For this proposition, AT&T relies on the well settled principle that a defendant's "monopoly over the distribution of its own product cannot form the basis of a valid monopolization claim." Theatre Party, 695 F. Supp. at 155.
AT&T's argument fails because a monopolist, or person attempting to monopolize, can be found liable in regard to distribution of its own product if it is (1) illegally attempting to destroy competition by refusing to deal or (2) controlling an essential service or bottleneck. See MCI Communications Corp. v. American Tel. and Tel. Co., 708 F.2d 1081, 1148-49 (7th Cir.) (discussing theories under which denial of multipoint interconnections by AT&T could violate antitrust laws), cert. denied, 464 U.S. 891, 78 L. Ed. 2d 226, 104 S. Ct. 234 (1983); American Tel. and Tel. Co. v. North Am. Indus. of New York, Inc., 772 F. Supp. 777, 784-86 (S.D.N.Y. 1991) ("essential facilities" claim stated where New York Telephone refused to sell its fraud-prevention service to pay telephone competitor).
NCA's complaint states a claim against AT&T under each of these two approaches because, drawing all reasonable inferences in favor of NCA, NCA alleges that AT&T is a monopolist, or is attempting to become a monopolist, in the market of long distance voice telecommunications services and is mishandling the provision of essential services to resellers such as NCA in order that it can further establish its monopoly. Accordingly, NCA's claim is sufficient on this point.
C. Sufficiency of NCA's Pleading of Facts.
Lastly, AT&T argues that the monopolization counts should be dismissed because NCA has failed to plead facts sufficient to support its claims; according to AT&T, NCA has not alleged injury to competition in the relevant market but merely alleged injury to itself. AT&T's argument is defective in two respects.
First, NCA clearly alleges injury more than to itself. NCA's complaint repeatedly asserts that AT&T's disparate "provisioning" discriminates against commercial SDN resellers -- of which NCA is but one. Compl. PP 8, 10-11, 26, 31, 33, 38-40. Furthermore, to the extent the allegations specify AT&T's treatment of NCA individually -- which the complaint does in substantial detail -- it can be reasonably inferred that other SDN resellers also suffer from the same mistreatment by AT&T. See North Am., 772 F. Supp. at 786 (inferring that non-parties also suffer from alleged anticompetitive behavior).
Second and more importantly, NCA explicitly alleges injury to competition in the long distance voice telecommunications services market. Compl. PP 26-27, 31-33. AT&T contends in turn that NCA's allegations of injury to competition are merely conclusory and in substance speak merely to AT&T's "administrative and bureaucratic" decisions on a micro-management level, which have no effect on the relevant market. Reference to NCA's extensive factual allegations, however, demonstrates that AT&T's argument is without merit.
NCA has alleged broad-based, discriminatory conduct in the manner in which AT&T services its SDN reseller customers relative to its SDN non-reseller customers. NCA well articulates its claim that AT&T provides disparate "provisioning" services to SDN resellers in order to discourage end-user customers from seeking long distance voice telecommunications service through the SDN resellers, as opposed to purchasing AT&T services such as Pro-WATS and Multi-Location WATS. Thus, NCA's allegations of the impact of AT&T's conduct upon competition between long distance voice telecommunications services are adequate to withstand a motion to dismiss.
III. The Robinson-Patman Cause of Action
Count IV of NCA's complaint alleges price discrimination in violation of the Robinson-Patman Act. The Robinson-Patman Act makes it ". . . unlawful for any person engaged in commerce . . . to discriminate in price between different purchasers of commodities of like grade and quality . . . ." 15 U.S.C. § 13(a). Recognizing that the Robinson-Patman Act applies only to "commodities," NCA alleges that long distance voice telecommunications services are commodities, Compl. P 37, but AT&T correctly points out that they are instead services, to which the Robinson-Patman Act does not apply.
Several cases have considered the range of "commodities" under the Robinson-Patman Act and have distinguished commodities from intangible goods and services. See, e.g., First Comics, Inc. v. World Color Press, Inc., 884 F.2d 1033, 1035-38 (7th Cir. 1989) (printing of comic books is service), cert. denied, 493 U.S. 1075, 107 L. Ed. 2d 1030, 110 S. Ct. 1123 (1990); Ambook Enters. v. Time Inc., 612 F.2d 604, 609-10 (2d Cir. 1979) (newspaper advertising is not commodity), cert. denied, 448 U.S. 914, 65 L. Ed. 2d 1179, 101 S. Ct. 35 (1980); Rankin County Cablevision v. Pearl River Valley Water Supply Dist., 692 F. Supp. 691, 692-93 (S.D. Miss. 1988) (cable television service is not commodity). One court has even held that telecommunications services, in the case of AT&T's transmission of television network signals, are not commodities under the Robinson-Patman Act. American Tel. and Tel. Co. v. Delta Communications Corp., 408 F. Supp. 1075, 1114 (S.D. Miss. 1976), aff'd per curiam, 579 F.2d 972 (5th Cir. 1978), cert. denied, 444 U.S. 926, 62 L. Ed. 2d 182, 100 S. Ct. 265 (1979).
In view of these precedents, I find as a matter of law that the long distance voice telecommunications services at issue in this action do not constitute "commodities" under the Robinson-Patman Act.
Accordingly, Count IV of the complaint is dismissed.
AT&T's motion to dismiss is granted as to Count IV but denied as to Counts II and III.
Dated: New York, New York
December 21, 1992
Loretta A. Preska, U.S.D.J.