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August 01, 2017

Change with the Changing Times: 100 Years of Telecom Lawyering

By Christian F. Binnig and J. Tyson Covey

We are pleased to join in celebrating the 100th anniversary of the ABA Infrastructure and Regulated Industries Section (IRIS), the group for all the lawyers who do the mundane but extraordinarily important work of keeping the nation’s infrastructure humming. Well, actually it’s the engineers and technology experts and others who do that; we deal with the rules of the game. And when it comes to telecommunications, there are plenty.

In fact, it all started with a lawyer.

On the morning of February 14, 1876, Marcellus Bailey, attorney for Alexander Graham Bell, went to the U.S. Patent Office in Boston to file for a patent entitled “Improvements in Telegraphy,”1 arriving some four hours before inventor Elisha Gray made a filing announcing his intent to seek a patent for “the art of transmitting vocal sounds or conversations telegraphically through an electric circuit.”2 In winning the race by that slim margin, counselor Bailey helped Bell to the most valuable patent ever issued, No. 174,465.3

As we all know, however, “[t]he litigation over the telephone was just beginning on that fateful Valentine’s Day in 1876.”4 Telegraph giant Western Union, the largest company in the world at the time, turned down a chance to buy Bell’s patent rights for $100,000 in late 1876, thinking that Bell’s “electrical toy” would never have much practical use5 (even though Bell believed that “a telephone in every house would be considered indispensable”).6 But after Bell Telephone Company was formed in the summer of 1877 with seven stockholders,7 subscriptions began to soar and it became clear that telephony was the future. Western Union responded by teaming with Elisha Gray and Thomas Edison, who had invented the carbon-based transmitter that made the telephone practical for public use.8 Western Union then leveraged its massive capital and existing nationwide network of wires to rapidly outbuild the Bell Company until Bell sued for patent infringement.9 Bell won the case on November 10, 1879, and Western Union then agreed to stay out of the telephone business10 and give up its telephone patents (including on Edison’s transmitter) and its phones and subscribers in exchange for 20 percent of Bell rentals for the life of Bell’s patents.11 That was not the end, though. The Bell Company eventually had to bring more than 600 patent infringement suits,12 with the Supreme Court finally settling matters in The Telephone Cases.13 Thus, in a manner reflecting the regulatory lag that would bedevil the industry repeatedly over the next century, this first generation of telecom lawyers had to wait twelve years to get a foundational industry issue resolved.

One could try to separate the history of the telephone industry from the history of telecommunications lawyers and regulation. For example, the seven Nobel Prize winners from Bell Labs might argue that they did some important things, like creating the transistor and making modern computing possible.14 Or one might examine the phone’s pervasive cultural impact—as a comedy platform,15 as a plot device,16 or as a musical muse (witness the fifty-four full pages on Wikipedia of songs about telephone calls and twenty-four more pages of songs about telephones).17 Let’s see gas, electric, or water match that kind of influence on the imagination (railroads do pretty well in the song and movie department too, but that’s waning). And if you’re planning a family vacation, there are more than a dozen museums and archives devoted to telecommunications.18 But we’re here to reflect on an area of legal practice, one filled with fun acronyms like LATA,19 POTS,20 PANS,21 and BIAS,22 ever-changing alliances and recombinations and technology and rules, and a learning curve like Mount Everest.

Telephones initially were installed on a point-to-point, one-to-one basis, e.g., from your office to your home, as long as those points were within a few miles of each other and you hired a contractor to install the wire to connect them, and you liked just shouting into an open line until someone on the other end responded.23 But what if you wanted to talk to someone—anyone—outside your family? For that you needed a switchboard through which to exchange calls. Bell Telephone opened the first exchange in New Haven, Connecticut on January 28, 1878, connecting twenty-one subscribers over eight lines to a single operator through a manual switchboard.24 The first telephone directory (a one page list of fifty subscribers) was published a month later.25

Switchboard operators suddenly needed a standard greeting for all the strangers calling in. They settled on Thomas Edison’s proposed term “Hello,” perhaps finding it more soothing than Alexander Graham Bell’s preferred “Ahoy!” or the businesslike “What is wanted?”26 Use of an exchange also required new billing, since home-to-office lines had been flat-rated by the month or year. Bell Telephone decided that operators could easily track how long a call was connected, and thus the minute of use (MOU) was born, to the eventual delight of long-distance and switched access providers everywhere.27

Not long after, the irrepressible advance of technology led to the invention of mechanical step-by-step switching, allowing calls in an exchange to be completed by machine, with no operator assistance.28 This reduced human interaction and, eventually, reduced jobs for operators, but also created the anonymity that paved the way for prank calls,29 at least until Caller ID and *69 came along. Bell later moved to rotary dial calling, which was so new at the time that Bell had to create instructional films to teach the public how to use it.30

As this was happening, and especially after Bell’s key original patent expired in 1894,31 the Bell System expanded, but so too did all manner of competing local telephone service providers in a sort of gold rush.32 By 1902, 451 of the 1,002 cities with telephone service had two or more providers, and by 1907 the independents owned nearly as many phone stations as the Bell System. 33 Rates and profits (especially Bell’s) plummeted from the competition.34 But the Bell System still had a significant size advantage, and it often acquired such competitors, or else refused to interconnect with them or allow them access to AT&T’s long distance lines, or refused to sell them equipment.35 And then the Bell System made an even bolder stroke, consolidating with Western Union to offer combined telephone and telegraph service and allow telegrams to be sent on local and long distance telephone lines—but only on Bell System lines.36 The ensuing outcry against monopoly caught the attention of the government. In 1912, U.S. Attorney General George Wickersham advised AT&T that acquiring more independents in the Midwest would violate the Sherman Antitrust Act, and the Interstate Commerce Commission (ICC)—which had been given jurisdiction over interstate telephone service by the Mann-Elkins Act of 191037—initiated an inquiry into AT&T’s practices.38

Setting a template for the future, the Bell System chose to compromise. Vice-President Nathan C. Kingsbury reached an agreement with new Attorney General James McReynolds to dispose of the Western Union stock holdings and the telegraph business, to refrain from buying any more competing companies without ICC approval, and to allow independent telephone companies to interconnect with AT&T’s39 long distance lines.40 The two-page letter confirming these concessions was called the Kingsbury Commitment,41 thus preventing the term from ever being used as the title for a James Bond film. In return, AT&T gained the small concession of being (informally) anointed as the national telephone monopoly, albeit subject to federal regulation.42 This was in keeping with the motto AT&T had adopted under Theodore Vail, the man behind much of its vision in this period: “One Policy, One System, Universal Service.”43

So how did the Bell System grow and endure? In 1921, the Willis-Graham Act allowed consolidation of competing telephone exchanges, subject to regulatory approval.44 By the end of World War II, the Bell System owned and operated about 80 percent of local loops and all long distance lines, and its subsidiary Western Electric made the phones customers had to use, so AT&T also accounted for at least 80 percent of all customer premises equipment.45

During these decades after the Kingsbury Commitment, Bell Labs continued not only to improve the telephone network, but also to innovate in other ways. AT&T’s website has an impressive timeline of achievements and breakthroughs from new technologies to the dates for the first transcontinental, transatlantic, and transpacific calls.46 For example, led by the work of Dr. Herbert Ives, AT&T conducted the first public demonstration of television in 1927 with Secretary of State Herbert Hoover’s voice and live picture transmitted from Washington, D.C. to New York, which was followed by color television in 1929 and two-way interactive television in 1930, and years later using cable and microwave facilities to make nationwide television networks possible.47 In 1962, NASA launched AT&T’s Telstar, the world’s first active commercial communications satellite.48 But one breakthrough did not occur. In 1909, the Bell Company’s chief engineer recognized the threat of wireless voice communications and sought research funds to put Bell “in a position of control with regard to the art of wireless telephony, should it turn out to be a factor of importance.”49 Wireless, however, worked best at the time as a broadcast medium,50 so while AT&T did offer mobile telephone service in 1946 (which could handle no more than twelve to twenty simultaneous calls in an entire metropolitan era),51 it took some decades before wireless telephony developed enough to become, ahem, a “factor of importance.”52

But getting back to what matters to the lawyers, the Communications Act of 1934 transferred regulatory authority over interstate communications from the ICC to the newly formed Federal Communications Commission.53 Based on the premise that telephone service was a natural monopoly, the FCC (and state regulators) proceeded over the next several decades to focus heavily on universal service, leading to a regime of cross-subsidies—the kind that made generations live in fear of the cost of a long distance call—in order to keep local, residential service as cheap as possible. The apocryphal rule of thumb was the Pizza Test, i.e., the idea that a month of basic residential voice service should cost no more than a medium pizza with two toppings.54 The regulators generally did this by using rate-of-return regulation as they did for other essential utility services, like gas or electric service. A complicating factor, of course, was allocating and separating costs for the same network and lines between intrastate and interstate services, an issue tracing back to Smith v. Illinois Bell Telephone Co.55 and reflected in the 1934 Act in 47 U.S.C. § 152(b). Separations rules, in turn, would determine the size of a carrier’s rate base, and therefore its rates, within each jurisdiction. The regime of cross-subsidies and cost separations, as well as technical advancements, eventually helped create a Bell System “price umbrella” that made targeted competition (or “creamskimming,” depending on your perspective) possible in certain services.56

In 1949, the Department of Justice (DOJ) filed another antitrust suit against AT&T, alleging it had a captive monopoly in the phone equipment business and seeking to make it divest its telephone equipment manufacturing arm, Western Electric. AT&T again compromised to avoid divestiture, and the suit was resolved by a 1956 consent decree known as the Final Judgment (remember that name) in New Jersey federal court. AT&T got to keep West ern Union but agreed not to enter the computer business, which was in its infancy and did not seem headed anywhere fast.57

In the 1960s and 1970s, profit-seeking entrepreneurs, facilitated by technological change and niche opportunities created by the complex system of interservice and interjurisdictional telephone subsidies, began finding ways to compete with Ma Bell. In 1956, the D.C. Circuit decided the Hush-A-Phone case, upholding “the telephone subscriber’s right reasonably to use his telephone in ways which are privately beneficial, without being publicly detrimental”—which meant one could attach a small cup to the mouthpiece of a phone to reduce background noise.58 This eventually paved the way for the FCC’s 1968 Carterphone decision allowing another non-Bell device to be used at the end of the line,59 which in turn paved the way (after much more legal wrangling, because change is never easy) to allowing consumers to connect other “foreign attachments”—such as telephones not leased from or made by AT&T—to the public network.60 The foreign attachments did not crash the network, new manufacturers anticipated Steve Job’s concept of the telephone as high-concept art design by releasing the Sports Illustrated football phone61 and the like,62 and new markets opened for answering machines, fax machines, etc.63 And in 1971, the FCC’s Specialized Common Carrier decision allowed competition in the middle of the network rather than just the customer premises, permitting alternative carriers to have access to the incumbent’s central office to connect their services to their customers using the public switched telephone network and provide long-distance “intercity” private lines.64

Then came 1974 and the DOJ’s third major antitrust lawsuit seeking to break up AT&T. By the time that case settled with the Modification of Final Judgment (MFJ) in 198265 and the 1984 divestiture of the Baby Bells (RBOCs if you want to sound tougher), competition was already finding solid footing. Upstart Microwave Telecommunications, Inc. (MCI)—which even its founder referred to at the time as a “law firm with an antenna on top”66—had helped introduce long-distance competition by winning a few key decisions from the FCC67 and temporarily securing a $1.8 billion antitrust judgment against AT&T.68 By the time the DOJ case settled, AT&T was facing more than 60 antitrust lawsuits around the country.69 (Somewhat bittersweetly from its perspective, not long after signing the MFJ, AT&T won every issue in a 600-page decision in such a case brought by Sprint, prevailing on many of the core theories it had pressed in the DOJ and MCI cases).70

If a new generation of telecom lawyers was being born through such litigation, the MFJ gave it a boost of adrenaline. Since many key telecom issues already subject to state and federal regulation now also fell within the purview of Judge Harold Greene (rightly or wrongly viewed as acting as a one-man FCC), the telecom legal industry took off, because both the Baby Bells and non-Bell challengers like MCI and Sprint, along with industry groups and consumer groups realizing the significance of such issues, needed good lawyers fast.71 MFJ litigation became a cottage industry, with related proceedings at the FCC and in the states, as the Baby Bells immediately chafed at the MFJ’s restrictions on what lines of business they could enter and “enhanced services”—data—became ever more important.72

The 1980s and 1990s also saw the transition from rate-of-return regulation toward price-cap or other alternative forms of rate regulation, as well as a push for detariffing of some services. This was another change driven by technological advancement and the growth of competition, as well as refinements (originating in Europe) in the economic theories underlying rate regulation. Price-cap regulation decoupled rates from costs and typically relied on some external measure, such as an inflation factor and an “efficiency” factor, to determine caps. In doing so, it gave carriers incentives (or imperatives) to increase efficiency in hopes of capturing the gains.

Then came the federal Telecommunications Act of 1996, the long-debated compromise legislation that terminated the MFJ73 and reconfigured the telecom industry for a competitive era. The 1996 Act billed itself as “the most deregulatory [law] in history,”74 and the leading treatise said the 1996 Act “will likely be remembered as the most important piece of economic legislation of the twentieth century.”75 Important it was and deregulatory it intended to be, but it was not simple. Justice Scalia wrote that “[i]t would be gross understatement to say that the 1996 act is not a model of clarity. It is in many important respects a model of ambiguity or indeed even self-contradiction.”76 It was reported that shortly after the signing ceremony of the 1996 Act on February 8, 1996, “one senator who backed the legislation took FCC Chairman Reed Hundt aside. ‘We gave one side everything they wanted, and then we gave the other side everything they wanted,’ the senator said, according to Hundt. ‘Good luck.’”77 And it may not have helped that the FCC was given just six months to issues rules implementing the most critical provisions of the Act. As a result, the 1996 Act and its initial implementing orders and rules were effectively a full-employment mandate for telecom lawyers, at least for several years. One of the authors recalls being handed the FCC’s 668-page August 8, 1996 Local Competition First Report and Order and being told “read this, you’ll need to know it for the interconnection agreement arbitrations.” Indeed—and if only it had been that simple.

Required to negotiate and/or arbitrate interconnection agreements to open the door to local competition, the Baby Bells and largest CLECs like AT&T, MCI, and Sprint ended up taking their arbitration shows on the road, travelling from state to state to re-debate the same 100 or 200 interconnection, collocation, unbundling, resale, and intercarrier compensation issues before each public utilities commission, with separate TELRIC rate cases in most states as well.78 Meanwhile, that task was complicated by the successful court challenges to the FCC’s Local Competition order and others, leading to major resets and relitigation of key interconnection-agreement issues over the years. War stories from the warp-speed and high-stakes battles to implement the FCC’s Triennial Review Order (its third iteration of unbundling rules) state by state (until it too did not fully survive appeal) could undoubtedly fill a book. The results of many of those arbitration decisions ended up in federal district courts as well, which had to decide what was preempted and what was just “cooperative federalism,” as well as follow the bouncing ball from FCC decision to FCC decision (Local Competition Order to UNE Remand Order to Triennial Review Order to Triennial Review Remand Order) and the changing alliances as mergers radically reshaped the industry.79 And that does not even consider the tooth-and-nail contests under Section 271 of the 1996 Act as the Baby Bells, arguing that they had sufficiently opened their local markets to competition, tried to enter the long distance market. If the MFJ gave adrenaline to the need for telecom lawyers, the 1996 Act put it on steroids.

By a decade after the 1996 Act, much of the dust had cleared, at least in some respects. Not only were the incumbent LECs well established in long distance, but thousands of local interconnection agreements were in place, TELRIC-based80 rates were established, the unbundling rules seemed set, and many state legislatures and commissions were materially scaling back or eliminating local regulation of most voice service. And today, twenty-one years after the Act, at least thirty-six states have completely or materially deregulated voice service81 and many have eliminated or materially reduced carrier-of-last-resort obligations.82 The front-line battles now involve the Internet and the convergence of industries and technologies that previously had their own regulatory silos. Yet another wave of telecom lawyers is dealing with those issues.

Of course, much of the above discussion is focused on wireline voice service, while the dominant services today are wireless and data services, both of which have grown up in comparatively less regulated environments. As post-MFJ disputes about landline service (and enhanced services) progressed, cellular telephony83 began to grow, subjected only to light-touch federal regulation and largely shielded from state regulation by the passage of 47 U.S.C. § 332 in 1993. Markets originally were limited to two licensed providers each, one for an affiliate of the incumbent LEC and another for an independent CMRS carrier.84 No one paid much attention at first. At the press conference announcing the AT&T divestiture, AT&T’s CEO reportedly was unable to answer which companies would inherit the cellular licenses.85 Indeed, one of the ironies of the MFJ was that in agreeing with the government on how to split its business, AT&T, not unlike Western Union almost a century before, passed on the opportunity to retain the nascent wireless telephone business, thinking the number of subscribers might someday reach a million.86 Perhaps it was not surprising for skeptics to believe the mobile phone would never spread beyond the greedy hands of Gordon Gekko87 and spendthrift yuppies willing to pay $4,000 for 2.4-pound “brick” device,88 but spread they did. After divestiture left the incumbent LEC affiliate cellular licenses in the hands of the Baby Bells, AT&T Corp. eventually had to spend $11 billion in order to buy McCaw Communications in 1994 and get the assets it needed to enter the wireless game.89

The FCC issued more cellular licenses to boost competition in the mid-1990s and has continued to auction spectrum and seek to promote mobile service deployment ever since, while following a generally deregulatory approach. The growth of wireless services since the mid-1990s has been explosive and the advent of smartphones, including the iPhone in 2007, was yet another game-changer. At the end of 2010, there were only about 70,000 devices in the United States with “fourth generation” Long Term Evolution, or LTE, wireless connections, but by mid-2014 there were more than 127 million such devices.90 And by the end of 2016, it was estimated that more than 50 percent of households in the United States had cut the cord on landline voice service and were wireless-only.91 Today there are more mobile communications devices in the United States and in the world than there are people92 and more data traffic than voice traffic.93 Modern mobile devices are a computer/TV/telephone in one, bringing endless information and entertainment to one’s fingertips with purportedly more computing power than NASA had when putting people on the moon in 196994 and more than 100 times the computing power of today’s average satellite.95 Today’s devices are so mobile that we don’t even need hands to use a handset; Bluetooth finally has made it acceptable to wander the streets waving your arms and mumbling to (or shouting at) yourself.


* * *


So what might the next 100 years hold for communications law and lawyers? That’s probably a question best left to science fiction writers, since the technology 100 years from now will almost certainly be unlike anything we can imagine today. It will certainly be “better”—better and even more mobile coverage, better handsets (if we even use handsets as opposed to bio-integrated or implantable devices), better capabilities. But the key, overarching legal questions will likely, in broad strokes, remain the same: Is there such scarcity of supply and risk of monopoly or abuse of market power that we need regulatory agency oversight? If so, how do we allocate jurisdiction between states and the federal government? And what should be done about universal service?

On the first question there are many views. One commentator years ago called for abolishing the FCC in favor of common law, like that developed under the Bill of Rights or the Sherman Act, arguing that incremental judge-made law can best do the job by keeping things tidy at the edges while allowing markets to work.96 Other observers take a middle view, arguing that the FCC is “the least problematic institution to oversee telecommunications policy, at least for most issues within its jurisdiction,” though they would propose some reforms to current FCC authority and practices.97 Yet another commentator has proposed a result as radical as the common law path, but very different. He too would do away with the FCC, but rather than leave matters to common law would create a new agency, the Innovation Environment Protection Agency (iEPA) with a mission of “minimal intervention to maximize innovation.”98 And never forget that partisan politics or changes in views toward regulation in general (such as the heavy shift toward market-based approaches over the last several decades)99 could affect the future of the FCC and state commissions more than anything else.

Of course, those are proposals rather than predictions. Given the FCC’s expansive duties, it is difficult to imagine the FCC going away completely or that it will “forbear” itself out of existence. But it is not difficult to imagine the FCC being divided into multiple agencies with more discrete tasks. As one economist noted back in 1993 (and which is even more true today), “[t]he technological advances in telecommunications have overloaded a regulatory apparatus that was devised in the era of Prohibition and Charlie Chaplin.”100 Modern issues like the ability of regulators to manage and allocate electromagnetic spectrum will continue to challenge whatever agency is in charge. And if history is our guide, at some point there will be watershed legislation (or an antitrust remedy)—probably related to a technological advance that makes market power or competition possible where it wasn’t before—followed by more Yellow Pages-sized orders and sets of rules that will both change radically how the industry is structured and require a great deal of work to implement, all just in time for the next watershed event and accompanying tome. Lawyers and regulators alike probably always will be playing a game of catch-up as technology and consumers stay one step ahead.

Assuming regulatory agencies continue, allocating jurisdiction will likely remain as thorny as ever unless the feds simply decide to occupy the field. That seems entirely possible, since FCC power has been growing for some time and the technology is difficult to contain within any borders, whether state or national (or planetary?—after all, we’re talking about a century from now). State commissions seemed destined to play more of a niche role, perhaps largely acting as “deputized federal regulators”101 as they do under the 1996 Act.

As for Theodore Vail’s “universal service” goal, part of a slogan in 1908 but thereafter a central part of public policy for over a century, one can hope that technology will evolve to the point where coverage is so easily ubiquitous that universal access is not an issue. The question we cannot answer or even guess at today is, access to what, exactly, and will that access need to be guaranteed by government? Surely (probably?) the necessary access will be some future form of the Internet (because what access could be more universal than access to the broadest universe of information), but with technological advancement there is no good way to guess what that might be.

Coming back to the ABA, in 100 years will there even be a need for a section like IRIS, at least when it comes to telecommunications? Assuming lawyers have not been replaced by machines, whoever reads this in 2117 will no doubt be amused by the archaic spelling, cite form, and concept of “telecommunications.” Our guess is that there will be such a need, because the trend of legal practice (and most things) seems always to bend toward specialization—perhaps by then communications will encompass a panoply of existing and as-yet unimagined and untold forms of speech, information, entertainment, assembly, and interpersonal contacting services provided on a planetary, and perhaps extra-planetary and interplanetary, basis, such that the accompanying laws and rules will need their own separate ABA section. It may or may not be a section of lawyers who do a lot of work at regulatory agencies, but the field itself will remain. The world will, we hope, need somebody to devise new definitions, argue for new service distinctions, and coin new acronyms (to the continued chagrin of generalist judges). LATA has long since gone by the wayside, POTS may be fading, PANS are not far behind, but the children of BIAS will march on.


1. Bell initially had been trying to improve telegraph service. The telegraph system faced a capacity problem because people wanted to send more telegrams than the wires could handle, and Bell had been looking for a way to send multiple telegraph signals over the same wire by using multiple tones of different pitch. But then he realized that if you could do that, you might be able to send a human voice down the wire. Phil Lapsley, Exploding the Phone: The Untold Story of the Teenagers and Outlaws Who Hacked Ma Bell 17 (2013) (hereinafter Exploding the Phone).

2. Telecommunications History Group, Telecommunications Virtual Museum, The Telephone Patent Follies, And both Bell and Gray would have been out of luck if Antonio Meucci had his way. Meucci filed a caveat (announcement of invention and intent to seek a patent) more than four years earlier, on December 28, 1871, but the Western Union affiliate laboratory reportedly lost all his working models, and Muecci lacked the $10 necessary to renew his caveat after 1874. 107th Congress, H. Res. 269, Bell reportedly had “conducted experiments in the same laboratory where Meucci’s materials had been stored,” but a case filed by the United States in 1887 to annul Bell’s patent on the ground of fraud and misrepresentation ultimately did not succeed. Id.

3. The drawing for Bell’s patent can be seen here:

4. The Telephone Patent Follies, supra note 2.

5. Id.; Herman Kogan, Traditions and Challenges: The Story of Sidley & Austin, at 28–29 (1983) (hereinafter Traditions and Challenges).

6. Peter Huber, Michael Kellogg & John Thorne, Federal Telecommunications Law § 1.2.1 at 7 (2d ed. 1999) (hereinafter Federal Telecommunications Law).

7. History of AT&T, Inventing the Telephone, The Bell System in general will also be referred to as “Bell” or “Bell Company” or “Bell Telephone.”

8. The Telephone Patent Follies, supra note 2.

9. Id.

10. But Western Union teamed up with the Bell Company again before long—for a bit—as discussed below.

11. The Telephone Patent Follies, supra note 2.

12. Federal Telecommunications Law, supra note 6, § 1.2.1 at 7.

13. 126 U.S. 1 (1888).

14. Federal Telecommunications Law § 1.4.2, supra note 6, at 30–31; Peter Huber, Law and Disorder in Cyberspace: Abolish the FCC and Let Common Law Rule the Telecosm 78 (1997) (hereinafter Law and Disorder in Cyberspace).

15. For example, Lily Tomlin’s character of Ernestine the switchboard operator became a cultural archetype in the 1960s and 1970s, see, e.g., Bob Newhart launched his career reciting one side of telephone calls, e.g.,

16. “When a Stranger Calls,” (a thriller based an intruder who figured out the trick of calling your own phone number from inside the house).


18. See the list at Telecommunications History Group, Telecommunications Virtual Museum,

19. Local Access and Transport Area.

20. Plain Old Telephone Service.

21. Pretty Advanced New Stuff.

22. Broadband Internet Access Service.

23. Exploding the Phone, supra note 1, at 19–20.

24. Id.; History of AT&T, Inventing the Telephone, As exchanges proliferated, Bell Telephone initially used teenage boys as switchboard operators, assuming that their dexterity and mechanical skills would make them ideal. But, surprisingly, it turned out they were “often impatient, rude, and foul-mouthed to callers.” Exploding the Phone, supra note 1, at 21. Bell Telephone therefore switched to female switchboard operators, adding a friendlier touch. Id.

25. First Commercial Telephone Exchange, Today in History—January 28,,

26. William Grimes, The Great ‘Hello’ Mystery Is Solved, N.Y. Times, Mar. 5, 1992,

27. Exploding the Phone, supra note 1, at 20.

28. Id. at 25–26; Federal Telecommunications Law, supra note 6, § 1.2.3 at 8. This video describes step-by-step switches, which remained in use for decades, and worked so well they were often refurbished and used for many more years in other countries,

29. “Prank,” not “crank,” Although they were not consulted, most teenage boys presumably agreed that the ability to make prank calls offset the loss of opportunities to work as telephone operators.

30. A YouTube search of “AT&T Archives” retrieves a number of instructional and promotional films on dialing and a range of other topics, such as how to use 3-way calling, like those cited here,;;

31. Transpose the middle numbers and you get 1984, when the Bell System was dismantled. Coincidence?

32. For interesting vignette histories on several of the early independents—such as the Leadville Telephone Company, which created “H” shaped poles in order to cross the Rockies— see Telecommunications Virtual Museum,

33. Federal Telecommunications Law, supra note 6, § 1.3 at 12.

34. Id.

35. Id.

36. Traditions and Challenges, supra note 5, at 70.

37. Federal Telecommunications Law, supra note 6, § 1.3.2 at 16. Notably, the Mann-Elkins Act did not require common carriers like the Bell companies to carry the traffic of other carriers. Id.

38. Traditions and Challenges, supra note 5, at 70; R. Bornholz & D. Evans, The Early History of Competition in the Telephone Industry, at 13, in Breaking Up Bell: Essays on Industrial Organization and Regulation (D. Evans ed., 1983).

39. AT&T was the name (acronym, at the time) for the Long Lines division of the Bell System, though soon it became the name for the Bell System as a whole.

40. Traditions and Challenges, supra note 5, at 70; Federal Telecommunications Law, supra note 6, § 1.3 at 12.

41. The Kingsbury Commitment was reprinted in AT&T’s Annual Report for 1913 and can be found at

42. Steve Coll, The Deal of the Century: The Breakup of AT&T 58 (1986).

43. Federal Telecommunications Law, supra note 6, § 1.3 at 12.

44. Bornholz & Evans, supra note 38, at 13–14.

45. T. Krattenmaker, Telecommunications Law and Policy 348 (2d ed. 1998).

46. History of AT&T, Milestones in AT&T History,

47. History of AT&T, History of AT&T and Television,

48. Id. Inspiration for yet another song: Hear Telstar, by The Ventures at The U.S.S.R. apparently did not have any surf-instrumental groups similarly interested in celebrating Sputnik.

49. Federal Telecommunications Law, supra note 6, § 1.3 at 10–11.

50. Id.

51. Milestones in AT&T History, supra note 46.

52. Bell ended up staying out of the broadcasting business as a result of the Radio Act of 1927, which forbade cross-ownership of telephone companies and broadcasting stations, leaving each to its own presumably separate industries. Federal Telecommunications Law, supra note 6, § 1.3.3 at 20.

53. The Journal of the Federal Communications Bar Association, which eventually became the Federal Communications Law Journal, launched its first issue in 1937. At the time the Federal Communications Bar Association, founded in 1936, had 182 members—and boasted that over half of these were from outside Washington, D.C. 1 Fed. Communc’ns B.J. 5, 8 (1937). Today the FCBA has more than two thousand members.

54. Federal Telecommunications Law, supra note 6, § 1.3.4 at 21–24 & n.71. This was before Domino’s and Little Caesar’s changed the pizza pricing model and, to those of a delicate palate, the meaning of “pizza.”

55. 282 U.S. 133 (1930).

56. Indeed, in 1954 the FCC ruled for the first time that telephone competition was in the public interest and could be permitted when “reasonably feasible,” but the Supreme Court said the FCC needed to provide a better rationale, and that was that for a while. McKay Radio and Tel. Co., 15 F.C.C. 690 (1951), rev’d, RCA Communc’ns, Inc. v. FCC, 201 F.2d 694 (D.C. Cir. 1952), vacated and remanded, FCC v. RCA, 346 U.S. 86 (1953); Federal Telecommunications Law, supra note 6, § 1.5 at 33.

57. Most agree that the 1956 decree accomplished little. S. Benjamin, H. Shelanski, J. Speta & P. Weiser, Telecommunications Law and Policy 343 (3d ed. 2012). Some have suggested that lingering dissatisfaction with the 1956 decree helped propel the DOJ’s 1974 antitrust suit against AT&T. The Deal of the Century, supra note 42, at 58–59.

58. Hush-A-Phone Corp. v. United States, 238 F.2d 266, 268 (D.C. Cir. 1956).

59. Use of the Carterphone Device in Message Toll Telephone Service, 13 F.C.C.2d 420 (1968). On reconsideration, however, the FCC said it was not “open[ing] the door to customer ownership of telephone handsets.” 14 F.C.C.2d 571 (1968).

60. Law and Disorder in Cyberspace, supra note 14, at 78–79.


62. The hamburger phone, hot dog phone, lips phone, Garfield phone, etc.

63. Law and Disorder in Cyberspace, supra note 14, at 78–79. For pictures of some various Western Electric phones that customers leased from Ma Bell over the years before others could make and sell handsets, see

64. M. McDermott III, CLEC: Telecom Act of 1996, an Insider’s Look at the Rise and Fall of Local Exchange Competition 19 (2002); Federal Telecommunications Law, supra note 6, § at 136.

65. It was called the “Modification” of Final Judgment because it modified the 1956 consent decree issued by the New Jersey district court. Having already presided over months of the complex bench trial in United States v. AT&T, Judge Harold Greene was initially none too pleased to return from a vacation and learn that that the settlement of the historic case had already been reviewed and blessed by another court. The episode and Judge Greene’s role in ultimately approving the MFJ are summarized nicely in The Deal of the Century, supra note 42, at 324–44.

66. A documentary on Bill McGowan, the colorful and outspoken founder of MCI, can be found here:

67. The Deal of the Century, supra note 42, at 83–91.

68. The award was remanded and materially reduced on retrial (to $37.7 million, trebled to $113.1 million). MCI v. AT&T, 708 F.2d 1081 (7th Cir. 1983); The Deal of the Century, supra note 42, at 377; MCI’s Damage Award Only $37.7 Million in AT&T Antitrust Case, L.A. Times, May 29, 1985, One of MCI’s lead trial attorneys in the case, Chester Kamin of Jenner & Block, discusses the case and hearing the original verdict in a short video at

69. In an achievement somewhat stunning to contemplate, during the tumultuous period from 1980–1986 longtime AT&T outside counsel Howard Trienens served as both Chairman of Sidley & Austin and General Counsel of AT&T, which then had 900 lawyers and was the largest industrial organization in the world:

Asked why he allowed Trienens to retain his Sidley & Austin partnership while at AT&T, [CEO Charlie] Brown replied that he “needed the best lawyer in the world–that is, Trienens–and he would get him any way he could.” Peter Temin with Louis Galambos, The Fall of the Bell System: A Study in Prices and Politics 204 n.80 (1987). The story at the firm sometimes included that Trienens had insisted on the joint arrangement because he did not want the AT&T position and believed that his retaining the law firm partnership was the one condition that Brown would have to regard as both reasonable and unacceptable.

Joseph Kearney, Foreword: The Last Assembly of Interstate Commerce Act Lawyers, 95 Marq. L. Rev. 1123 n.1 (2012).

70. S. Pac. Communc’s Co. v. AT&T, 556 F. Supp. 825 (D.D.C. 1983), aff’d, 740 F.2d 980 (D.C. Cir. 1984); Traditions and Challenges, supra note 5, at 298–99.

71. Although it is difficult now to imagine there being a dearth of telecommunications legal scholarship, even after the MFJ, most regulatory issues seem so mundane that “[t]he resulting intellectual poverty of telecommunications law [could] not be exaggerated,” and “until 1986 there was not even a reliable published record of all Federal Communications Commission reports, orders, and policy statements.” J. Gregory Sidak, Telecommunications in Jericho, 81 Cal. L. Rev. 1209, 1210 (1993). The original version of Federal Telecommunications Law cited herein, the first treatise of its kind, was not published until 1992. Newton’s Telecom Dictionary was first published in 1982 and is now on its 30th edition.

72. Dean Joseph Kearney of The Marquette University Law School provides an interesting analysis of the post-MFJ litigation era—which had a significant impact on the 1996 Act—in From the Fall of the Bell System to the Telecommunications Act: Regulation of Telecommunications Under Judge Greene, 50 Hastings Law J. 1395 (1999).

73. 47 U.S.C. § 601(a). A consent decree involving GTE—which had acquired and merged with many independent companies to become the largest local service provider after AT&T, and which eventually merged with Bell Atlantic to form Verizon— was vacated by 47 U.S.C. § 601(b). The history of GTE prior to the Bell Atlantic merger is summarized at

74. H.R. Rep. No. 104-204, at 48.

75. Federal Telecommunications Law, supra note 6, § 1.9 at 53.

76. Iowa Utils. Bd. v. AT&T Corp., 525 U.S. 366, 397 (1998). Former Solicitor General Seth Waxman described the 1996 Act as “the single most poorly drafted statute ever enacted by Congress.” Slew of Supreme Court Cases to Focus on ‘96 Telecom Law, N.Y. Times, Oct. 1, 2001,

77. 8 Lessons from the Telecom Mess, Bus. Week, Aug. 13, 2001, at 66,

78. For a front-line treatment of the legal, business, and technical challenges of being a CLEC in the uncharted early years after the 1996 Act, see CLEC: Telecom Act 1996, supra note 64.

79. One of the authors was involved in a case with SBC on one side and AT&T, MCI, and Covad on the other. By the time of oral argument on summary judgment, mergers had caused AT&T and MCI to switch sides, leaving Covad alone. As in any industry, mergers can sometimes force lawyers to “see the light” of positions their clients formerly opposed.

80. TELRIC stands for Total Element Long-Run Incremental Cost. It is the pricing methodology the FCC established in the August 1996 Local Competition Order and requires states to use in setting rates for certain wholesale products that incumbent LECs provide under the 1996 Act.

81. S. Lichtenberg, Telecommunications Regulation, NRRI Rep. No. 15-07 (Sept. 2015),

82. See S. Lichtenberg, Carrier of Last Resort: Anachronism or Necessity, NRRI Rep. No. 16-06 (July 2016),

83. Marty Cooper of Motorola is generally credited as the creator of the handheld portable cell phone. See Cooper made the first call from his handheld cellular phone to the head of Bell Labs to let him know of the achievement, as recounted in an interview at Of course, the people at Bell Labs might have disagreed with that “first” claim, given that AT&T had operated an experimental cellular system in 1962 and the concept of cellular communications had been conceived at Bell Labs in 1947. Law and Disorder in Cyberspace, supra note 14, at 68; Federal Telecommunications Law, supra note 6, § 10.1 at 864.

84. Jonathan E. Neuchterlein & Philip J. Weiser, Digital Crossroads: Telecommunications Law and Policy in the Internet Age 133 (2d ed. 2013) (hereinafter Digital Crossroads).

85. Id.

86. In a similar underestimate of future demand for cellular service, in approving the “removal from active regulatory oversight” of the nation’s first licensed cellular market, the greater Chicago area, the Illinois Commerce Commission concluded that competition among the two initial licensees “and their six unaffiliated resellers” was intense, and that the two licensees had “substantial excess capacity to serve additional customers for the foreseeable future.” Order, Chicago SMSA Ltd. Partnership, Petition for rulemaking with respect to exclusion of cellular radio service from active regulatory oversight, No. 85-0477, at 26 (Ill. Comm. Comm’n 1987).

87. Talking on a phone while walking on the beach? Typical New York City nonsense.

88. The History of Mobile Phones From 1973 to 2008: The Handsets That Made It All Happen,

89. Id.

90. Protecting and Promoting the Open Internet, 30 FCC Rcd 5601, ¶ 9 (2015) (subsequent history omitted).

91. National Center for Health Statistics, National Health Interview Survey Early Release Program, Wireless Substitution: Early Release of Estimates From the National Health Interview Survey, July–December 2016 (rel. May 2017) (issued by Centers for Disease Control),


93. J. Wortham, Cell Phones Now Used More for Data Than Calls, N.Y. Times, May 13, 2010,

94. Michio Kaku, Physics of the Future, How Science Will Shape Human Destiny and Our Daily Lives by the Year 2100, at 38-39 (2011).

95. This Week @ NASA, NASA, Nov. 23, 2012,

96. Law and Disorder in Cyberspace, supra note 14, at 1–9. Legendary regulatory economist Alfred Kahn expressed similar views. A. Kahn, Letting Go: Deregulating the Process of Deregulation, at 70 (Inst. of Pub. Utils. & Network Indus., 1998).

97. Digital Crossroads, supra note 84, at 366.

98. Lawrence Lessig, Reboot the FCC, Newsweek, Dec. 22, 2008, reprinted in Benjamin, et al., Telecommunications Law and Policy, at 874–76.

99. See Joseph Kearney & Thomas Merrill, The Great Transformation of Regulated Industries Law, 98 Colum. L. Rev. 1323, 1404–08 (1998).

100. Sidak, supra note 71, at 1210.

101. MCI Telecommuc’ns Corp. v. Ill. Bell Tel. Co., 222 F.3d 323, 344 (7th Cir. 2000).

By Christian F. Binnig and J. Tyson Covey

Christian F. Binnig ([email protected]) and Mr. Covey ([email protected]) are partners in the Chicago office of Mayer Brown LLP. Any opinions expressed in this article are entirely their own.