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3) The manufacturing restrictions have opened the U.S. market to for'eign-based firms, which have taken full advantage of the RHCs' absence. The telecommunications equipment trade balance has deteriorated from a surplus of $275 M in 1982, to a deficit of S2.6 A in 1987. our current. national policy protects many latae companies, including foreion-based firms, from full competition in domestic markets. Current policy prevents American firms from competing in America for American consumers. 4) The manufacturing restrictions Also extend to R&D, where RHCs may not. commercialize R&D results. The bottom line is that without some war to realize a return on R&D, the RHCs have li.t t.le incentive to make needed investments. Thus, the U.S. has about_70% of its economic resources in telecommunications doing little or no R&D, while America's technoloaicai and economic leadership in the world declines. MODIFICATION OF FINAL JUDGMENT (MFJ) RZ8TRICT20NSt IT'S TIME TO LET OP 1. American consumers erre being denied the full benefits of the Information Age because the Bell holding companies are prohibited by MFJ from offering vital services. --Countries such as France are taking the lead in high tech information services, over 8800 information services are available to over four million households in France. 2. America's international trade position is being seriously harmed by MFJ restrictions. --In 1952, America boasted a $580 million trade surplus in telecommunications, products and service@. By the end of 1988, this had changed to a trade deficit of almost $2 billion. The U. S. Commerce Department estimates this deficit could grow to over $7 billion by 1995. --A German company, Siemens Corporation, has become the largest manufacturer of PBX telecommunications terminal equipment. in the world. --The largest total telecommunications company in the world is Nippon Telephone and Telegraph, a Japanese corporation. 3. The MFJ restrictions severely discourage research and development by the Bell holding companies because the companies cannot profit from the results of their research. --At the and of 1987 foreigners were receiving almost half of the U. S. patents awarded, a dramatic change from 1980 when only 36% of the patents were awarded to foreigners. 4. Consumer protection safeguards are now stronger than ever. --Regulatory safeguards, and competition are effective protections against potentially anticompetitive activities. The seven Bell holding companies already compete against each other in a number of businesses including yellow pages directory sales and cellular services. DEC 41990 39