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device under any circumstances, but when he appealed to the FCC he was given permission, opening the customer-provided equipment (CPE) market for the first time. AT&T s concerns about possible damage to the network were well founded, but by the time AT&T v. Carter came to trial the device had been in use for several years and clearly hadn t done any damage whatsoever. In 1969, the very next year, the FCC gave MCI permission to offer private line services between St. Louis and Chicago over its privately owned microwave system. And in 1971 the court extended its 1956 Consent Decree mandate, ordering AT&T to allow non-Bell companies such as MCI, to connect directly to their network, ending AT&T s stranglehold on the private line market. The decision was based on a far-reaching FCC policy designed to create nationwide, full-blown competition in the private line marketplace. It didn t end there, however. In 1972 the FCC mandated that satellites could be used to transport voice and compete with AT&T, and that valueadded carriers could resell AT&T services. In 1977, in the now famous
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Execunet decision, MCI won a legal battle that allowed them to compete directly with AT&T in the switched long-distance services market, AT&T s bastion of revenue. In 1974 they extended their attack, filing an antitrust suit against AT&T and charging them with unfairly restricting competition and dominating the marketplace. That same year, the Justice Department filed an antitrust suit of their own, signaling the beginning of the end for the Bell System. In 1980, another crack appeared in AT&T s armor when the FCC consciously recognized the difference between basic and enhanced services. Computer Enquiry II stipulated that basic services would be regulated and, therefore, tightly controlled. Enhanced services, including CPE, would be deregulated and made completely competitive. AT&T was told that it could sell enhanced services but only through fully separate subsidiaries, to ensure no mixing of revenues between the two sides of the business. In 1981, the United States v. AT&T came to trial in Judge Harold Greene s court. In the months that followed it became painfully clear to AT&T that it would not win this game. On January 8, 1982, the two sides announced that they had reached a mutually acceptable agreement. The agreement, known as the Modified Final Judgment, stipulated that AT&T would divest itself of its 22 local telephone companies, the Bell Operating Companies. The company would retain ownership of Western Electric, Bell Laboratories, and AT&T Long Lines and would be allowed to enter noncarrier lines of business such as computers and the like. Meanwhile, the BOCs were gathered into seven regional BOCs called RBOCs, tasked with providing local service to the regions they served. The RBOCs were further subdivided into Local Access and Transport Areas, or LATAs, which defined the areas within which they were allowed to provide transport. A state like California, for example, is very large; so, even though the traffic between San Francisco and San Diego never leaves Pacific Bell territory, it clearly travels over a long distance and therefore must be handed off to a long-distance carrier for transport between LATAs. While the best-known impact of divestiture was the breakup of AT&T one result of which was the liberalization of the telecommunications marketplace in the United States a second decision that was tightly intertwined with the Bell System s breakup was largely invisible to the public, yet was at least as important to AT&T competitors MCI and Sprint as the breakup itself. This decision, known as Equal Access, had one seminal goal: to make it possible for end customers to take advantage of one of the products of divestiture, the ability to select one s
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