Too big to regulate: AT&T and the Bell System

In the early 1980s, as communications giant AT&T prepared to spin off its Baby Bells, a host of accounting scandals involving AT&T were conveniently pushed under the carpet by regulators and courts unable or unwilling to fathom the depths of the vast multi-national corporation.

Author and Pittsburgh Post-Gazette writer Barry Paris recalls that one of these AT&T accounting scandals involved the destruction of new Western Electric telephone equipment. Vast stores of new equipment -- everything from telephone cables to princess phones -- were ordered destroyed, while the fraudulent costs were passed on to telephone ratepayers.

This accounting scandal, says Paris, resembled today's Enron debacle, except that, "it makes Enron look like Aunt Mary's cafe in Beltzhoover."

This story takes on renewed importance today, as AT&T announced in March, 2006 that it plans to re-merge with one of its Baby Bells, Bell South, thus reconstituting a communications conglomerate that many in the 1970s and 80s felt had to be busted up because it was "too big to regulate."

It was recorded in July, 2004. Posted March 20, 2006.

 

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