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Reply #7: That was one of the most important anti-trust cases/experiments of all time. Explanation--> [View All]

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HamdenRice Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-12-09 09:28 AM
Response to Reply #4
7. That was one of the most important anti-trust cases/experiments of all time. Explanation-->
There has been so much written about AT&T, and it's very important, complicated and interesting.

I think the most interesting thing about it is that it was one of the few cases in which a corporation basically said to the government, maybe you're right; maybe we should be broken up. It was their outside lawyers who famously went through all their options, and did all this analysis and said, you should consent to this. It was so complicated that they then hired that lawyer to be their CEO for a while.

Here was the problem. There was basically one telephone company nation-wide. There were small local companies, but basically AT&T was almost the entire phone company.

Lily Tomlin became famous for lampooning telephone operators on Laugh In by not taking customers compaints seriously and saying, we don't have to do that; we're the telephone company.

AT&T controlled both local and long distance calling. Two companies, Sprint and MCI developed ways of creating long distance phone services. The big problem was getting the right of way to lay wires. Sprint was originally part of "Southern Pacific Railroad" --hence the SPR -- and had rights of way to lay wires next to their tracks as rail traffic declined.

Sprint and MCI sued AT&T as a monopoly and after years of litigation, AT&T agreed to be broken up into a long distance company -- AT&T -- and local companies called the "baby bells", which became Verizon, Pacific Bell, etc.

It turned out that when AT&T controlled everything they charged very high rates on long distance to subsidize local calling, which was extremely cheap.

When the broke up that subsidy no longer existed. Local rates went up very, very fast, but long distance rates plummeted. If you remember those years, people timed long distance calls because they were ruinously expensive. But the actual cost to the phone company is little different from local calls.

So when you say rates went up, it was local rates that went up. Correspondingly, long distance rates went down dratstically.
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  -Does government have the power to break up gigantisaur corporations into smaller entities? Union Yes  Sep-12-09 08:49 AM   #0 
  - Yes  TxRider   Sep-12-09 08:56 AM   #1 
  - Walmart is a prime example of a monopoly. Look what they have done to almost ..  Union Yes   Sep-12-09 09:01 AM   #2 
  - Walmart is not a monopoly  SmileyRose   Sep-12-09 10:09 AM   #14 
     - Walmart is a monopoly -- they literally drove Kmart out of my area  Donnachaidh   Sep-12-09 12:14 PM   #23 
        - Kmart destroyed itself  SmileyRose   Sep-12-09 12:25 PM   #24 
        - Walmart killed mom and pop shops all across America.  Union Yes   Sep-12-09 12:48 PM   #25 
        - Walmart does many terrible things  yodoobo   Sep-12-09 12:59 PM   #27 
        - Walmart IMHO is bad for America and the world at large -- BUT  SmileyRose   Sep-12-09 02:15 PM   #28 
           - I call BS n/t  Donnachaidh   Sep-12-09 02:46 PM   #31 
        - so you're using personal preference as a judgement call on a business?  Donnachaidh   Sep-12-09 02:46 PM   #30 
           - Oh come on  SmileyRose   Sep-12-09 04:10 PM   #33 
        - hardly  yodoobo   Sep-12-09 12:57 PM   #26 
  - I agree, but that would not be "looking forward". Bush encouraged the monopolies and Obama will not  thunder rising   Sep-12-09 09:02 AM   #3 
  - I think it happened to Standard Oil and Bell Telephone.  theoldman   Sep-12-09 09:03 AM   #4 
  - That was one of the most important anti-trust cases/experiments of all time. Explanation-->  HamdenRice   Sep-12-09 09:28 AM   #7 
     - Very informative. Thanks for wieghing in.  Union Yes   Sep-12-09 09:40 AM   #9 
     - Exactly right  customerserviceguy   Sep-12-09 10:15 AM   #15 
  - Ever hear of Teddy Roosevelt?  Coyote_Bandit   Sep-12-09 09:05 AM   #5 
  - I'm wondering if the upcoming Supreme Court decision will prod govt to act?  Union Yes   Sep-12-09 09:20 AM   #6 
  - Thing is  Coyote_Bandit   Sep-12-09 09:47 AM   #11 
     - I couldn't say it better.  Union Yes   Sep-12-09 09:59 AM   #13 
  - Trust Busting Leveling the field of play TR: a bipartisan role-model for Team Obama  FraDon   Sep-12-09 09:50 AM   #12 
  - Has the power, but not the will nt  JerseygirlCT   Sep-12-09 09:29 AM   #8 
  - Sadly, I agree.  Union Yes   Sep-12-09 09:41 AM   #10 
  - The power,yes, but sadly not the will.  Vidar   Sep-12-09 10:20 AM   #16 
  - Anti-trust laws but they never use them.  Joanne98   Sep-12-09 10:21 AM   #17 
  - Antitrust Laws are Hard to Enforce  On the Road   Sep-12-09 10:46 AM   #18 
  - Shit, even Reagan did that. I have no idea why it's not happening now.  RandomKoolzip   Sep-12-09 10:47 AM   #19 
  - The government has the power, but I don't think it can happen now  DavidDvorkin   Sep-12-09 10:49 AM   #20 
  - they used to, But conservatives have worked hard and spent much to make that power  librechik   Sep-12-09 10:57 AM   #21 
  - Sherman Anti-Trust Act.  Odin2005   Sep-12-09 11:00 AM   #22 
  - Only big corporations  treestar   Sep-12-09 02:17 PM   #29 
  - Not in practice.  Orsino   Sep-12-09 03:32 PM   #32 

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