| The telecommunications revolution the merging of | | | | Modification of Final Judgment (MFJ) has since been |
| voice, video and other data transmission and the | | | | administered with remarkable energy and wisdom by |
| proliferation of new telecommunications products and | | | | Judge Greene, to whom this nation owes enormous |
| services has been one of America's leading | | | | gratitude. |
| technological and economic success stories. At | | | | By unleashing competition in various segments of the |
| bottom, the key reason is that our scientists, engineers | | | | telephone industry, the MFJ has delivered the benefits |
| and businesses have developed and introduced | | | | that competition in other markets routinely guarantees: |
| telecommunications technologies at a faster pace than | | | | innovation, better products and services, greater |
| anywhere else in the world. | | | | efficiency, and lower prices. Consider that since the |
| Public policies that have promoted competition have | | | | MFJ: |
| been critical to this result. Perhaps nowhere is this | | | | Interstate long-distance prices for the average |
| more evident than in the case of telephone services, | | | | residential customer in real terms (adjusted for inflation) |
| where through the efforts over two decades of the | | | | have fallen by more than 50 percent without |
| Justice Department and Judge Harold Greene, and the | | | | compromising universal service; |
| work of the FCC, competition has become the central | | | | There has been a virtual explosion in the types of |
| organizing principle of the industry. | | | | telephones and services that consumers can choose |
| Until the Department sued and eventually broke up | | | | from; |
| AT&T, that company had a monopoly over this | | | | Competition has stimulated the development of |
| nation's telephone market. It was a regulated monopoly, | | | | hundreds of innovative voice and data services (such |
| to be sure. But it was also one that thwarted | | | | as call waiting and voice mail); |
| competition and innovation. New companies like MCI | | | | Spurred by smaller carriers and MCI and Sprint, the |
| that wanted to provide long-distance service could not | | | | three largest long-distance providers (including AT&T) |
| do so because AT&T's local operating companies | | | | now have laid fiber optic cable throughout much of the |
| refused to provide interconnections to their local loops. | | | | country and thus have already built significant portions |
| Similarly, other manufacturers of telephone equipment | | | | of the backbone for the Nil; and |
| wanted to sell equally, if not more, innovative products | | | | Competition in the telephone equipment market has |
| but were frustrated by AT&T from doing so because | | | | opened whole new markets and spawned the |
| of the telephone company's incentives and ability, | | | | development and sale of new products. |
| through its monopoly control of the local loop, to buy | | | | In short, the MFJ has enabled the United States to |
| such equipment only from its wholly owned subsidiary. | | | | maintain its technological leadership in |
| Western Electric. | | | | telecommunications. Nations that have stuck to the old |
| These practices were ended when the Department of | | | | monopoly model of telephone services have fallen |
| Justice, led by my antitrust law professor in law school, | | | | behind. That is why many are now trying to emulate |
| William Baxter, obtained a consent decree in 1982. A | | | | us, rather than the other way around. |