ABSTRACT
In this chapter, the author proposes to compare the regulator, the Federal Communications Commission (FCC) with the regulated, AT&T, in order to rank the regulator's actions in relation to the opinions of contemporary participant-observers in the regulatory process. Regulators and firms have an easier time dealing with new technology than they have with establishing prices. The author approaches the question of whether or not regulation can keep pace with technology by relating some familiar stories. AT&T was laggard in the introduction of new technology, at least in terminal equipment; the FCC was the proverbial fool rushing in with microwave radio. AT&T, reaffirming its end-to-end responsibility for the network, refused to permit the innovation to be used. AT&T's opposition extended to the 'Carterfone,' even though the phone did not make an electrical connection with the telephone network. The sound of conversation from an ordinary telephone handset activated the switch of a radio which communicated with the user of a mobile radio/telephone.
