Americans have no memory.  That's why it's possible for someone to be doing a remake of "Working Girl," which came out minutes ago.  (At least on my timescale.)

Well, for more than thirty years before Working Girl was first released, AT&T controlled all aspects of telephony in the U.S.  Long distance, local, all the equipment, and all the good research too.  (We're not faulting them for the research -- in fact, we miss it.)  They were an arrogant and clever company -- the largest in the world -- and when some aspect of their business came under some form of control that made it difficult for them to act in anticompetitive ways in that area, why, they just looked for another place to be anticompetitive in. 

AT&T used their monopoly over local service (the telephony last mile) to make it impossible for competition to emerge in long distance or the manufacture of equipment. 

It was all so complicated that the FCC was completely overpowered -- at the antitrust trial before Judge Greene, DOJ called a bunch of former FCC-ers to testify that they couldn't supervise the Bell System.  This wasn't market failure, this was regulatory failure.  Complete inability to cope.

So Judge Greene drove them through discovery and trial with a firm hand, and after 11 months DOJ and AT&T came up with a consent decree. It separated the local telephone part from everything else (putting local service into the hands of seven operating companies made up of 22 former operating companies).  It specifically said that those operating companies couldn't get into offering content, or manufacturing equipment, or operating long distance service -- because they couldn't be trusted not to discriminate in favor of their own stuff.  After the decree and the complicated process of splitting up the company, long distance prices plummeted, a vibrant market for equipment emerged, and the internet arrived.

Here's Judge Green on the content restriction:

The Regional Companies argue at some length that they have no incentive to discriminate against competitors in the information service market because to do so would diminish use of the network and hence cause a reduction in their revenues. But in any market where the Regional Companies are in competition with independent information service providers, their economic interest lies in manipulating the system toward use of their own services, rather than in encouraging maximum use of the network by their information service competitors.

Sound familiar?

So where are we now?  The seven operating companies crept back into long distance service, got rid of the consent decree (and Judge Greene's firm hand) in the 1996 Act, manipulated/litigated their way out of allowing competitive local service to emerge, and now .... they're mostly reconsolidated.  We really have two phone companies in the US:  Verizon and AT&T.

And they don't really have competitors for broadband access -- just gentle telco/cableco giants.  Maybe colluding gentle giants -- the gentlest of all.

Finally, another bit of history:  the FCC was against structural line-of-business limits on the Baby Bells from the beginning.  Is the Commission now more capable of enforcing any rules against these guys than they were before the first "Working Girl"?