this offering. The language of this exception contemplates that certain economies can be achieved if an AT&T manufacturing subsidiary is permitted to produce its own component parts rather than function solely as the assembler of other manufacturer's components. However, the wording is specific in that it excepts from the paragraph's general prohibitions the manufacture but not the sale of component equipment. As we interpret this sentence, then, it means that though component equipment can be manufactured, it cannot be sold or leased unless it too is tariffable.

Any other interpretation of paragraph 4 would render it meaningless. Should Teletype be allowed to offer component equipment on a competitive basis simply because they are ingredients of a tariffed offering we might soon find Teletype selling a full-range of electronic gear, printing ribbon, spools, pedestals, furniture, cables, plugs, jacks, and virtually any item which Teletype might conceivably build into one of its tariffed products. Clearly, this is not what the framers of the 1956 Consent Decree had in mind.

Therefore, as we believe that this Teletype offering is in violation of the 1956 Consent Decree and on behalf of our member companies against whom the Teletype OEM printer unfairly competes, we request your immediate attention to this serious matter.

Sincerely,

TERRY G. MAHN, Counsel.

Mr. BRECKINRIDGE. Have you a recollection at this time with reference to any attempt to involve them to enforce the consent decree on the one hand?

Mr. TARIOT. Well, I must say my background is that of an engineer and I am rather naive in this area.

Mr. BRECKINRIDGE. Too many agencies.

Mr. TARIOT. Whatever. At least we made them aware in some depth in just the form that it was taking place, and gave them considerable data from our files in this regard. We never, to my recollection, asked them to enforce the 1956 consent decree. We were looking to their guidance as to how we, a little small company, could best seek redress in this regard.

As you probably know, in due course, Justice Department sued A.T. & T. for antitrust violations, and that was the path that apparently was chosen. I presume that we were one of many that were researched, if you will.

Mr. BRECKINRIDGE. Let me ask this question, if I may. There are two parts to it. I know the answer to part of it, but I will phrase it so you can address the whole thing.

No. 1, why did you finally sell? And No. 2, why did you sell to Honeywell rather than to a smaller competitive firm? And we won't argue about the size of Honeywell. We will just leave it. Mr. TARIOT. Well, in my market, just to make the record straight, the terminal market, I think Honeywell and Incoterm were about the same size, so that I think we each had somewhere between 2 and 3 percent of the market.

You sell to who makes you an offer, first of all, and Honeywell was an interesting company because there were complementary product lines, so there would be a good fit from a product viewpoint, and as I say, they made the offer.

Myself, as I said in the testimony, I became increasingly concerned with our ability to survive. Antitrust suits, as we know, take forever, and I just could see the scene developing where we would be less and less able to compete, and with the resources of Honeywell, we might continue to compete. There is the benefit of their distribution capability and so on, that we might continue to compete.

Mr. Chairman, I wonder if I may ask if it would be appropriate that your committee transmit a copy of our statement to Congressman Van Deerlin, in the light of the House Communications Committee's current activity, who is holding hearings on the Communications Act rewrite. We think it might be relevant to his activities. Mr. BRECKINRIDGE. The committee will make that transmittal, and as I indicated, we will also make it available to the Chairman of the Federal Communications Commission. I think when I said that, at the time I said that, I thought we were talking about the Federal Trade Commission, but in going back through your testimony, I see FCC throughout.

Mr. TARIOT. Right.

Mr. BRECKINRIDGE. And we have been talking so much about Justice and FTC, I just had that in mind.

I appreciate very much your calling this to our attention. You have reinforced here the complaints we have heard in connection with absorption in this field. Again we will keep the record open for anything you might wish to add to it.

Mr. TARIOT. Thank you.

Mr. BRECKINRIDGE. And we thank you for the time, trouble, and expense it took to be here.

Mr. TARIOT. Thank you.

Mr. BRECKINRIDGE. We stand adjourned.

[Whereupon, at 2:15 p.m., the subcommittee adjourned, to reconvene subject to call of the Chair.]