Deregulation and privatization
LASZLO SOLYMAR · 1999
Abstract The end of the war saw AT&T stronger than ever. They had the local monopoly, the long distance monopoly and the manufacturing monopoly. Almost all the equipment used by the AT&T network was manufactured by Western Electric, their own company. The Justice Department of the US thought that was too much of a good thing and filed a suit in 1949 seeking to divest Western Electric from AT&T. The case dragged on until 1956 when an out-of-court settlement known as the Final Judgment was reached. AT&T was allowed to retain their manufacturing arm in return for a few minor concessions, namely that (i) Bell companies would license their patents under reasonable and non-discriminating terms to all applicants1 and (ii) they would not engage in any unregulated business. This meant that anything related to telecommunications was all right but anything outside, e.g. computers, was forbidden.