In return for the government's agreement not to pursue its case against the company as a monopolist, AT&T agreed to divest the controlling interest it had acquired in the Western Union telegraph company, and to allow non-competing independent telephone companies to interconnect with the AT&T long-distance network. ==History== In 1907, Theodore N.
The Kingsbury Commitment is a 1913 out-of-court settlement of the United States government's antitrust challenge against the American Telephone and Telegraph Company (AT&T) for AT&T's then-growing vertical monopoly in the telephone industry.
AT&T's strategies prompted complaints and attracted the attention of the Justice Department. ==Agreement== Faced with a government investigation and a possible suit for antitrust violations, AT&T entered into negotiations that carried on for several months in 1913.
In the letter, dated December 19, 1913, AT&T agreed with Attorney General James Clark McReynolds 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.
The Willis Graham Act of 1921 allowed AT&T to acquire more local telephone systems with the genial oversight of the Interstate Commerce Commission (ICC), effectively declaring the telephone business as a natural monopoly.
Between 1921 and 1934, the ICC approved 271 of the 274 purchase requests of AT&T.
By 1924, the ICC approved AT&T's acquisition of 223 of the 234 independent telephone companies.
Between 1921 and 1934, the ICC approved 271 of the 274 purchase requests of AT&T.
With the creation of the Federal Communications Commission by the Communications Act of 1934, the government regulated the rates charged by AT&T. In 1956, AT&T and the Justice Department agreed on a consent decree to end an antitrust suit brought against AT&T in 1949.
With the creation of the Federal Communications Commission by the Communications Act of 1934, the government regulated the rates charged by AT&T. In 1956, AT&T and the Justice Department agreed on a consent decree to end an antitrust suit brought against AT&T in 1949.
With the creation of the Federal Communications Commission by the Communications Act of 1934, the government regulated the rates charged by AT&T. In 1956, AT&T and the Justice Department agreed on a consent decree to end an antitrust suit brought against AT&T in 1949.
Under the decree, AT&T restricted its activities to those related to running the national telephone system, and special projects for the federal government. In 1968, FCC regulators intervened when the Bell System tried to prevent a mobile communications system, the Carterfone, from connecting to telephone lines.
In the mid 1970s, emerging long-distance competitors like MCI and Sprint faced the same tactic of denying interconnection, which regulators quashed, followed by a series of efforts by the Bell System phone companies to escalate the costs of interconnection as an indirect means of excluding competition.
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