The Economics of Innovation in the Telecommunications Industry

By John R. McNamara | Go to book overview
Save to active project

CHAPTER 4
The Telecommunications Industry Since 1984

AT&T had successfully fought antitrust litigation for almost a century, arguing that, as a natural monopoly, it was properly treated as a fully regulated public utility and that it was therefore immune from prosecution under antitrust legislation. The Department of Justice had filed an antitrust complaint against AT&T in 1949, but the company was successfully defended by the FCC, which argued that it had effective control over all aspects of AT&T's pricing ( Henck and Strassburg 1988, 190-191).

By the early 1970s, the emergence of economically viable competitors, the prospect of rapid technological advances under competition and the growing evidence that much of the telecommunications industry did not have the characteristics of a natural monopoly, had all weakened AT&T's case.

The final series of events leading up to the divestiture of the Bell operating companies (BOCS) from AT&T began on November 20, 1974, with the filing of an antitrust suit by the Department of Justice, many private lawsuits alleging illegal business practices having already been filed against the company. The Justice Department charged that AT&T used its market dominance and control of local service "bottlenecks" to suppress competition and increase its monopoly power. Justice sought the divestiture of the BOCs and Western Electric from AT&T.

AT&T responded to the federal suit with its traditional argument that it was immune from antitrust suits because it was pervasively regulated at the state and federal levels, and requested that the suit be dismissed. The suit was not dismissed, and preparations for trial began. The Justice

-41-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited page

Bookmark this page
The Economics of Innovation in the Telecommunications Industry
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen
/ 198

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?