Full opinion text
OPINION HAROLD H. GREENE, District Judge. The motions before the Court address the Court’s jurisdiction and they raise fundamental issues concerning the discovery that should govern the future path of this antitrust litigation. A recapitulation of the history of this case will be helpful to an understanding of these issues. The complaint was filed on November 20, 1974. It alleges violations of Section 2 of the Sherman Act, 15 U.S.C. § 2, by the American Telephone and Telegraph Company (AT&T), Western Electric Company, Inc. (Western Electric), and Bell Telephone Laboratories, Inc. (Bell Labs). In sweeping language the complaint alleges that an unlawful combination and conspiracy exists and has existed for many years among the defendants and certain co-conspirators (primarily the Bell Operating Companies), designed to permit AT&T to maintain control over Western Electric, Bell Labs, and the Bell Operating Companies; to restrict competition from other telecommunications systems and carriers and from other manufacturers and suppliers of telecommunications equipment; and to cause Western Electric to supply substantially all the telecommunications requirements of the Bell System. The complaint explains that the defendants are violating the antitrust laws by various monopolistic practices including the refusal to sell terminal equipment to subscribers of Bell System telecommunications service, the creation of obstructions to the interconnection of various carriers with the Bell System, and the maintenance of a monopolistic manufacturing and purchasing relationship between Western Electric and the Bell System. It is further alleged that, as a consequence of these practices (1) defendants have achieved and are maintaining a monopoly of telecommunications service and equipment; (2) competition in these areas has been restrained; and (3) purchasers of telecommunications service and equipment have been denied the benefits of a free and competitive market. Among other relief, the action seeks the divestiture by AT&T of all Western Electric stock; the separation of some or all of the Long Lines Department of AT&T from the Bell Operating Companies; the divestiture by Western Electric of its manufacturing and other assets sufficient to insure competition in the manufacture and sales of telecommunications equipment; and such relief against Bell Labs as the Court may find appropriate. Defendants’ Answer, and the Court sua sponte, raised two threshold defenses: (1) that a decree entered in 1956 by the U.S. District Court for the District of New Jersey (United States v. Western Electric Co., Civil Action No. 17 -49 (D.N.J.1956)) is res judicata, and (2) that the matters complained of by the government are within the exclusive jurisdiction of the Federal Communications Commission and therefore immune from scrutiny under the antitrust laws. On October 1, 1976, the Court rejected the claim of res judicata, and on November 24, 1976, it ruled that defendants do not possess blanket immunity from antitrust liability by virtue of the Communications Act of 1934 or their regulation by the Federal Communications Commission. In rejecting the plea that the FCC has exclusive jurisdiction over the subject matter of this litigation, the Court further stated, however, that it might in the future refer particular issues to the Commission under the so-called doctrine of primary jurisdiction. United States v. Am. Tel. & Tel. Co., 427 F.Supp. 57 (D.D.C.1976) (Waddy, J.), cert. denied, 429 U.S. 1071, 97 S.Ct. 824, 50 L.Ed.2d 799 (1977), cert. denied, No. 77-1009 (D.C.Cir. May 27, 1977), cert. denied, 434 U.S. 966, 98 S.Ct. 507, 54 L.Ed.2d 452 (1977). Shortly after the filing of the complaint, in November of 1974, and while these legal issues were being litigated, the parties began to engage in discovery. Defendants served a request for production of documents upon the government, as well as a comprehensive set of interrogatories. The government, for its part, filed numerous discovery requests upon defendants and each of the operating telephone companies in which AT&T holds a majority interest, and it began fairly extensive third party discovery. Disputes arose almost immediately, however, with each side accusing the other of making unduly broad requests and of engaging in obstructive conduct in relation to opposing requests. These controversies became moot in relatively short order, as the course of discovery was stayed pending resolution of the jurisdictional issues. Eventually, and contemporaneously with its ruling on these issues, the Court issued an order vacating the stay that had been in effect for almost 22 months. and shortly thereafter, pursuant to stipulation of the parties, it issued a number of other pretrial orders, which established machinery for the recommencement of discovery. *Almost immediately upon the entry of these orders, defendants sought review of the Court’s ruling on the jurisdictional issues by petitioning both the U.S. Court of Appeals and the U.S. Supreme Court for writs of certiorari, and during the pendency of these petitions in the appellate courts, all proceedings in this Court, including discovery, were again stayed, this time, with one brief interruption, from January 25, 1977, to November 28, 1977. When the last certiorari petition was denied, and the stays were dissolved, the parties filed a number of proposed orders concerning pretrial discovery, ***and the Court, by its order of February 7, 1978, referred the case to Magistrate Lawrence S. Margolis to direct the preparation of a discovery schedule (see p. 1348, infra). At the same time, it denied two pretrial orders (Nos. 9 and 12) submitted by defendants which again raised the issue of the Court’s jurisdiction; denied proposals for pretrial orders (Nos. 10 and 11) which would have dealt in various ways with documents generated in private antitrust proceedings in which AT&T is a defendant; and referred, to the Magistrate defendants’ proposed Pretrial Order No. 13 which would have established that all agencies and departments of the United States government are party plaintiffs in this suit for purposes of discovery. All of these matters, which are still pending, are discussed in detail below. Pursuant to the authority vested in him by the Court, Magistrate Margolis on April 27,1978, issued two discovery orders. Defendants objected to the second of these orders, and appealed it to the Court (28 U.S.C. § 636(b)(1)(A)) which approved a provision establishing a mechanism for the voluntary production of documents from government agencies, but otherwise stayed the effect of the order. Since that time, there has been little activity, and such discovery as has been attempted has been the subject of intense controversy. The case was assigned to this Court on June 22, 1978. On July 6, 1978, the parties were directed to file status memoranda on all outstanding issues, and on August 21, 1978, argument was heard on these matters. While these.issues arose in varying procedural contexts, they may conveniently be discussed under four headings: (1) jurisdiction, (2) the nature of the plaintiff, (3) the government’s effort to secure access to documents collected in several private antitrust suits brought against defendants in other districts, and (4) the future course of this action, including the scheduling of proceedings and the authority of the Magistrate and the Special Masters. I In all of their submissions to this Court, defendants have vigorously and consistently raised the jurisdictional issue. They insist that an irreconcilable conflict exists between the antitrust laws and the regulatory scheme established by the relevant statutes, that when there is such a conflict the antitrust laws must give way, and that therefore the Court lacks jurisdiction over this action. While in many respects defendants’ contentions constitute rearguments of matters rejected by Judge Waddy in his order of November 24, 1976, in view of the importance of this issue, and since a claim of lack of jurisdiction may be raised and entertained at any time (Rule 12(h)(3), F.R.Civ.P.), I have independently considered the jurisdictional issues. Upon such reconsideration, I concur with Judge Waddy’s conclusion that regulation by the Federal Communications Commission and state regulatory bodies does not immunize defendants from this antitrust action. Telecommunications carriers clearly do not enjoy an express statutory immunity from antitrust enforcement with respect to the activities here involved. While Congress has not hesitated in so many words to exempt the practices of other industries from the antitrust laws, and while it has statutorily exempted some activities of telephone companies from those laws, it has not done so with respect to the conduct which is the subject matter of this complaint. Likewise, defendants have cited nothing in the legislative history of the statutes regulating the telecommunications industry which would lead to the conclusion that an antitrust immunity was contemplated when those statutes were enacted. Thus, if the Court lacks jurisdiction, it could only be because defendants enjoy an immunity by implication, resulting from an incompatibility between the antitrust laws and the statutes which regulate the telecommunications industry. The problem created by the tension between the antitrust laws and economic regulation has been long recognized. See, e. g., United States v. Trans-Missouri Freight Association, 166 U.S. 290, 17 S.Ct. 540, 41 L.Ed. 1007 (1879); 2 A. Kahn, The Economics of Regulation : Principles and Institutions 1, 4-5 (1971). Broadly speaking the antitrust laws are rooted in the proposition that the public interest is best protected by competition, free from artificial restraints such as price-fixing and monopoly. The theory of regulation, on the other hand, presupposes that with respect to certain areas of economic activity the judgment of expert agencies may produce results superi- or to those of the marketplace, and that for this reason competition in a particular industry will not necessarily serve the public interest. Because of these divergent objectives, it could be, and has been, argued that whenever the Congress has established a scheme of regulation through an independent commission, it must be deemed to have determined that the antitrust laws should not apply to the industry thus being regulated. That, however, is not the law. The Supreme Court has repeatedly noted that “repeals of the antitrust laws by implication from a regulatory statute are strongly disfavored, and have only been found in cases of plain repugnancy between the antitrust and regulatory provisions.” Otter Tail Power Co. v. United States, 410 U.S. 366, 372, 93 S.Ct. 1022, 1027, 35 L.Ed.2d 359 (1973), quoting United States v. Philadelphia National Bank, 374 U.S. 321, 83 S.Ct. 1715, 10 L.Ed.2d 915 (1963). Accord, Federal Maritime Commission v. Seatrain Lines, Inc., 411. U.S. 726, 733, 93 S.Ct. 1773, 36 L.Ed.2d 620 (1973); Merrill Lynch, Pierce, Fenner & Smith v. Ware, 414 U.S. 117, 126, 94 S.Ct. 383, 38 L.Ed.2d 348 (1973); Carnation Co. v. Pacific Westbound Conference et al., 383 U.S. 213, 217-8, 86 S.Ct. 781, 15 L.Ed.2d 709 (1966); Silver v. New York Stock Exchange, 373 U.S. 341, 357-8, 83 S.Ct. 1246, 10 L.Ed.2d 389 (1963); United States v. Borden Co., 308 U.S. 188, 198-9, 60 S.Ct. 182, 84 L.Ed. 181 (1939). Regulated industries “are not per se exempt from the Sherman Act” (Georgia v. Pennsylvania R. R. Co., 324 U.S. 439, 456, 65 S.Ct. 716, 725, 89 L.Ed. 1051 (1945)), and they are not necessarily exempt even if the conduct complained of in an antitrust context has been expressly approved by the agency charged with regulating the particular industry. In United States v. Radio Corporation of America, 358 U.S. 334, 79 S.Ct. 457, 3 L.Ed.2d 354 (1959), a decision by the Federal Communications Commission specifically approving an exchange of television stations was asserted as a defense to an antitrust divestiture action. The Supreme Court rejected that contention, holding, as Mr. Justice Harlan expressed it in his concurring summary of the Court’s decision (358 U.S. at 353, 79 S.Ct. at 468), “a Commission determination of ‘public interest, convenience, and necessity’ cannot either constitute a binding adjudication upon any antitrust issues that may be involved in the Commission’s proceeding or serve to exempt a licensee pro tanto from the antitrust laws . .” See also California v. Federal Power Commission, 369 U.S. 482, 82 S.Ct. 901, 8 L.Ed.2d 54 (1962); United States v. Philadelphia National Bank, supra; Otter Tail Power Co. v. United States, supra These principles have been applied to the area of jurisdiction of the Federal Communications Commission (United States v. Radio Corporation of America, supra) and to telephone companies specifically. E. g., Industrial Communications Systems, Inc. v. Pacific Tel. & Tel., 505 F.2d 152, 156 (9th Cir. 1974); International Tel. & Tel. v. General Telephone & Electronics Corp., 351 F.Supp. 1153, 1182 (D. Haw., 1972), aff’d. in part and rev’d. in part, 518 F.2d 913, 918-20 (9th Cir. 1975); Macon Products Corp. v. Am. Tel. & Tel. Co., 359 F.Supp. 973 (C.D. Cal.1973). Regulated conduct is, however, deemed to be immune by implication from the antitrust laws in two relatively narrow instances: (1) when a regulatory agency has, with congressional approval, exercised explicit authority over the challenged practice itself (as distinguished from the general subject matter) in such a way that antitrust enforcement would interfere with regulation (Pan American World Airways v. United States, 371 U.S. 296, 83 S.Ct. 476, 9 L.Ed.2d 325 (1963); Gordon v. New York Stock Exchange, 422 U.S. 659, 95 S.Ct. 2598, 45 L.Ed.2d 468 (1975); United States v. National Association of Security Dealers, 422 U.S. 694, 95 S.Ct. 2427, 45 L.Ed.2d 486 (1975)), and (2) when regulation by an agency over an industry or some of its components or practices is so pervasive that Congress is assumed to have determined competition to be an inadequate means of vindicating the public interest. Otter Tail Power Co. v. United States, supra, 410 U.S. at 373-78, 93 S.Ct. 1022; United States v. National Association of Security Dealers, supra; Silver v. New York Stock Exchange, supra. Gordon v. New York Stock Exchange, supra, upon which defendants heavily rely, and United States v. National Association of Security Dealers (NASD), supra, decided the same day, are the most recent Supreme Court expressions on the kind of analysis that must be applied in determining when an antitrust suit will lie against a member of a regulated industry. Gordon was an action brought by small investors who challenged a system of fixed stock exchange commission rates sanctioned by the SEC. In its decision, the Court reaffirmed what it had held many times before: that repeal of the antitrust laws is not favored; that repeal will be implied only where there is a plain repugnancy between antitrust and regulatory provisions and then only to the minimum extent necessary; that in the absence of regulatory supervision there can be no conflict; and that both the presence of a pervasive regulatory scheme and the existence of regulatory action under a specific regulatory provision are factors in finding a repeal of the antitrust laws by implication (422 U.S. at 682-689, 95 S.Ct. 2598). The Court then went on to find regulation by the SEC to be such regulatory action, and section 19(b)(9) of the Securities Exchange Act of 1934, 15 U.S.C. § 78s(b), which grants to the Commission review power over the fixing of commission rates, to be such a specific regulatory provision. The Court indicated that in making that determination it was heavily influenced by two factors: (1) by granting to the SEC permission to approve the fixing of commission rates after the Court’s decision in United States v. Trenton Potteries Co., 273 U.S. 392, 47 S.Ct. 377, 71 L.Ed. 700 (1927) (which had held this kind of rate fixing to be a per se violation of the Sherman Act), the Congress had made a deliberate choice to give the agency the authority to supervise self-regulation with respect to commission rate fixing (422 U.S. at 681, 685, 95 S.Ct. 2598), and (2) the Commission had “taken an active role in review of proposed rate changes during the last 15 years” (422 U.S. at 685, 95 S.Ct. at 2613). Thus it concluded (422 U.S. at 691, 95 S.Ct. at 2615), The statutory provision authorizing regulation, § 19(b)(9), the long regulatory practice, and the continued congressional approval illustrated by the new legislation, point to one, and only one, conclusion. The Securities Exchange Act was intended by Congress to leave the supervision of the fixing of reasonable rates of commission to the SEC. Interposition of the antitrust laws, which would bar fixed commission rates as per se violations of the Sherman Act, in the face of positive SEC action, would preclude and prevent the operation of the Exchange Act as intended by Congress and as effectuated through SEC regulatory activity. Implied repeal of the antitrust laws is, in fact, necessary to make the Exchange Act work as it was intended; failure to imply repeal would render nugatory the legislative provision for regulatory agency supervision of exchange commission rates. Similarly, in NASD, supra, the Court held that vertical restrictions in secondary market activities designed to maintain prices in brokerage transactions of specified mutual fund shares were precisely among the kinds of restrictions on competition that Congress might have thought were “necessitated by the unique problems of the mutual fund industry . . (422 U.S. at 729, 95 S.Ct. at 2447) when it enacted section 22(f) of the Investment Company Act of 1940, 15 U.S.C. § 80a-1 et seq. With respect to the alleged horizontal combination and conspiracy to prevent the growth of a secondary dealer market in the purchase and sale of mutual fund shares,, the Court found the SEC’s exercise of regulatory authority to be so pervasive as to confer an implied immunity. The Court held “fatal” to the government’s complaint that the SEC had consistently and for nearly 35 years approved the restrictive agreements to which the activities the antitrust action sought to curb were ancillary (422 U.S. 733-4, 95 S.Ct. 2427), and it found significant the SEC’s urging that its authority would be seriously compromised if the agreements were deemed actionable under the Sherman Act (422 U.S. at 729, 95 S.Ct. 2427) Thus, the inquiry in this case must focus upon (1) whether the activities which are the subject of this complaint were required or approved by the Federal Communications Commission, pursuant to explicit statutory authority, in a way that is incompatible with antitrust enforcement, and (2) whether these activities are being so “pervasively” regulated that an immunity from antitrust action must be assumed. In my judgment, these questions must be answered in the negative. We do not start with a clean slate, neatly balancing whether there should or should not be antitrust jurisdiction. The complaint alleges serious violations of the Sherman Act, and if the government is able to prove these allegations, it follows that a substantial violation of that fundamental charter of American economic life has occurred. The burden is on defendants to demonstrate that they or their practices were intended to be exempt or immune from the broad mandate of the Act. To carry that burden, defendants rely on the Supreme Court decisions discussed above which found certain companies to be immune from the antitrust laws based upon a degree of regulation by government agencies which, as a practical matter, left them no choice but to follow the regulatory schemes and orders. But such regulation is not present in this case. At the outset, it must be noted that two of the defendants in the instant action, Western Electric and Bell Labs, are not subject to direct regulation by the Federal Communications Commission at all. Defendants’ assertion that “each of the general charges of alleged conduct . . .relates to matters which are within the jurisdiction of the regulatory agencies” (Status Memorandum, p. 5), is contradicted by the more precise and more accurate statement of the Federal Communications Commission (Memorandum as amicus curiae, filed December 30, 1975, pp. 21-25) that it “has no direct regulatory responsibility for . Western Electric and Bell Laboratories,” although it may indirectly affect them through its determinations of the reasonableness of expense and rate base items claimed by AT&T. See Smith v. Illinois Bell Telephone Co., 282 U.S. 133, 51 S.Ct. 65, 75 L.Ed. 255 (1930). Legislative history over the years shows that congressional concern over AT&T’s intra-corporate structure never matured beyond directing the Federal Communications Commission to conduct a study. Once that study was completed (Federal Communications Commission, Report on the Investigation of the Telephone Industry in the United States, H.R.Doc. No. 340, 76th Cong., 1st Sess. (1939)), Congress took no further action, nor was the Commission given authority to take further action. Consequently, it has been the Federal Communications Commission’s consistent position that it has no authority to alter, regulate, or otherwise to interfere with AT&T’s internal structure, including its relationships with Western Electric and Bell Labs. See Federal Communications Commission, Report on the Investigation of the Telephone Industry in the United States, supra, at 487-589; Consent Decree Program of the Department of Justice, Hearings before the Antitrust Subcommittee of the House Committee on the Judiciary, 85th Cong., 2d Sess. Part II-Vol. II (1958); Consent Decree Program of the Department of Justice, Hearings before the Antitrust Subcommittee of the House Committee of the Judiciary, 85th Cong., 2d Sess. Part II-Vol. Ill (1958); Antitrust Problems of the Space Satellite Communications System, Hearings before the Subcommittee on Antitrust and Monopoly of the Senate Committee on the Judiciary, 87th Cong., 2d Sess. 281 (1962); AT&T Charges for Interstate Telephone Service (Phase II), 64 FCC.2d 1 (1977), pp. 15, 18, 20, 27; and see International Tel. & Tel. Co. v. General Telephone & Electronics Corp., 518 F.2d 913 (9th Cir. 1975). Beyond broad general statements, defendants have cited nothing to the contrary. In view of this history, it is difficult to see on what basis Western Electric, Bell Labs, or the relationships involving them, could be considered immune from the antitrust laws on any theory. AT&T’s Long Lines Department and the Bell Operating - Companies are in a somewhat different posture, for they are subject to FCC regulation in a variety of ways, and the Commission has to a substantial extent exercised this authority. See, e. g., Specialized Common Carrier Services, 29 FCC.2d 870, 31 FCC.2d 1106 (1971), aff’d. sub nom., Washington Utilities and Transportation Commission v. Federal Communications Commission, 513 F.2d 1142 (9th Cir. 1975), cert. denied sub nom., National Association of Regulatory Utility Commissioners v. Federal Communications Commission, 423 U.S. 836, 96 S.Ct. 62, 46 L.Ed.2d 54 (1975); MCI Communications Corp. v. Am. Tel. & Tel. Co., 496 F.2d 214 (3rd Cir. 1974). But there is nothing in either the Communications Act or the related statutes to suggest that, with respect to the activities and relationships which are significant to this case, Congress intended to vest in the Federal Communications Commission such pervasive regulatory authority as to override antitrust considerations, nor is there anything to indicate that the antitrust laws are incompatible with the operation of these regulatory statutes as intended by the Congress. The situation here is thus considerably different from that presented in Gordon v. New York Stock Exchange, supra. In Gordon the Supreme Court said that the antitrust laws could not be applied where the Congress had given the Securities and Exchange Commission exclusive jurisdictiortto supervise the fixing of rates of commission for transactions on the stock exchanges and where the Securities and Exchange Commission had in fact exercised that jurisdiction. By contrast, the Federal Communications Commission has not been granted exclusive jurisdiction over what may be called the interconnection areas, but by statute shares that jurisdiction with the courts. 47 U.S.C. § 406. More importantly, the regulatory charter of the Commission itself, while broad in many respects, is at the same time relatively weak. For exampié, telephone tariffs — a primary regulatory tool — become effective upon filing by the carrier after 90 days notice without the necessity for Commission scrutiny or approval (47 U.S.C. § 203(b)(1)); a carrier may file a new or revised tariff at any time (47 U.S.C. § 204); and the power of the Commission to suspend a tariff is limited to a five-month maximum (47 U.S.C. § 204). The weakness of the regulatory scheme is reinforced by a volume of tariff filings beyond the capacity of the Commission to handle. During the 12-month period from September 1974 through August 1975, the Commission received 1,371 tariff filings totaling 11,491 pages, and because of this volume, it was able to investigate only a small percentage of the tariffs. Thus, it is not surprising that the Commission has concluded that “rate filings generally proceed from the carrier’s independent judgment. . . . ” Memorandum of FCC, filed December 30, 1975, pp. 19-20. The statutory weaknesses, the general inability of the Commission to scrutinize all the tariffs submitted to it, and perhaps other factors (e. g., the lack of adequate resources effectively to regulate AT&T, a corporate giant), have produced the result of a far less than pervasive or specific regulation of the areas that are critical’to this case. In any event, whatever the reasons, it is clear that regulation of defendants’ conduct has not been such that this antitrust action would disturb or interfere with it. The FCC — unlike, for example, the SEC in the stock exchange cases — has consistently taken the position that antitrust enforcement through court action is not precluded in this area. In the Matter of Amendment of Subpart F of Part 1 of the Commission’s Rules, 42 FCC 905, 906, 910-912 (1959); In the Matter of the Applications of the Connecticut Water Co. & Woolridge Bros., Inc., 25 FCC 1367, 1378 (1958). In its memorandum filed with the Court in this case on December 30, 1975, the Commission noted (p. 27): To the Commission’s knowledge, no court has ruled that the regulatory jurisdiction of the FCC and/or state agencies has ousted entirely the antitrust jurisdiction of the district courts. Several courts have expressly rejected that argument, and have held that primary jurisdiction referral is the appropriate accommodation . . The Commission has accepted primary jurisdiction referrals in many cases, has resolved the issues referred for its consideration, and has certified back the results for the courts’ ultimate determination . . This procedure has satisfactorily accommodated the regulatory requirements, and the Commission believes it to be preferable to total ouster of the antitrust courts. Among the considerations it cited in support of its position, the Commission stressed, inter alia, that, while under section 214 of the Communications Act, 47 U.S.C. § 214, it has exclusive market entry authority, antitrust actions not only do not necessarily conflict with that authority, but might even complement it in appropriate circumstances; the courts and the Commission have concurrent responsibilities, but when there is a conflict, the doctrine of primary jurisdiction is adequate to resolve the matter; the Commission has never considered its authority over equipment interconnection to displace the antitrust laws; and even with respect to tariffs, since, as noted supra, they often become effective without Commission scrutiny or approval, the courts appropriately exercise antitrust jurisdiction. An examination of the complaint in this proceeding against the implied immunity doctrine and its philosophic underpinnings verifies the Commission’s conclusion. The allegations of the complaint describe conduct that quite obviously was not stimulated by regulatory supervision or coercion; it is of a character that reflects defendants’ business judgment that its profits might be maximized if potential competitors were discouraged from entering the various markets AT&T controls. See Federal Maritime Commission v. Seatrain Lines, Inc., supra, 411 U.S. at 733, 93 S.Ct. 1773; Otter Tail Power Co. v. United States, supra, 410 U.S. at 374, 93 S.Ct. 1022; Silver v. New York Stock Exchange, supra. According to the complaint, defendants have chosen to engage in a variety of predatory activities designed to shut out potential competitors from the telecommunications markets, including the denial to competing entities of interconnection privileges with AT&T’s monopoly facilities; unlawful rate adjustments in response to competition; refusal to permit telephone customers to provide their own terminal equipment and to interconnect it to AT&T’s network; and perpetuation of various production and marketing practices designed to curb competition. There is absolutely nothing to suggest that Congress expected the Commission to require or approve, or that the Commission did require or approve any of these practices. These- activities not only violate the antitrust laws but they are also inconsistent with the purpose of the regulation, or at the very least they are not required or encouraged either by regulatory theory or by regulatory action. In such a posture, the abstract philosophical differences between regulation and competition will hardly serve to oust the antitrust laws from their normal function and effect. The purpose of the implied immunity rule is to eliminate adherence to antitrust standards when there are irreconcilable differences between the antitrust laws and federal regulatory statutes. But the antitrust laws cannot be held hostage to a supposed irreconcilability between antitrust and regulatory enforcement when no such irreconcilability exists in fact, nor can the alleged unlawful actions of defendants be deemed protected from the Sherman Act by the cloak of generalized regulation of AT&T by the Commission. In short, it would be a gross misconception of the realities to equate the instant statutory scheme, the relatively weak regulatory controls which have implemented that scheme, and defendants’ alleged activities which offend both the antitrust laws and the regulatory purposes, with the kind of explicit regulation endorsing industry conduct which the Supreme Court has held in relatively few instances to be inconsistent with antitrust enforcement. There is another, alternative basis for reaching the same conclusion. This complaint alleges a broad conspiracy to monopolize various aspects of the telecommunications industry through a symbiotic relationship among AT&T, Western Electric, Bell Labs, and the Bell Operating Companies (see p. 1350, supra). Even if it be assumed, arguendo, that the Commission exercised explicit regulatory authority over some segments of the activities challenged in the complaint, it does not follow that defendants are immune from antitrust liability even with respect to them. Defendants’ purpose is alleged to be the monopolization of the telecommunications service and equipment market, and the bulk of their conduct, including that revolving around Western Electric and Bell Labs, cannot under any reasonable view be regarded as immune from antitrust enforcement by virtue of regulation. In that circumstance, the remainder of the challenged conduct is likewise subject to antitrust consideration, both because it constitutes a means for achieving an unlawful end (California Motor Transport v. Trucking Unlimited, 404 U.S. 508, 515, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972) ), and because it represents one facet of a larger monopolistic scheme. See Carnation Co. v. Pacific Westbound Conference, 383 U.S. 213, 222, 86 S.Ct. 781, 15 L.Ed.2d 709 (1966); Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 82 S.Ct. 1404, 8 L.Ed.2d 777 (1962); Ricci v. Chicago Mercantile Exchange, 409 U.S. 289, 316, 93 S.Ct. 573, 34 L.Ed.2d 525 (1973) (Marshall, J., dissenting). According to the government (Brief in Am. Tel. & Tel. Co. v. United States, No. 77-1109 (D.C.Cir.), pp. 5-6), defendants dominate three markets — long distance transmission, equipment manufacturing, and local franchise monopolies — and they use the leverage from their control of each to defend and support their monopoly position in the other two. It is precisely in this kind of situation, that the doctrine of primary jurisdiction is most useful, and this Court is fully prepared to refer appropriate issues to the FCC under that doctrine (see note 45, infra). But it would subvert the purposes of the antitrust laws totally to sever from the case and to refer to the Commission some of the issues on the theory that it has exclusive jurisdiction when the consequence of such a referral would be that a significant portion of what is alleged to be one comprehensive, integrated, and mutually supporting conspiracy could never be considered by the courts. See Georgia v. Pennsylvania Railroad Co., 324 U.S. 439, 65 S.Ct. 716, 89 L.Ed. 1051 (1945). This would then leave the courts with a truncated antitrust action — a result that would stand the principle of careful non-interference between legitimate regulatory and antitrust enforcement on its head. While it is not necessary here to rely directly upon these “comprehensive monopoly” principles in adjudicating the jurisdictional issue, they provide additional and alternative support for the conclusion that antitrust jurisdiction has not been ousted by the regulatory scheme. For these reasons, the Court rejects defendants’ contention that the Court lacks antitrust jurisdiction over the matters alleged in the complaint. However, in the event that it should subsequently appear after the issues have been crystallized — e. g., after discovery has been completed— that with respect to some of defendants’ conduct the Commission has special expertise or there may be a conflict between antitrust enforcement and regulation, the issues relating to such conduct will be referred to the Commission under the doctrine of primary jurisdiction. But there is no basis for defendants’ continued insistence that the jurisdictional issue is not settled or that, until it is settled in their favor, it is not possible to proceed with this case in a way that is fair to both parties. The issue was decided against defendants by Judge Waddy, and his decision was not disturbed either by the U. S. Court of Appeals or the U. S. Supreme Court. Upon careful reconsideration, this Court again reaches the conclusion that it has jurisdiction of this action and that no part of this case is within the exclusive jurisdiction of the Federal Communications Commission. II Defendants have submitted a proposed order providing that “the plaintiff in this case is the government of the United States of America including all of the departments, agencies, bureaus, and other subdivisions thereof from which defendants have sought recovery.” The effect of this order, if adopted by the Court, would be to subject all agencies and departments of the government to discovery under Rule 34 of the Federal Rules of Civil Procedure. .The Department of Justice argues that only it is a party, and that discovery from other government agencies and departments must proceed under the more restrictive provisions of Rule 45, F.R.Civ.P. The question that is raised by these opposing positions is “who is the plaintiff?” It should be noted at the outset that some discovery has been and is being secured to a limited extent from government agencies other than the Department of Justice. On April 27, 1978, Magistrate Margolis, with the consent of the parties, entered Discovery Order No. 2, paragraph 4 of which requires some forty government agencies to respond to the following questions: (i) whether they will produce the documents designated in their entirety for inspection and copying; (ii) whether they object in whole or in part to defendants’ designation and the reasons therefor; (iii) whether they will submit disputes over production of documents to the Magistrate for resolution without formal service of a subpoena; and (iv) whether they will submit claims of privilege to the Special Master or the Court for resolution. Generally, the agencies responded by stating that (i) they would not produce the documents in their entirety; (ii) they had objections to various aspects of the discovery sought; (iii) they would submit disputes over production to the Magistrate without formal service of a subpoena; and (iv) they would submit claims of privilege to the Special Master or the Court. Plaintiff contends that the present arrangement, together with whatever discovery defendants may be able to secure under Rule 45, adequately protects defendants’ interests, and that therefore it is not necessary to decide the issue posed by defendants’ proposed pretrial order. This position is not well taken, for a number of reasons. First. The Department of Justice suggests that the voluntary system is working and will continue to work well. Yet it is apparent that problems already exist in the operation of that system, and these are likely to become magnified in the future. One difficulty is that the present procedure is cumbersome in view of the numerous agencies involved, the sheer size of the discovery requests addressed to them, and the fact that defendants are forced, more or less, to depend upon the good offices of the Department of Justice to secure this discovery. Another, perhaps potentially even more serious, drawback is that the voluntary system permits each agency to continue to view itself as a distinct entity with individual interests which do not necessarily parallel those of the government as a whole in the prosecution of this suitl Not only does this place practical burdens on defendants, but it adds an awkward tension to discovery. AT&T requires each agency’s full cooperation to obtain the discovery it needs, and if the agencies were to be considered part of the plaintiff in this action, it would be entitled to that cooperation as a matter of right. But if the agencies are not included in the concept of “plaintiff,” there is no such entitlement, and since the agencies (other than the Department of Justice) may have little to gain by their cooperation, whether by discovery or otherwise, they would be likely to limit the level of their participation in voluntary discovery to the minimum dictated by their own parochial interests. Second. When dealing with the government, effective sanctions are not available for noncompliance with requests under Rule 45. The only real sanction contemplated by that Rule is contempt of court, and it is normally available only against the head of an agency rather than a subordinate. United States ex rel. Touhy v. Ragen, 340 U.S. 462, 71 S.Ct. 416, 95 L.Ed. 417 (1951); Boske v. Comingore, 177 U.S. 459, 20 S.Ct. 701, 44 L.Ed. 846 (1900); Appeal of United States Securities & Exchange Commission, 226 F.2d 501 (6th Cir. 1955). Thus, should government departments be or become reluctant to produce records at any stage during this litigation, the Court’s only remedy, if it intended to protect defendants’ rights, would be to hold high officials in wholesale contempt. Whatever might be the theoretical amenability of heads of government departments to the Court’s contempt power, in the context of its possible application to many officials in a great number of potential discovery disputes that power would undoubtedly prove to be an extremely blunt and unwieldy, and hence impractical, instrument. Third. Rule 34 is a more manageable discovery mechanism than Rule 45 in a number of different respects. In the first place, under Rule 34, the parties proceed by request, without leave of the Court; discovery is limited only by the relevancy requirements of Rule 26(b)(1), F.R.Civ.P.; and the Court becomes involved only when production is objected to or there is noncompliance. See Rule 37, F.R.Civ.P. While Rule 45 discovery is likewise initiated by request of a party, a subpoena will issue only through, the Clerk under seal of the Court. Moreover, the person to whom the subpoena is directed may move to quash it on grounds that it is unreasonable or oppressive, even if the material is otherwise relevant within the meaning of Rule 26. See Collins and Aikman Corp. v. J. P. Stevens & Co., 51 F.R.D. 219, 221 (D.S.C.1971); Wright and Miller, supra, Civil § 2457, pp. 433-4. When a department is considered a party, the scope of governmental privileges it may claim is narrower than when it is not. Cf. Moore’s Federal Practice, supra, paras. 26.60[6], 26.61[6.-1]; Fleming v. Bernardi, 1 F.R.D. 624 (N.D.Ohio 1941); United States v. General Motors Corp., 2 F.R.D. 528 (N.D.Ill.1942). Rule 45 could also be more expensive, since the Court may condition denial of a motion to quash upon an advancement of costs by the party on whose behalf the subpoena is issued. Rule 45(b)(2); United States v. International Business Machines Corp., 62 F.R.D. 526, 528-9 (S.D.N.Y.1974); Blank v. Talley Industries, Inc., 54 F.R.D. 627 (S.D.N.Y.1972). In this litigation, where defendants will have to undergo the expense of producing millions of their own documents, Rule 45 discovery might saddle them in addition with the expenses connected with the production of millions of documents from various government agencies. Finally, the logistics of proceeding by subpoena against forty or more government agencies may be expected to be cumbersome. See, e. g., Freeman v. Seligson, 132 U.S.App.D.C. 56, 82, 405 F.2d 1326, 1352 (1968). Fourth. This litigation and its discovery phase are likely to be protracted, and there is no assurance that the voluntary commitments of the several agencies and departments, such as they are, will stand the test of time. Discovery will take many months at a minimum (pp. 1344-1346, infra), and it is not unlikely that demands will be made which some agencies and departments will find uncomfortable. The temptation to renege on or further to condition the present voluntary arrangement will then be great, and endless, multifaceted disputes and concomitant delays are likely to ensue. For those reasons, defendants are entitled to a decision on their request for Rule 34 discovery, and hence the issue of who is the plaintiff in this case cannot be avoided. There is surprisingly little law on the question of whether, for discovery purposes in an action instituted in the name of the United States the plaintiff is the Department of Justice or some broader entity. There are a few scattered decisions in the criminal area, involving the discovery mechanisms recognized by the Jencks Act (18 U.S.C. § 3500) and by Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), which, while not dispositive, are certainly instructive. Typical of these criminal cases is United States v. Bryant, 142 U.S.App.D.C. 132, 140, 439 F.2d 642, 650 (1971), where the Court of Appeals for this Circuit, in a case involving possession of evidence by the Bureau of Narcotics and Dangerous Drugs, held that this evidence was producible under the Jencks Act because “the duty of disclosure affects not only the prosecutor, but the Government as a whole, including its investigative agencies.” See also United States v. Deutsch, 475 F.2d 55 (5th Cir. 1973); United States v. Ehrlichman, 376 F.Supp. 29, 36, 389 F.Supp. 95, 97 (D.D.C.1974); Christoffel v. United States, 91 U.S.App.D.C. 241, 200 F.2d 734 (1952); cf. United States v. Burr, 25 Fed. Cas. 187, 191 (D.Va.1807). The Department of Justice relies to the contrary on such decisions as United States v. Dansker, 537 F.2d 40 (3rd Cir. 1976), and United States v. Trevino, 556 F.2d 1265 (5th Cir. 1977). However, it is apparent upon closer examination that these decisions do not support its argument. The documents involved in those cases were in the custody of probation officers, that is, agents of the court, rather than in that of officers of the Executive Branch. The most these cases can be said to stand for is that documents in the possession of the Judiciary or the Congress may sometimes be beyond the reach of criminal defendants (but see note 60, infra). However, the Department of Justice has produced nothing to suggest that, in criminal cases, the prosecuting entity can be anything less than the Executive Branch as a whole. There is a paucity of authority on this issue in the area of civil litigation, and there certainly has been no instance of discovery being sought or required on as broad a scale, involving as many departments of government, as in this case. However, again, the few decisions more or less in point lend at least some support to defendants’ position. See, e. g., Harvey Aluminum v. National Labor Relations Board, 335 F.2d 749 (9th Cir. 1964); United States v. IBM, 60 F.R.D. 658 (S.D.N.Y.1973), appeal dismissed, 493 F.2d 112 (2d Cir. 1974) cert. denied, 416 U.S. 995, 94 S.Ct. 2409, 40 L.Ed.2d 774 (1974); and United States v. National Broadcasting Company, 65 F.R.D. 415, 419 (C.D.Cal.1974), appeal dismissed, 421 U.S. 940, 95 S.Ct. 1668, 44 L.Ed.2d 97 (1975); cf. United States v. ICC, 221 F.Supp. 584, 589 (D.D.C.1963); Equal Employment Opportunity Commission v. Los Alamos Contractors, Inc., 382 F.Supp. 1373, 1383 (D.N.M.1974). Even aside from precedent, however, it is clear that the limited theory of the nature of the “plaintiff” advanced by the Department of Justice is unacceptable. This action, as its caption indicates, was brought not on behalf of the Department of Justice but on behalf of the United States of America. Civil enforcement proceedings pursuant to section 4 of the Sherman Act have traditionally been so instituted, presumably because the antitrust laws are of quasi-constitutional breadth and significance, and constitute a means for protecting the economic interests of the citizens of this country, not infrequently on a national scale. In the vindication of broad economic policy, it simply makes no sense to hold that the Department of Justice, which essentially is a law office, alone comprises the United States. An ambassador negotiating with a foreign government, the Secretary of the Treasury who authorizes the floating of a bond issue, a military contingent taking action on foreign soil — they all do so not on behalf of their respective departments but on behalf of this nation as represented by its government. The Attorney General, as the government’s attorney and chief law enforcement officer is, to be sure, the official responsible for instituting and conducting the criminal and civil litigation of the United States. But neither he, nor the department he heads (much less the Antitrust Division), is the United States. Indeed, the basic charter of the Department of Justice (28 U.S.C. § 519) carefully distinguishes between the Attorney General and the government by providing that “. . . the Attorney General shall supervise all litigation to which the United States ... is a party. . .” See also, 28 U.S.C. §§ 501, 516-518. Insofar as this case is concerned, it takes little speculation to conclude that it would not have been brought without consultation with government executives involved in economic policy and possibly with the White House itself, or without prior inquiry into the relationship between defendants and various government departments. Where that is true, it hardly seems reasonable to insulate the entire government, other than the Attorney General’s Office, from the direct discovery process of Rule 34. The theory of the government’s case and the relief requested are national in scope and they are likely to involve the documents and the activities of a great number of government departments. Defendants have explained (Defendants’ Status Memorandum, pp. 7-8) that “The principal purposes of defendants’ document request were to show the extent to which the Bell System’s structure and many of its practices are the result of the Government’s own policies, the extent to which the Government, as the largest user of defendants’ services, has benefited and continues to benefit from the Bell System’s structure and practices, the extent to which the Government itself has recognized that the Bell System’s horizontally and vertically integrated structure is vital to the nation’s economy and to the national defense, the nature and extent of the regulation to which defendants are subject, the regulatory policies that have led to new entry into segments of the telecommunications industry. . . . ” While the Court, of course, has not ruled on the relevance of specific requests or categories of requests for documents, it is apparent that defendants will need access to the records of many government agencies, and that fairness to them requires that such access be as unencumbered as the Federal Rules will allow. Plaintiff has expressed the fear that a precedent against its position here might encourage other litigants in other cases to rummage through the files of the entire government, and so paralyze both the work of numerous agencies and that of the courts. The short answer is that in the various respects described above, the instant case is relatively unique. The Court today holds only that on these peculiar facts, which involve massive and wide-ranging allegations, and in this peculiar action, which involves many departments and their evidence, the United States, having filed the action, cannot claim to be merely the Department of Justice. That conclusion does not end the inquiry, however, for not all of the agencies from which documents are being sought are directly a part of the Executive Branch. As noted, supra, at pp. 1332 -1333, and in such cases as Dansker and Trevino, even in criminal cases discovery does not always reach the courts (and, for the same reasons, presumably not the Legislative Department). A fortiori civil discovery may be regarded as similarly limited. But a more difficult problem is raised by defendants’ request under Rule 34 for documents in the possession of the Federal Communications Commission and other independent regulatory agencies. That request must be denied, for a number of reasons. First. There is no basis for holding that a quasi-legislative agency, which the law necessarily regards as an independent body created to execute impartial regulatory responsibilities, becomes a “plaintiff” when the Department of Justice chooses to file a lawsuit on behalf of the United States. Humphrey’s Executor v. United States, 295 U.S. 602, 55 S.Ct. 869, 79 L.Ed. 1611 (1935), settled once and for all the character of such agencies. The Court’s holding in that case may be summarized by its simple statement that “the Federal Trade Commission . . . cannot in any proper sense be characterized as an arm or an eye of the executive . . . and . . [it] must be free from executive control” (295 U.S. at 628, 55 S.Ct. at 874). This principle is firmly rooted in our laws, and has been continually reaffirmed to the present day. See, e. g., Buckley v. Valeo, 424 U.S. 1, 132-6, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976); Planning Research Corp. v. Federal Power Commission, 181 U.S.App.D.C. 33, 555 F.2d 970 (1977). As a study of regulatory agencies conducted last year by the Committee on Governmental Affairs of the U. S. Senate found: Critical to an understanding of the independent form is a recognition that the agencies were intentionally created to be somewhat apart from the rest of the government, in general, and from the White House in particular. It was no accident: Congress wanted regulatory agencies that in fact were not capable of being fully integrated into the executive branch. Study on Federal Regulation (Committee Print), prepared pursuant to S.Res. 71, Senate Committee on Governmental Affairs, 95th Cong., 1st Sess., Vol. 5, pp. 25, 30 n.17 (1977). The independence of the Federal Communications Commission from executive control is underscored by the fact that its Commissioners are appointed for fixed terms of seven years; that the terms do not all lapse at the same time; and that Commission members do not serve at the pleasure of the President. Study on Federal Regulation, supra, pp. 32-39. It is presumably also because of its independent status that the Commission’s records are by law placed within the sole “custody” of the Secretary of the Commission. See 47 U.S.C. § 412. Second. The plain fact is that a party cannot produce that which it does not have. Cf. LaChemise LaCoste v. Alligator Company, Inc., 60 F.R.D. 164, 172 (D.Del.1974). In a very real, practical sense, the FCC’s records are not in the control of either the Department of Justice or the Executive Branch. If, for example, the head'of an Executive Department refused to produce documents required to assist the Department of Justice to prosecute this litigation to its conclusion, the Attorney General could then enlist the aid of the President, who, presumably, would direct their release. Yet, in view of the independent status of a regulatory agency such as the Federal Communications Commission, and the fact that its Commissioners are not subject to removal and therefore not to discipline by the President, the agency is essentially immune from executive direction. In short, both as a conceptual and as a practical matter, the Federal Communications Commission is free from executive control and not answerable to instructions from the President or the Attorney General. To 'h.old it to be a part of the “plaintiff” herein would not only contradict over forty years of legal history, but would effectively leave the conduct of this lawsuit, and perhaps of other actions brought by the government, vulnerable to a virtual veto by one or more independent regulatory agencies. See Rule 37, F.R.Civ.P. Third. There remains a definite possibility, as noted supra, at p. 1329, that one or more issues will be referred by the Court to the Commission under the doctrine of primary jurisdiction. Treatment of the Commission as a party plaintiff might well be incompatible with its role as a decision-maker under that doctrine. Moreover, the Commission’s responsibilities as the ongoing regulator of AT&T and its competitors cannot be ignored. The treatment of documents generated in the exercise of those responsibilities will require the utmost sensitivity — a treatment for which Rule 45 discovery is particularly well suited. In memoranda submitted to the Court, the Federal Communications Commission indicated that it had “not closed the door on voluntary production” should defendants pare down their discovery requests to “reasonable levels, so that the FCC will not be unduly burdened and will not be asked to turn over obviously privileged material.” FCC Memorandum of January 23, 1978, p. 17. In the context of one or a few independent regulatory agencies, without the distractions of forty other government agencies with their babel of differing views and interests on the production question, such voluntary cooperation is likely to prove practical and meet all the legitimate requirements of defendants. Should it ultimately prove that the Commission’s response to requests from defendants is too niggardly, the defendants may always seek the assistance of the Court under Rule 45. The Court, on its own or through the Magistrate (see infra, p. 1348), stands ready to assist them to the full extent of its authority with respect to any legitimate requests. Ill Discovery Order No. 2, entered by Magistrate Margolis on April 27, 1978, requires inter alia that defendants produce for inspection and copying all microfilm copies of documents, transcripts, and exhibits produced in connection with a number of antitrust actions brought by private parties against AT&T in other districts. Defendants have appealed this order to the Court, contending that, for a number of different reasons, such a requirement is inconsistent with the spirit, if not the letter, of the Federal Rules of Civil Procedure. It is appropriate initially to articulate precisely what is currently at issue between the parties with respect to Discovery Order No. 2. The order may be read to include three types of documents generated in seven other court proceedings: (1) documents (or microfilm copies of documents) produced by AT&T to the private plaintiffs, and selected for use by the private plaintiffs, (2) documents produced by the private plaintiffs to AT&T, and (3) documents produced by third parties to AT&T, to the private plaintiffs, or to both. According to the United States, however, it seeks only those documents in the first of these three categories. Report for the United States concerning Magistrate’s Order No. 2, filed June 7, 1978. Moreover, it has actively pursued its request for production with respect to documents produced in only two of the other court proceedings. See note 91, infra. Thus, the question before the Court is whether defendants should be required in this proceeding to produce to plaintiff here copies of documents previously produced and selected for use in the lawsuits brought against defendants by Litton Systems, Inc. and MCI Communications Corp. in the Southern District of New York and the Northern District of Illinois, respectively. Defendants initially contend that the order constitutes an abuse of the discovery process, relying principally on GAF Corporation v. Eastman Kodak Company, 415 F.Supp. 129 (S.D.N.Y.1976). In the course of that antitrust case Eastman Kodak produced a great many documents, several thousand of which were produced- under a seal of confidentiality, and all of which — by agreement of the parties — were to be used “solely for the purposes of [that] litigation.” Approximately three years after the lawsuit was begun, the Antitrust Division of the Department of Justice requested from GAF certain documents that GAF had received from Eastman Kodak by means of this discovery procedure. GAF then requested permission from the court to deliver the documents. Judge Marvin Frankel denied that request and entered a protective order prohibiting the transfer. He noted that although there was little precedent on the issue, the circumstances of the case, including, inter alia, the understanding between the parties, and the lack of assurances that the Department of Justice was not seeking the documents for the purpose of bringing a criminal action against Eastman Kodak, warranted the prohibition. While such a result may well have been appropriate in the context of the GAF circumstances, it is by no means dictated here. In GAF, the government was not engaging in the discovery process as a party to that or any other litigation involving either GAF or Eastman Kodak. Quite the contrary, it sought the materials for investigatory purposes, presumably in anticipation of initiating a proceeding against Eastman Kodak. Here, on the other hand, the government seeks the documents as a plaintiff in this litigation under the mechanism of Rule 34, F.R.Civ.P. As a defendant in this litigation, AT&T’s duty to produce is squarely resolved by Rules 26 and -34, F.R.Civ.P., which provide for the production of relevant documents within a party’s possession, custody, and control. The documents here sought are, and always have been within defendants’ possession, since they are defendants’ own documents. Conceptually it makes no differenc