Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/524bv.pdf
Page Number: 263.0

524US1

Unit: $U84

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AMERICAN TELEPHONE & TELEGRAPH CO.
v. CENTRAL OFFICE TELEPHONE, INC.
Opinion of the Court

rates for customers making large usage and duration com-
mitments, and waiver of installation charges for customers
making multiyear commitments (subject to penalties for
early termination). Petitioner also added a new billing op-
tion.
In addition to network billing, whereby petitioner pre-
pares a single bill that applies the tariffed rate to all usage at
all locations, petitioner started to offer multilocation billing
(MLB), which allows the SDN volume discounts to be appor-
tioned between an SDN customer and individual locations on
its network, with the proportion being chosen by the cus-
tomer. Under this option, petitioner sends bills directly to
the customer’s individual locations (which, in the case of re-
sellers, means to the reseller’s customers) but the customer
(or reseller) remains responsible for all payments. The tar-
iff provides, however, that petitioner is not responsible for
the allocation of charges. See AT&T Tariff FCC No. 1,
§ 6.2.4 (1986), App. to Brief for Petitioner 24a.

Attracted by these changes, in October 1989, respondent
approached petitioner regarding its possible purchase of
SDN. LaDonna Kisor, a sales representative in petitioner’s
Portland, Oregon, ofﬁce, described the service and gave re-
spondent literature on SDN. She predicted that petitioner
could establish an initial SDN network for respondent in four
to ﬁve months, and could thereafter add new locations within
30 days of receiving an order. Respondent subscribed to a
tariffed switched-access SDN plan under which the up-front
installation charges would be waived and respondent would
receive a 17% to 20% discount off basic SDN rates in ex-
change for a 4-year commitment to purchase two million min-
utes of service annually. Respondent also requested MLB.
Petitioner conﬁrmed respondent’s order, stating that re-
spondent would obtain SDN “ ‘pursuant to the rates, terms
and conditions in AT&T’s [FCC Tariff No. 1],’ ” and that the
provisions of the tariff, “ ‘including limitations on AT&T’s
liabilities, shall govern your and AT&T’s obligations and lia-
bilities with respect to the service and options you have