TeleSTAR Inc., an Orem-based telecommunications company, has filed a federal court antitrust suit against MCI Communications, Western Tele-Communications Inc. and WTCI's parent, WestMarc Communications.
TeleSTAR, which is undergoing reorganization under Chapter 11 of the Bankruptcy Act, contends in the suit filed Tuesday that the defendants and the Federal Communications Commission conspired to deny TeleSTAR a license to operate microwave networks.The suit says the company could not yet specify its damages, "but has reason to believe that its damages are not less than $300 million." The suit asks treble the actual damages, punitive damages and injunctive relief.
The suit contends that in 1984 TeleSTAR began construction of a microwave network from Denver to Salt Lake City without knowing it needed an FCC construction permit.
The suit said WTCI tried to purchase the network, and, when rejected, it filed a complaint with the FCC seeking to have TeleSTAR denied a license. MCI joined in the petition.
"WTCI and MCI filed and prosecuted their complaints for the purpose of harassing their new competitor, delaying operation (of the firm's network), delaying receipt of revenues by a small entrant and forcing TeleSTAR to sell its network to WTCI," the suit said.
The suit said the Common Carrier Bureau concluded TeleSTAR did not wilfully violate FCC rules and it recommended the Orem company be granted a license.
"The FCC, however, in deciding whether to grant or deny TeleSTAR a license, conspired with and/or was subverted by MCI and WTCI," the suit said. "The FCC ignored the recommendations of its experienced trial counsel, and, at considerable expense to the agency and parties, dragged its hearings and review proceedings through 31/2 years."
The suit contends the FCC exonerated MCI of intentional wrongdoing in FCC violations, including premature construction of several networks throughout the country.
It contends the FCC also exonerated WTCI of liability for illegal construction and operation of microwave networks.
The suit also alleges MCI and WTCI conducted settlement discussions in bad faith.
TeleSTAR has appeals pending before the Court of Appeals for the District of Columbia of the FCC decisions denying it a license and exonerating MCI and WTCI.