violations, as well as declaratory and injunctive
relief.

C.

  The district court dismissed the entire case
under Rule 12(b)(6) for failure to state a claim.
It found first that the filed rate doctrine, as
developed in the line of cases beginning with
Keogh v. Chicago & N.W. Ry. Co., 260 U.S. 156
(1922), barred the claims for damages under
either the antitrust laws or the 1996 Act. The
remainder of its discussion therefore pertained
only to the plaintiffs’ requests for injunctive
relief. As to that, the court found that the
plaintiffs lacked standing to sue under the
antitrust laws, under the Supreme Court’s
decision in Block v. Community Nutrition
Institute, 467 U.S. 340, 351-52 (1984) (no
standing where a suit would severely disrupt a
complex regulatory scheme). Last, it found that
consumer plaintiffs were not entitled to sue to
enforce the duties on ILECs created by the 1996
Act.

II
A.

  We consider first the propriety of dismissing
the Goldwasser plaintiffs’ antitrust claims on a
Rule 12(b)(6) motion. The plaintiffs see this as
a straightforward application of Section 2:
Ameritech is a monopolist; Ameritech is engaging
in conduct designed to maintain its monopoly
power, through a variety of exclusionary
practices; and plaintiffs as consumers are
harmed. See generally United States v. Grinnell
Corp., 384 U.S. 563, 570-71 (1966). As consumers
and direct purchasers from Ameritech, they argue,
they clearly have standing to bring this suit
under decisions such as Associated General
Contractors of California, Inc. v. California
State Council of Carpenters, 459 U.S. 519, 539-41
(1983) (general definition of "person injured"
within the meaning of Clayton Act sec. 4, 15
U.S.C. sec. 15) and Illinois Brick Co. v.
Illinois, 431 U.S. 720 (1977) (barring suits by
indirect purchasers). The 1996 Act contains an
antitrust savings provision, and that is the end
of the matter as far as they are concerned.
Neither the filed rate doctrine nor the fact that
the 1996 Act contains specific rules regulating
Ameritech should stand in their way of treble
damages and injunctive relief, on behalf of
themselves and the class they seek to represent.

  We agree with the plaintiffs part of the way:
there is nothing in the rules of antitrust
standing that prevents them from suing. But, as
we will show, this case cannot survive as a pure
antitrust suit against Ameritech, freed from the
specific regulatory requirements Congress imposed
in the 1996 Act. Only if Section 2 somehow
incorporates the more particularized statutory
duties the 1996 Act has imposed on ILECs like
Ameritech would Ameritech’s alleged failure to
comply with the 1996 Act be, in itself, also an
antitrust violation. In considering whether this
is so, we necessarily make an inquiry similar to
the one in Silver v. New York Stock Exchange, 373
U.S. 341 (1963), about the extent to which
antitrust rules apply in this industry and the
extent to which a different federal statute--the
1996 Act--provides the governing rules of law. If
that inquiry reveals a conflict between the
antitrust laws and the 1996 Act, we would need to
reach the question of implied immunity; if it
shows instead that the two laws are reconcilable,
immunity is beside the point. (This, we believe,
is what the district court was getting at too,
when it turned to Block to justify its dismissal
of the case; its misstep was to use the rhetoric
of standing.)

  We begin this part of our inquiry with a brief
review of Sherman Act sec. 2, which is the
statute that makes it unlawful to monopolize, to
attempt to monopolize, or to conspire to
monopolize. The Supreme Court has had a number of
occasions on which to address the elements of a
Section 2 monopolization case, most recently in
Eastman Kodak Co. v. Image Technical Services,
Inc., 504 U.S. 451 (1992). There, quoting from
Grinnell, supra, the Court reviewed what it takes
to prove monopolization:

The offense of monopoly under sec. 2 of the
Sherman Act has two elements: (1) the possession
of monopoly power in the relevant market and (2)
the willful acquisition or maintenance of that
power as distinguished from growth or development
as a consequence of a superior product, business
acumen, or historic accident.

504 U.S. at 481, quoting Grinnell, 384 U.S. at
570-71.

  Few would say that the first element is easily
proved: it is exceedingly difficult to prove
market power, or monopoly power, directly, and
the conventional way of proving power by showing
a given share of a properly defined relevant
market can present vexing problems as well. But
the first element is a snap compared to the
second. To demonstrate unlawful acquisition of
monopoly power may not be terribly difficult,
especially if it was born from an unlawful merger
or acquisition, fraud on the Patent Office, or
some other visible misdeed. Proof of unlawful
maintenance of monopoly power, in contrast,
requires courts to make the most subtle of
economic judgments about particular business
practices. As the Supreme Court noted in
Copperweld Corp. v. Independence Tube Corp., 467
U.S. 752 (1984), unilateral conduct must be
approached with the utmost caution, lest the law
forbid desirable, robust competition:

It is not enough that a single firm appears to
"restrain trade" unreasonably, for even a
vigorous competitor may leave that impression.
For instance, an efficient firm may capture
unsatisfied customers from an inefficient rival,
whose own ability to compete may suffer as a
result. This is the rule of the marketplace and
is precisely the sort of competition that
promotes the consumer interests that the Sherman
Act aims to foster. In part because it is
sometimes difficult to distinguish robust
competition from conduct with long-run
anticompetitive effects, Congress authorized
Sherman Act scrutiny of single firms only when
they pose a danger of monopolization. Judging
unilateral conduct in this manner reduces the
risk that the antitrust laws will dampen the
competitive zeal of a single aggressive
competitor.

Id. at 767-68 (footnote omitted).

  Thus, it is clear that merely being a
monopolist does not violate Section 2. United
States v. Aluminum Co. of America, 148 F.2d 416,
429 (2d Cir. 1945) ("size alone does not
determine guilt; . . . there must be some
’exclusion’ of competitors; . . . the growth must
be something else than ’natural’ or ’normal;’ .
. . there must be a ’wrongful intent,’ or some
other specific intent; or . . . some ’unduly’
coercive means must be used"). See also Berkey
Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263,
275 (2d Cir. 1979); United States v. New York
Great Atlantic & Pacific Tea Co., 173 F.2d 79, 87
(7th Cir. 1949). It follows from this, as our
court and others have pointed out from time to
time, that even a monopolist is entitled to
compete; it need not lie down and play dead, as
it watches the quality of its products
deteriorate and its customers become disaffected.
See, e.g., Olympia Equipment Leasing Co. v.
Western Union Telegraph Co., 797 F.2d 370, 375
(7th Cir. 1986); Telex Corp. v. IBM, 510 F.2d
894, 927-28 (10th Cir. 1975).

  Part of competing like everyone else is the
ability to make decisions about with whom and on
what terms one will deal. When we are considering
distribution chains, or vertical relationships,
the doctrine of United States v. Colgate & Co.,
250 U.S. 300 (1919), comes into play, under which
the Court said (somewhat tautologically,
unfortunately), "[i]n the absence of any purpose
to create or maintain a monopoly, the [Sherman]
act does not restrict the long recognized right
of trader or manufacturer engaged in an entirely
private business, freely to exercise his own
independent discretion as to parties with whom he
will deal." Id. at 307. Tautologies or no, the
Colgate right has received consistent support
from the Supreme Court even for large firms, as
one can see from more recent decisions such as
NYNEX Corp. v. Discon, Inc., 525 U.S. 128 (1998),
in which the Court rejected the application of
the per se rule against group boycotts to the
decision of one buyer to favor one supplier over
another, even if the decision was not for a
legitimate business reason. See also Monsanto Co.
v. Spray-Rite Service Corp., 465 U.S. 752, 761
(1984) (reaffirming Colgate in terms).

  In general, then, even a firm with significant
market power has no duty to deal with certain
suppliers or distributors, unless it can be shown
that its decisions are part of a broader effort
to maintain its monopoly power. What about duties
to deal with competitors, either affirmatively or
by refraining from actions that will exclude them
from the market either by preventing entry or by
forcing incumbents out? The Supreme Court
encountered a competitor case in Aspen Skiing Co.
v. Aspen Highlands Skiing Corp., 472 U.S. 585
(1985). Although the Court ultimately found that
the decision of Ski Company (a firm with monopoly
power) actually to forgo cash revenues and
efficient methods of doing business for the sole
purpose of driving its rival out of the market
amounted to a violation of Section 2, it was
careful to explain the limits on its holding as
well. "Ski Co.," it wrote, "is surely correct in
submitting that even a firm with monopoly power
has no general duty to engage in a joint
marketing program with a competitor." 472 U.S. at
600. "The absence of a duty to transact business
with another firm is, in some respects, merely
the counterpart of the independent businessman’s
cherished right to select his customers and his
associates." Id. at 601.

  This court’s decision in Olympia Equipment
Leasing is consistent with the recognition in
Aspen Skiing that monopolists normally do not
need affirmatively to help their competitors.
Monopolists are just as entitled as other firms
to choose efficient methods of doing business
(which is not, recall, what the Ski Company was
doing, and that was why the Court and the jury
were able to spot its conduct for the
exclusionary practice it was). See Olympia
Equipment Leasing, 797 F.2d at 375; Abcor Corp.
v. AM Int’l, Inc., 916 F.2d 924, 929 (4th Cir.
1990); United States Football League v. National
Football League, 842 F.2d 1335, 1360-61 (2d Cir.
1988).

  With these principles in mind, we turn to the
question whether the Goldwasser plaintiffs had
standing under the antitrust laws to bring their
suit. We conclude that the answer is yes, no
matter which branch of antitrust standing
doctrine one considers. First, as we noted above,
the plaintiffs were direct purchasers from
Ameritech, and their complaint asserts that a
variety of practices in which Ameritech has
engaged and is engaging in have led prices for
those services to be anticompetitively high, in
violation of Section 2. As direct purchasers,
they have no Illinois Brick problem. As people
forced to pay an alleged monopolistic overcharge,
they have described the kind of injury the
antitrust laws are designed to redress, which is
to say they have satisfied the "antitrust injury"
requirement of Brunswick Corp. v. Pueblo Bowl-O-
Mat, Inc., 429 U.S. 477 (1977). They are
consumers, not shareholders, or unions, or others
whose injury is too remote to satisfy Clayton Act
sec. 4; thus, they have standing as the term is
defined in Associated General Contractors, supra.
  Finally, we think Ameritech is wrong to claim
that the plaintiffs lack standing because they
are attempting to raise third-party rights--the
rights of the competitors. It is true that the
reason the plaintiffs have been injured
(allegedly, of course) implicates the rights of
the competitors not to be excluded from the local
markets through anticompetitive actions of
Ameritech, but that does not make this a jus
tertii case. These plaintiffs want lower prices
and more choice, and they claim that Ameritech (a
monopolist) is doing things to prevent that from
happening. Their theory is a classic exclusionary
acts theory, and in all such cases, the
monopolist’s alleged sin is the exclusion of
other competitors from the market. One assumes
that those other competitors are grateful for the
help from the consumer litigation, but that is
incidental. The Goldwasser plaintiffs do not care
in principle which competitors enter their
markets; they just want a competitively
structured local telephone market that will
prevent Ameritech from inflicting antitrust
injury on them. We are satisfied that they are
asserting their own rights, and thus that they
have standing.

  Block, on which the district court relied, does
not require a contrary conclusion. Indeed, Block
did not even involve antitrust standing. The
question there was instead whether ultimate
consumers of dairy products were entitled to
obtain judicial review of milk market orders
issued by the Secretary of Agriculture under the
Agricultural Marketing Agreement Act of 1937, 7
U.S.C. sec. 601 et seq. The consumer plaintiffs
brought their suit under the Administrative
Procedure Act, 5 U.S.C. sec. 701 et seq., but the
Court found that Congress had created a different
scheme for judicial review of marketing orders in
the agricultural marketing legislation, which
excluded the kind of consumer suit the plaintiffs
wanted to bring.

  Block may offer useful insight into the
Goldwasser plaintiffs’ case insofar as they are
trying to assert rights directly under the 1996
Act, but we do not find it helpful for their
antitrust case. Their problem in the antitrust
case is not standing. It is the more fundamental
question whether they have stated a Section 2
claim at all against Ameritech when they accuse
it of failing to comply with its myriad duties
under sec.sec. 251, 252, and 271 of the
telecommunications law.

  The fundamental fallacy in the plaintiffs’
theory is that the duties the 1996 Act imposes on
ILECs are coterminous with the duty of a
monopolist to refrain from exclusionary
practices. They are not. It would have been
possible for Congress to have passed a statute
that simply lifted the regulatory prohibitions
found in sources such as the Telecommunications
Act of 1934, the MFJ, and other sources, that
barred companies in different parts of the
telecommunications market (i.e. long distance and
local markets, generally speaking) from entering
one another’s domains. Anyone who wanted to
compete with an ILEC would have had the burden of
duplicating its physical infrastructure or of
persuading the ILEC to contract with it on
mutually satisfactory terms, but this is the
normal way in which competitive markets work. It
obviously takes much longer to enter a market
that requires huge sunk cost investments before
business is possible, but the success of the
companies that challenged AT&T’s hegemony over
long distance shows that it can be done. We might
think of this hypothetical legislative approach
as one involving passive restrictions on the
ILECs, under which they would have been permitted
to compete, but they would have been prohibited
from engaging in affirmatively exclusionary acts
like the efforts of the Ski Company in Aspen
Skiing, or the newspaper company in Lorain
Journal Co. v. United States, 342 U.S. 143
(1951), or the shoe company in both United Shoe
Machinery Corp. v. United States, 258 U.S. 451
(1922), and United States v. United Shoe
Machinery Corp., 110 F. Supp. 295 (D. Mass.
1953), aff’d per curiam, 347 U.S. 521 (1954).

  In other words, Congress could have chosen a
simple antitrust solution to the problem of
restricted competition in local telephone
markets. It did not. Instead, in an effort to
jump-start the development of competitive local
markets, it imposed a host of special duties on
the ILECs; it entrusted supervision of those
duties to the FCC and the state public utility
commissions; and it created a system of
negotiated agreements through which this would be
accomplished. These are precisely the kinds of
affirmative duties to help one’s competitors that
we have already noted do not exist under the
unadorned antitrust laws. See Olympia Equipment
Leasing Co., 797 F.2d at 375; MCI Communications
Corp. v. AT & T, 708 F.2d 1081, 1149 (7th Cir.
1983); United States Football League, 842 F.2d at
1360-61; Catlin v. Washington Energy Co., 791
F.2d 1343, 1348-49 (9th Cir. 1986).
 It is not our task to assess the wisdom of the
particular measures Congress thought would be
helpful in that process. We have only to
recognize that the duties to which plaintiffs
refer in paragraphs (1) through (20) of their
complaint, which we have set out earlier, go well
beyond anything the antitrust laws would mandate
on their own. A complaint like this one, which
takes the form "X is a monopolist; X didn’t help
its competitors enter the market so that they
could challenge its monopoly; the prices I must
pay X are therefore still too high" does not
state a claim under Section 2. The reason is
because the antitrust laws do not impose that
kind of affirmative duty, even on monopolists.

  To the extent such a duty exists, as the
complaint itself makes clear, it comes from the
1996 Act. We think it both illogical and
undesirable to equate a failure to comply with
the 1996 Act with a failure to comply with the
antitrust laws. It is illogical because there are
countless laws that a firm with market power
might violate that have little or nothing to do
with its position in the market: an agricultural
firm might fail to comply with safety or
cleanliness standards applicable to food
processing; a computer processor firm might
violate employment discrimination laws; a
pharmaceutical firm might run afoul of the Food
and Drug Administration’s rules for approval of
new drugs. Even if, in some indirect way, those
defalcations helped the firm to maintain its
monopoly, the link is too indirect to support an
antitrust claim. Those other statutory regimes
contain their own penalty structures, and that is
the proper way to address any violations.

  That leads to our other point, which is that it
would be undesirable here to assume that a
violation of a 1996 Act requirement automatically
counts as exclusionary behavior for purposes of
Sherman Act sec. 2. The 1996 Act in fact has an
elaborate enforcement structure that Congress
created for purposes of managing the transition
from the former regulated world to the hoped-for
competitive markets of the future. Questions
concerning the duties of the ILECs, the state
commissions, and competitors have been coming
before the courts with regularity. See, e.g., MCI
Telecommunications Corp. v. U.S. West
Communications, 204 F.3d 1262 (9th Cir. 2000)
(review of arbitrated agreement, including topics
such as unbundling, co-location of remote
switching units, and cost arrangements); AT&T
Communications Systems v. Pacific Bell, 203 F.3d
1183 (9th Cir. 2000) (reviewing arbitrated
agreement under which competitor sought entry
into ILEC market); Alenco Communications, Inc. v.
FCC, 201 F.3d 608 (5th Cir. 2000) (denying a host
of petitions from local exchange carriers
challenging FCC universal service obligation
rules); GTE South, Inc. v. Morrison, 199 F.3d 733
(4th Cir. 1999) (upholding FCC’s rules under the
1996 Act for setting prices for unbundled network
elements and state commission’s decision in an
arbitration); Puerto Rico Telephone Co. v.
Telecommunications Regulatory Board of Puerto
Rico, 189 F.3d 1, 12-13 (1st Cir. 1999) (deciding
among other things that review of state
commission’s actions under state law relating to
interconnection was not possible under the 1996
Act); Texas Office of Public Utility Counsel v.
FCC, 183 F.3d 393 (5th Cir. 1999) (evaluating
claims pertaining to the universal service
obligation that exists under the 1996 Act,
upholding some parts of the FCC’s orders and
striking down others); BellSouth Corp. v. FCC,
162 F.3d 678 (D.C. Cir. 1998) (upholding 1996 Act
restrictions on the BOCs’ ability immediately to
provide in-region long distance service); SBC
Communications, Inc. v. FCC, 154 F.3d 226 (5th
Cir. 1998) (upholding the special provisions of
the 1996 Act directed toward the BOCs, relating
to in-region long distance service, equipment
manufacturing, and electronic publishing); and
BellSouth Corp. v. FCC, 144 F.3d 58 (D.C. Cir.
1998) (upholding provisions of 1996 Act that
limit the ability of the BOCs to provide
electronic publishing services). The antitrust
laws would add nothing to the oversight already
available under the 1996 law.

  Our principal holding is thus not that the 1996
Act confers implied immunity on behavior that
would otherwise violate the antitrust law. Such
a conclusion would be troublesome at best given
the antitrust savings clause in the statute. It
is that the 1996 Act imposes duties on the ILECs
that are not found in the antitrust laws. Those
duties do not conflict with the antitrust laws
either; they are simply more specific and far-
reaching obligations that Congress believed would
accelerate the development of competitive
markets, consistently with universal service
(which, we note, competitive markets would not
necessarily assure).
  The only question that remains under the
antitrust part of the case is whether anything
the plaintiffs have alleged can be divorced from
its 1996 Act context such that it states a free-
standing antitrust claim for Rule 12(b)(6)
purposes. The plaintiffs have argued that they
have such claims: they point to their allegations
that Ameritech (a monopolist) controlled certain
essential facilities and refused unreasonably to
provide access for others to those facilities.
They refer to the antitrust theory that began
with United States v. Terminal Railroad Ass’n,
224 U.S. 383 (1912), and that the Supreme Court
developed further in Associated Press v. United
States, 326 U.S. 1 (1945).

  It is true that paragraph 37 of the complaint
asserts that Ameritech "dominates and controls an
essential facility, which consists of its
telephone lines, equipment, and transmission and
interconnection stations in the relevant market,"
and paragraph 38 asserts that Ameritech’s
competitors are practically and reasonably unable
to duplicate those essential facilities. The
complaint also alleges that Ameritech has refused
to deal with its competitors on just, reasonable,
and nondiscriminatory terms. Nevertheless, when
one reads the complaint as a whole these
allegations appear to be inextricably linked to
the claims under the 1996 Act. Even if they were
not, such a conclusion would then force us to
confront the question whether the procedures
established under the 1996 Act for achieving
competitive markets are compatible with the
procedures that would be used to accomplish the
same result under the antitrust laws. In our
view, they are not. The elaborate system of
negotiated agreements and enforcement established
by the 1996 Act could be brushed aside by any
unsatisfied party with the simple act of filing
an antitrust action. Court orders in those cases
could easily conflict with the obligations the
state commissions or the FCC imposes under the
sec. 252 agreements. The 1996 Act is, in short,
more specific legislation that must take
precedence over the general antitrust laws, where
the two are covering precisely the same field.

  This is not the kind of question that requires
further development of a factual record, either
on summary judgment or at a trial. We therefore
agree with the district court that it was proper
for resolution under Rule 12(b)(6). There are
many markets within the telecommunications
industry that are already open to competition and
that are not subject to the detailed regulatory
regime we have been discussing; as to those, the
antitrust savings clause makes it clear that
antitrust suits may be brought today. At some
appropriate point down the road, the FCC will
undoubtedly find that local markets have also
become sufficiently competitive that the
transitional regulatory regime can be dismantled
and the background antitrust laws can move to the
fore. Our holding here is simply that this is not
what Congress has mandated at this time for the
ILEC duties that are the subject of the
Goldwasser complaint. The district court thus
correctly rejected the plaintiffs’ antitrust
theory.

B.

  Plaintiffs still have another arrow in their
quiver, which is their claim under the 1996 Act
itself. No one ever suggested that they lacked
standing to bring that action, and it obviously
does not raise the problems of conflicting
statutory schemes that the antitrust theory does.
But they face a different problem here. The 1934
Act permits a lawsuit for damages to be brought
by "[a]ny person claiming to be damaged by any
common carrier subject to the provisions of this
chapter," 47 U.S.C. sec. 207, and it makes
carriers liable to such plaintiffs for "the full
amount of damages sustained in consequence of any
such violation," together with attorney’s fees,
47 U.S.C. sec. 206. As consumers, however, their
lawsuit for damages boils down to a claim for
overcharges Ameritech has been able to impose
upon them, as a result of its failure to carry
out its responsibilities under the 1996 Act.

  The district court concluded that the filed
rate doctrine, which bars courts from re-
examining the reasonableness of rates that have
been filed with regulatory commissions, precluded
this kind of consumer action. In Keogh, supra,
the Supreme Court explained that the courts’
ability to determine the reasonableness of rates
is limited; that awarding damages to plaintiffs
while leaving less litigious customers paying the
filed rates would be discriminatory; and that a
damages assessment would necessarily require an
independent rate-setting proceeding in which the
court would have to guess what lower rate the
agency should have chosen. 260 U.S. at 163-64.
Although the doctrine had come under some
criticism, the Supreme Court reaffirmed it in
Square D Co. v. Niagara Frontier Tariff Bureau,
Inc., 476 U.S. 409, 424 (1986), and we are bound
to follow it.

  The Goldwasser plaintiffs argue that Ameritech’s
rates should not be shielded by the doctrine
because, although the state public utility
commissions nominally oversee its rate-setting,
they rarely exercise their muscle and thus give
no meaningful review to the rate structure. The
Supreme Court rejected precisely this argument in
Square D, 476 U.S. at 417 n.19, and this court
did the same in In re Wheat Rail Freight Rate
Antitrust Litigation, 759 F.2d 1305, 1313 (7th
Cir. 1985). We reject it here again, but with the
additional comment that the process established
in sec. 252 of the 1996 Act for review of
negotiated agreements, both for substance and for
implementation, provides an extra safeguard
against indolent agencies. Furthermore, the
record thus far is one of active use of these
review procedures; there would be no basis at all
to find that they are illusory.

  We thus agree with the district court that the
plaintiffs cannot pursue their damages claim
under the 1996 Act, because the monopoly claim
these plaintiffs are trying to assert necessarily
implicates the rates Ameritech is charging. To
the extent they are seeking damages under the
Sherman Act, the same analysis applies.

III

  The judgment of the district court is AFFIRMED.
