Data communications over telegraph circuits 1923

Colonel Forbin

Very true.

At that time, people had begun to use telephones more than ever--they had more extension phones and phone lines in their homes and made more long distance calls. They wanted to pay less. They felt the phone company could afford to charge them less.

In many cases, the phone company certainly could afford to charge less, but that was because certain subsets of users were paying less than cost and govt policy was to (and had been all along) to even it all out. Consumers also failed to understand there was no such thing as a free lunch. After divesture they did save money in some areas but lost it in others. Today, society ignores all the price gouging and fraud that goes on.

We talk about the savings from compebreastion. But does anyone add in the losses of fraud or payphone gouging?

Ironically, after the litigation was resolved, govt policy CONTINUED for a while to even it all out. MCI could do as it pleased to attract or ignore business while AT&T was locked with rates and had to ready to serve everyone. MCI had no such obligation and its overhead and capacity needs and costs were far less than AT&T as a result.

In other words, if MCI couldn't handle a call for whatever reason (and there were many), it simply told the caller to use AT&T. Nobody objected to that. But if AT&T had trouble and bumbed people over to MCI, people would've screamed (and did).