In the early part of the twentieth century, the general idea was that all Americans should have phone service. The other general idea regarding phone service was that the government should assist in promoting this as well. As a result of these general ideas the telecommunications industry became a natural monopoly. AT&T, which traces its routes to the founding of the telephone, promoted a Single Policy, Single System geared towards Universal Service. Thus by 1920, AT&T emerged as the dominant telecommunications company. Until 1934 AT&T was highly regulated by the states with price control per the government's request to protect consumers from abuses often associated with monopolies. The Telecommunications Act of 1934 created the Federal Communications Commission, which took regulation to the federal level.
AT&T retained its natural monopoly status for years until the government realized that AT&T was partaking in monopolizing the telecommunications industry with no controlling factors. The problems began with the accusation that AT&T practiced illegal exclusion because they only purchased equipment from Western Electric. This was the first of two anti-trust suits against AT&T. As a result of the suit United States vs. Western Electric filed in 1949, AT&T retained ownership of Western Electric with the restriction and promise of not entering into the computer industry.
The second anti-trust suit filed in 1974, United States vs. AT&T, had two major issues. The first was that AT&T's relationship with Western Electric, which AT&T retained in the 1956 settlement, was illegal. The second issue ignited by MCI who was attempting to penetrate the large business market was the fact that AT&T monopolized the long distance...
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...ons Act of 1996. The most recent of these mergers ends the era of one of the last of the Baby Bells Bellsouth who is in the process of being acquired by AT&T, formerly SBC Communications,
(1996). Telecommunications Act of 1996, Pub. LA. No. 104-104, 110 Stat 56. Retrieved June18,2006, from http://www.fcc.gov/telecom.html
(2006, June 16,2006). A Brief History: The Bell System. Retrieved June 19,2006, from http://www.att.com/history/history3.html
Economides, N. (1998, September 1998). The Telecommunications Act of 1996 and its Impact. Retrieved June 18,2006, from http://raven.stern.nyu.edu/networks/telco96.html
Reuters, (2006, June 16,2006). Appeals court backs FCC on telephone network unbundling. Retrieved June 20, 2006, from http://news.com.com/Appeals+court+backs+FCC+on+telephone+network+unbundling/2100-1037_3-6084867.html?tag=sas.email
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