Recall, AT&T is in a monopoly position when the patents expire in 1894 |
| telephone displacing the telegraph |
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| 1909 - AT&T bought Western Union (sold it 4 years later) |
| 1910 - Justice Department files an anti-trust suit |
is AT&T too dominant?
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| 1913 - Kingsbury Commitment |
"universal service" pledge
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1918 - World War I |
US nationalizes the phone system
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| 1919 - peacefully returned to AT&T |
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| 1921 Graham Act |
Unified phone system worked well during the War
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Exempts AT&T from some of the anti-trust regulations
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| 1934 Communications Act |
brings telephony under the FCC for common carrier regulation
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| Note: a few AT&T advances: |
| 1896 - rotary dial |
| 1914 - first cross-continental phone call |
| 1964 - touch-tone phones |
| 1982- caller ID |
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1930s and 1940s are growth years for AT&T |
but, some concerns about phone rates
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| 1949 - Justice Department files an anti-trust suit |
"goldplating"
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| wants AT&T to sell off Western Electric |
(the first attempt to split off a part of AT&T)
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| 1956 Consent Decree |
| AT&T gets to keep Western Electric |
agrees to be restricted to telephony
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| 1956 Hush-A-Phone case |
| AT&T didn't allow "foreign attachments" to connect to the AT&T system |
small device that fit over the mouthpiece/receiver to reduce noise
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AT&T says it can't be attached to their phones
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| Note: subscribers didn't own their phones, they leased them from AT&T |
| Hush-A-Phone wins, doesn't interfere with telephone operations |
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1968 - Carterphone case |
Tom Carter invented a device to interconnect mobile car radios with the telephone network
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AT&T denies an interconnect
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Carter goes to the FCC and wins (even though the device could interfere with telephone operations)
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| 1969 - Microwave Communications Incorporated (MCI) |
has an interconnect idea
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using microwave relays to transmit long distance phone calls
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an alternative to AT&T long distance
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| FCC grants an application to provide service between St. Louis and Chicago |
1972 - MCI ready to sign up subscribers
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AT&T refuses to interconnect
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1974 - MCI files an anti-trust suit against AT&T |
Justice Department joins in
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goal - break up AT&T
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| consider the goal: |
| AT&T has $150 billion in assets, over 1 million employees, and $65 billion in annual revenues |
if AT&T were compared to other media industries
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all newspapers combined - $45 billion in annual revenues
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all broadcasters - $24 billion, all film studios - $24 billion, all cable systems - $16 billion
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if AT&T were compared to countries
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Argentina - GDP of $77 billion, Egypt $71 billion, Greece $61 billion
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| 1981 - case goes to trial |
AT&T called "an ungainly elephant with a tendency to reach out and crush someone"
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early on, it appears the Justice Department is winning |
AT&T begins to negotiate a settlement
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| 1982 Modified Final Judgment (MFJ) |
AT&T sells off the Bell operating companies (Bell South, Bell Atlantic, NYNEX, Pacific Telesis, US West, Southwestern Bell, Ameritech)
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BOCs/RBOCs (Bell Operating Companies/Regional Bell Operating Companies)
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keeps long distance
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keeps Bell Labs (which it would later spin off)
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can get into other industries
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note: at one point, AT&T was the largest cable MSO in the United States
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| 1984 - the breakup is complete |
| impact? |
innovation - cell phones, satellite phones, Internet phones
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long distance rates decrease
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local phone rates increase
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the RBOCs invest in other industries, merge, get bought out
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AT&T makes a series of bad business decisions |
| In 2005, SBC buys AT&T |
so, AT&T as a seperate entity no longer exists!
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(though SBC will still use the AT&T name)
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Cell phones and the tendency to monopoly
Verizon, AT&T, T-Mobile |