Kingsbury Commitment

December 13, 1913 (12-13-13): A letter from Nathan C. Kingsbury, VP AT&T, to the Attorney General of the United States committed AT&T to dispose of its stock in Western Union Telegraph Company. It also promised to provide long distance connection of Bell System lines to independent phone companies (where there was no local competition) and further agreed not to purchase any more independent phone companies, except as approved by the Interstate Commerce Commission which regulated the phone industry at that time.

This letter formalized AT&T monopoly. Although AT&T divested itself of Western Union, the company was allowed to buy market share, as long as it sold an equal number of phones. AT&T agreed to connect its long distance service to independent local carriers, however, it did not agree to interconnect its local services with other local providers. Nor did AT&T agree to any interconnection with independent long-distance carriers.

In the end, AT&T was able to consolidate its hand both on the most profitable urban markets and in long-distance traffic. Between 1921 and 1934, the ICC (Interstate Commerce Commission) approved 271 of the 274 purchase requests made by AT&T. In 1934, the government acted to set AT&T up as a “regulated monopoly” under the jurisdiction of the FCC (Federal Communications Commission) and this was maintained until its divestiture in 1984.