The Deal of the Century

by Coll, Steve;

  Trienens’ meetings with, 150–157, 177

  Trienens’ phone calls to, 146, 147–148, 149, 177

  local operating companies, 10, 24–25

  Baxter’s views on, 182–184

  corporate management vs., 7, 14

  Crimson Sky and, 174, 176–177

  divestiture of, 274, 288–289, 292, 296, 309, 319–321, 349–352, 372–373

  inter-intra split and, 274, 319–321, 349–352

  local service franchise of, 320–321

  McGowan’s recommendations for, 34, 56, 143, 276–277

  MCI antitrust suit against, 21

  post-breakup, 366–367, 372–373

  procurement decisions of, 289–290

  profits of, 372–373

  state regulators and, 37–38

  U.S. v. AT&T and, 142–143, 144, 176

  see also specific companies

  local service:

  increase in price of, 349–351, 366

  long distance as subsidy for, 13

  state regulation of, 37–39

  tariffs, 37–39

  long distance, 150–151

  AT&T pricing of, 13, 22–24

  Bell Bill and, 92–100

  local service subsidized by, 13

  MCI and, 11–15, 83–91

  number of subscribers to, 370

  post-breakup prices of, 367

  tariffs, 28, 37

  Long Lines department, 9, 10, 24–25, 34, 170, 176, 277

  Baxter’s views on, 182, 183

  H.R. 5158 and, 353–354

  inter-intra split and, 274, 320–321

  MacAvoy, Paul, 373–374

  McGill, Archie, 108

  McGovern, George, 283, 284, 285

  McGowan, William, 16–36, 47–52, 71–72, 148, 170

  Anderson secret settlement attempt and, 143–144

  antitrust suit considered by, 20–21

  background of, 17

  Bell Bill and, 93–94

  credibility problem of, 89–91, 93, 109

  deButts compared to, 43

  deButts meeting memo of, 25–26

  deButts’ meeting with, 21–27, 49–50, 368

  Execunet and, 83–91, 109

  Goeken’s relationship with, 20, 21

  H.R. 5158 attacked by, 354

  inter-intra split and, 274–275

  local operating companies as viewed by, 34, 56, 143, 276–277

  Otter Tail case and, 23, 115

  Saunders and, 200–210

  Strassburg’s correspondence with, 51–52

  success of, 201–202, 274–275

  testimony and cross-examination of, 200–210, 232

  Verveer’s conversations with, 55–56

  McLean, Robert, 172–174, 262, 306, 325–326, 339

  McLuhan, Marshall, 368

  McNeely, Michael, 164

  marketing, 107–109, 111, 371

  Mauro, Tom, 81

  Maxwell, Ronald, 197–199

  MCI, 11–39, 47–52, 367

  annual revenues of, 201

  artificial cost advantage of, 369–370

  AT&T antitrust suit of, 20–21, 27–35, 52, 56, 77, 131, 148–149, 169–171, 202, 371

  AT&T negotiations with, 18–25, 34, 36–39, 48

  AT&T views on survival of, 89–90

  cost of AT&T interconnection with, 19–20, 275–276, 369–370

  CSSA service of, 47, 203, 207

  description of AT&T interconnection with, 18–19

  economic problems of, 34–35, 47, 48, 86–87, 89–90, 368, 371

  ENFIA agreement and, 275–276, 369–370

  Execunet service of, see Execunet

  FCC and, see Federal Communications Commission

  future of, 368–371

  FX service of, see FX service

  IBM’s strategic alliance with, 371

  interim interconnection contract of, 36–39

  inter-intra split and, 274–275, 276, 353–354

  lobbying of, 28–35, 152, 370–371

  McGowan’s vision of, 27

  marketing campaign of, 371

  microwave towers of, 12, 15, 18, 27, 34–35, 87, 89

  Nader campaign funded by, 353–354

  operating costs of, 12, 369–370

  “prayer breakfasts” of, 29

  stock of, 370

  U.S. v. AT&T and, 148–149, 169–171, 196, 200–210, 288–289

  Meese, Edwin, 185–186, 189, 211, 242, 322

  Baldrige and, 216–218

  at cabinet council meeting (July 27), 245–247

  Trienens’ meetings with, 212, 224–225

  message toll service (MTS), 49, 86

  migration strategy, 108

  Mitchell, John, 57

  “Modification of Final Judgment,” 305–306, 308–311

  “equal access” appendix of, 305, 309

  final draft of, 317–319

  signing ceremony for, 324–326

  snag in negotiations on, 312–315

  “Modified Final Judgment,” 359, 362

  monopoly:

  bottleneck, 55–56, 67, 316

  likelihood of AT&T’s return to, 369

  natural, 45–46, 85, 277, 358

  Morrison, Hugh, 65–67, 118, 120, 163

  U.S. v. AT&T supervised by, 74, 75, 114

  motions judges, 329–330

  MTS (message toll service), 49, 86

  Mullane, Bill, 313

  Nader, Ralph, 31, 353–354

  Naisbitt, John, 368

  National Association of Regulatory Commissioners, 40

  National Economic Research Associates (NERA), 239–241

  National Press Club, U.S. v. AT&T settlement announced at, 329–334

  national security, 186–188, 216

  inter-intra split and, 271–272

  National Telecommunications and Information Agency (NTIA), 141, 212–216

  NERA (National Economic Research Associates), 239–241

  New Deal, 45, 58

  New York City, AT&T quality problems in, 7, 12, 46

  New York Telephone Co., 142

  New York Times, 367

  Nixon, Richard M., 6, 57, 61, 64

  North Carolina, state utility commissioners in, 258–260

  Northwestern Bell Telephone Co., 14

  NTIA (National Telecommunications and Information Agency), 212–216

  Nurnberger, T. S., 14

  “Octoberfest” strategy, 284–285

  Otter Tail utility case, 23, 115, 116, 131

  Pacific Telephone & Telegraph Co., 144, 150, 151, 174, 270

  crown jewel divestiture and, 142–143

  inter-intra settlement and, 352

  poor performance of, 143

  Smith’s affiliations with, 175, 187, 211, 225

  Packwood, Bob, 218, 244

  Partoll, Al, 270

  Penzias, Arno, 286–287

  Pires, Alexander, 140–141

  Pope, Bayard, 59

  “pots” (“plain old telephone service”):

  deButts’ emphasis on, 8, 10

  decline in quality of, 7–8, 10, 11, 46

  MCI required to pay for, 19–20

  Powertron Corporation, 17

  Presidents’ Conferences:

  Basking Ridge, 319–321

  Key Largo, 5–15, 22, 39, 103, 192, 301

  pricing of telephone services, see tariffs

  private lines, 85–86

  AT&T, 12, 13

  FX as, 84, 88

  inadequacy of MCI reliance on, 27–28, 89–90

  MCI entry into, 11–13

  protective coupling arrangements (PCAs), 106–107, 109, 131, 137, 169

  Greene’s views on, 263–264

  Hugel’s views on, 272

  U.S. v. AT&T trial and, 191–192, 263–264

  public relations, inter-intra split and, 291–293, 307, 313–316, 332, 333, 335, 347, 348

  publishing, electronic, 360–361

  Quagmire II, 252–256, 262, 27
7, 297–301

  AT&T board of directors and, 300, 301

  Levine’s handling of, 304

  Reagan, Ronald, 148, 150, 160, 175, 244, 248

  Baldrige and, 215, 216

  Baldrige dismissal proposal and, 219

  Baxter appointed by, 177–178, 181, 184–185

  cabinet councils and, 213, 219–222, 223, 243

  dismissal of case rejected by, 254–255

  Eisenhower compared to, 230–231

  Greene’s dismissal opinion and, 263, 265

  Meese and, 211, 212

  tax cuts of, 225

  Wirth’s letter to, 296

  working style of, 217

  Reagan administration:

  business boosterism in, 215

  cabinet councils in, 217–222

  Crimson Sky and, 155–158, 173, 175, 177, 185

  disengaged presidency in, 223–229

  U.S. v. AT&T and, 148, 150, 155–158, 160, 173, 175, 177–178, 184–189, 211–230

  regulation, see Federal

  Communications Commission;

  state regulation

  Relief Task Force, 139, 145, 151, 176

  Richardson, Eliot, 61

  Richey, Charles, 376–377

  Robinson, Kenneth, 141–144, 373–374

  divestiture plan of, 141–144, 150–151

  Greene criticized by, 363

  Rockefeller, John D., 58

  Rodino, Peter, 30, 149, 214, 245, 269, 294

  Romnes, H. I., 10, 12, 105

  Roncalio, Teno, 98

  Roosevelt, Franklin D., 58

  Roosevelt, Theodore, 31

  Rose, Jonathan, 220–221, 225–228, 230, 247, 355

  Senate Bill 898 and, 244–245

  Ross, Ian, 268, 271–272

  Saunders, George L., Jr., 75–82, 113, 119, 182, 194–210

  Anderson’s meetings with, 121–122

  background and personality of, 75–76, 375–376

  Connell compared to, 162, 165, 167, 194, 195, 196, 262

  continuance request and, 249–251

  courtroom strategy of, 195–199

  Crimson Sky and, 174

  cross-examination conducted by, 196–199, 204–210, 235

  demise of, 375–376

  Greene and, 128–131, 171, 179, 216, 232–233, 235, 237, 240, 256–260, 277, 282–290, 312, 340–344

  Greene challenged by, 264–265, 266

  inter-intra split and, 308–311, 325, 328, 330–331, 340–344

  McGowan and, 200–210

  MCI antitrust suit and, 148, 149

  at NERA conference, 239–241

  opening argument of, 159, 166–173

  in Southern Pacific v. AT&T, 376–377

  Waddy as viewed by, 123–124

  witness list of, 282–285, 312

  Saxbe, William, 61–71, 77, 164

  Schaefer, Jacob, 263–264

  Schmitt, Harrison, 355

  Schmults, Edward, 175, 178, 213, 224

  Securities and Exchange Commission (SEC), 68–69

  Segal, Erich, 166

  Senate, U.S., 110, 149, 187, 352

  Armed Services Committee of, 188

  Commerce Committee of, 251, 355–356

  Communications Subcommittee of, 98

  Judiciary Committee of, 128, 251, 252

  Subcommittee on Antitrust and Monopoly of, 29–35, 42, 60

  Weinberger’s secret testimony to, 187–188

  Senate Bill 898, 242–250, 252, 254, 261–262, 277

  Baxter’s amendments to, 243–244, 252, 280

  passage of, 280

  Wirth report and, 295

  Shenefield, John, 116, 118, 128, 139

  Sherman, John, 30–31

  Sherman Act (1890), 30

  Sidley & Austin, 59–60, 75–82, 308

  judges researched by, 124–127

  Silverstein, Alan, 164

  Simms, Joe, 118

  Simon, William, 70–71

  Sirica, John J., 127, 192n

  Smith, William French, 185–186, 213, 224, 225–226, 245, 317

  Baldrige dismissal proposal and, 255

  nominated attorney general, 175

  Pacific Telephone affiliation of, 175, 187, 211, 225

  Southern Bell Telephone &

  Telegraph Co., 142

  Southern New England Bell

  Telephone Co., 143, 144, 150, 151, 174, 270

  Southern Pacific Corporation, 50–51

  Southern Pacific v. AT&T, 376–377

  Southwestern Bell Telephone Co., 142

  price increases of, 351

  Specialized Common Carriers, 50, 205–206

  Sporkin, Stanley, 69

  Sprint, 170, 367, 376

  Stanley, Delbert, 350

  state regulation, 37–39, 41, 78

  FCC rivalry with, 41, 258–260

  inter-intra split and, 352

  in North Carolina, 258–260

  stock:

  AT&T, 69, 71, 152, 368

  MCI, 370

  Strassburg, Bernard, 43–48, 83, 373

  background of, 45

  FX lines and, 50–52, 86–87

  subsidies, 104–105, 258–259, 273

  Baxter’s views on, 182, 242

  cross, 182, 184, 192n, 242, 294, 299

  long distance as, 13

  separations payments, 277

  Supreme Court, U.S., 23, 121, 126, 181, 279, 337

  Swift, Jonathan, 93

  switched telephone network, 11, 24, 56

  equipment competition and, 105–107

  MCI duplication of, 85–90

  Swope, Bill, 118

  Tanenbaum, Morris, 268, 271, 325

  tariffs:

  AT&T, 28, 37–39, 192

  costs and, 192, 349

  local, 37–39

  long-distance, 28, 37

  MCI, 85, 87–89

  modular, 87–89

  telephone competition and, 349–351

  Task Force on Telecommunications Policy, 217–219

  telecommunications bar, 365–366

  telecommunications consultants, 365

  “Telecommunications in Transition” (Wirth), 294–295

  telephone bills, 366–367

  telephone industry:

  economies of scale in, 90

  rates in, see tariffs

  regulation of, see Federal Communications Commission; state regulation

  transitional period in, 367

  see also American Telephone & Telegraph; local operating companies; MCI

  telephones, see terminal equipment

  television, 45, 101

  terminal equipment (customer premises equipment), 10–11, 15, 23–24, 104–111

  Bell Bill and, 109–111, 272

  deButts’ concern about competition in, 105–111

  embedded, 309, 366

  FCC registration proposal and, 106

  leasing of, 108

  Litton suit over, 131, 236

  protective coupling arrangements and, 106–107, 109, 131, 137, 169, 191–192

  United Fruit approach and, 144

  U.S. v. AT&T and, 169–170, 191–192

  Toffler, Alvin, 368

  Tomlin, Lily, 7–8

  Trienens, Howard, 59–60, 76–79, 140–160, 195, 223, 261–262, 277–281

  Anderson’s meetings with, 121, 136, 140–146

  at Basking Ridge Presidents’ Conference, 319–321

  Baxter and, 184–186, 297–299, 303, 309

  continuance request and, 248–251

  Crimson Sky and, 152–158, 166, 173, 174, 177, 178

  Greene’s dismissal opinion and, 266, 267

  inter-intra split and, 268–271, 275, 279–280, 292–293, 297–299, 303, 306, 308–313, 315–317, 319–321, 325, 327, 330, 348

  leadership style of, 277–278

  Litvack’s meetings with, 150–157, 177

  Litvack’s phone calls to, 146, 147–148, 149, 177

  Meese’s meetings with, 212, 224–22
5

  Quagmire II and, 254, 297, 298

  Senate Bill 898 and, 280

  Wirth report and, 294–295

  Truman, Harry S., 58

  Tunney, John, 31

  Tunney Act, 256, 299, 325, 327, 337, 341

  AT&T settlement and, 356, 358–364

  Unger, Sherman, 217, 218, 223, 245

  Quagmire II and, 252–253, 254

  United Fruit approach, 142, 144, 151

  U.S. v. AT&T, 74–82, 107, 113–131

  Anderson approach to, 117–119, 121, 122, 130

  Anderson’s secretive settlement attempt in, 138–146, 269

  as antitrust case vs. regulatory dispute, 78, 81–82, 114, 121

  appeal of, 279, 300, 337

  AT&T attempts at settlement of, 119–122, 140–159, 266–267

  Baxter’s views on, 374

  Brown’s attempt to find quick solution to, 122, 129, 136, 140, 144, 173, 212

  class warfare in, 373, 374

  cost of legal expenses in, 335

  Crimson Sky and, 152–158, 164, 166

  defense issues in, 186–188

  deregulation vs. regulation in breakup of, 373–374

  inter-intra split and, see inter-intra split

  Kristol’s views on, 373, 374

  leaks and, 152, 188–189, 230

  MCI suit as influence on, 148–149, 169–171

  piggybacking in, 152, 184

  pretrial discovery in, 130–131

  public’s views of, 193–194

  reactivation of, 114, 122

  Reagan administration and, 148, 150, 155–158, 160, 173, 175, 177–178, 184–189, 211–230

  Robinson settlement plan in, 141–142, 150–151

  Saunders’ sabotaging of, 76–82, 113

  Senate Bill 898 and, 242–250

  settlement of, 324–344; see also inter-intra split

  settlement requirements in, 142, 150–151

  Supreme Court’s view of, 121

  terminal equipment and, 169–170, 191–192

  Verveer approach to, 114, 117–118

  Verveer’s views on, 74

  U.S. v. AT&T trial, 123–124, 139, 144, 149, 151–152, 163–174, 190–210, 230–238

  Baldrige dismissal proposal and, 216–228, 230

  as bench trial, 164

  best case vs. worst case scenario for, 279

  Brown’s testimony in, 301–302

  celebrity witnesses in, 282–287, 312

  Connell’s cross-examination strategy in, 286–287

  Connell’s opening arguments in, 163–166

  continuance request and, 246–251

  deButts’ testimony in, 262

  Greene’s cross-examination in, 258–260, 288

  Greene’s “lodged” strategy in, 328–330

  McGowan’s testimony in, 200–210, 232

  MCI case and, 169–171, 196, 200–210, 288–289

  “Octoberfest” strategy in, 284–285

  opening of, 159, 163–173

  peer review of, 278, 288