Down the Primrose Path

Abstract

Abstract Bernie Strassburg was frustrated. Trained as a lawyer and initiated into the world of public policy in the heady trust-busting days of the New Deal, he had risen through the ranks of the staff at the Federal Communications Commission (FCC). The year was 1968, and Strassburg had been chief of the Commission’s Common Carrier Bureau for five years. His job was to regulate telephones and telegraphs-which meant, for all practical purposes, trying to regulate American Telephone and Telegraph (AT&T), the largest corporation in the world. AT&T monopolized the markets for local and long-distance telephone service, as well as the markets for telephone equipment, because the federal government made it illegal for anyone else to enter these markets. Strassburg was supposed to regulate the monopoly in the name of the public interest, but as he moved to get control over AT&T, he felt himself to be a Lilliputian trying to tie down a modern corporate Gulliver. At the time, he had no idea that his actions would set the stage for the dissolution of the Bell System as a whole, but this, in fact, would be the result. The breakup of AT&T’s telephone monopoly was caused by Bernie Strassburg’s attempt to get control over the regulatory process, and by the faulty economic analysis that informed his attempt.