Today is the 100th anniversary of the Bell telephone system’s regulated monopoly.
Until December 1913, the Bell system, under the leadership of Theodore Vail, had aggressively absorbed smaller independent telephone companies. It refused to grant competing phone companies access to its growing network, which crushed small would-be competitors. It had also acquired Western Union, which controlled the telegraph industry. Bell dominated both the domestic telegraph and the domestic telephone markets.
In 1913, the U.S. federal government was considering nationalizing the growing Bell phone system (Britain had nationalized its phone system in 1912) or breaking up Bell’s monopoly. Clearly, the government would take antitrust action of some sort, so AT&T negotiated with the Justice Department. On December 19, 1913, AT&T Vice President Nathan Kingsbury sent a letter to the Attorney General in which AT&T agreed “to divest itself of Western Union, to provide long distance services to independent exchanges under certain conditions, and to refrain from acquisitions if the Interstate Commerce Commission objected.” (Wikipedia)
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