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Monday, June 12, 2006

It's Alright, Ma Bell - by Alexander Dryer

Last week, as details emerged of the Justice Department’s plan to have Internet providers log customers’ Web clicks and e-mails, the method behind the Bush administration’s domestic surveillance finally became discernible. The new initiative follows the pattern set by the NSA call-tracking program: The government deputizes telecommunications companies to carry out its spying.
While critics view this approach mainly as a privacy problem, it has even more far-reaching repercussions. In fact, it may explain the last five years of telecom regulation -- in which the Bush White House has abolished pro-competition policies and approved once-unimaginable mergers. Moves that had once seemed driven only by the President’s faith in unregulated capitalism now betray a darker potential motive: The Bush administration has been promoting telecom behemoths because it finds them easy to control.
Put simply, if the government wants to spy on Americans, monopolies -- which depend on the good will of government regulators -- are willing accomplices. Indeed, the only company to stand up to the NSA’s request for customer phone records was the lone independent Baby Bell, Qwest. The companies comprising the reconstituted AT&T and its duopolistic “competitor” Verizon readily acquiesced. The irony is that in trading away consumers’ interests for national-security concerns, the Bush administration is repeating a mistake made almost 90 years ago, one that led to more than five decades of stifling Ma Bell monopoly.
That last regulatory fiasco began in the spring of 1918, when American troops began to arrive en masse at the European front and military officials were growing worried about the security of the essential domestic telephone and telegraph networks. In July, Congress voted to nationalize the entire system -- a move that some say was welcomed by AT&T, the nation’s largest phone company. Apparently company executives saw an opportunity to regain the market control they lost when AT&T’s patents expired in 1894. President Theodore Vail’s motto for the company was “one system, one policy, universal service,” based on his belief that “no aggregation of isolated independent systems” could provide national service. Government control in the name of national security -- which Vail knew would last only as long as the war -- was his chance to make AT&T that “one system.”


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