1968 : June 26 :: FCC Releases Carterfone Decision ~ Approves Foreign Attachments to Network

Source: Wikipedia

In 1959, Carter invented a device, which he named for himself, that permitted users of mobile radio systems to interconnect their landline telephone with the radio system to permit mobile and fixed users to communicate with each other.   Consider, for example, the ability to use a Carterfone to link a marine radio to the telephone line, allowing someone on a boat to talk to someone on a telephone.

AT&T advised its customers that the Carterfone, if used in conjunction with an AT&T telephone, would subject the end user to penalties pursuant to AT&T's FCC tariff number 132, which provided that:

No equipment, apparatus, circuit or device not furnished by the telephone company shall be attached to or connected with the facilities furnished by the telephone company, whether physically, by induction or otherwise ....

Carter filed a private antitrust suit against AT&T, and the District Court referred the matter in 1966 to the FCC.

Before the FCC, AT&T again failed to demonstrate how competitive CPE would harm the network. The Commission concluded that AT&T's tariff was unreasonable and discriminatory and ordered the restrictive tariff provisions stricken. The Commission was troubled by the tariff provision that would have permitted end users to install AT&T-manufactured equipment with exactly the same functionality offered by the Carterfone, but not the Carterfone itself. The Commission determined that a customer desiring to improve the functionality of the telephone network by interconnecting a piece of equipment not manufactured by the phone company should be permitted to do so, so long as that equipment does not harm the network. As stated by Huber, Kellogg, and Thorne, "Unvarnished claims of threatened harm to the network would no longer suffice;" from here out, AT&T would have to demonstrate specific harm to prohibit competitive CPE. The Commission also rejected AT&T's arguments that opening the network to competitive CPE would have adverse economic impact on AT&T's telephone service.

Opening the telephone network to interconnection with foreign attachments or customer premise equipment opened the telephone network to interconnection with modems, fax machines, answering machines and was one of the necessary preconditions that paved the way for the Internet.  In a parallel proceeding in this time, the FCC had initiated the Computer Inquiries.

Use of the Carterfone Device in Message Toll Telephone Service; Thomas F. Carter and Carter Electronics Corp., Dallas, Tex. (Complainants), v. American Telephone and Telegraph Co., Associated Bell System Companies, Southwestern Bell Telephone Co., and General Telephone Co. of the Southwest (Defendants), Docket Nos. 16942, 17073, Decision, 13 FCC 2d 420 (1968) (Carterfone), recon. denied, 14 FCC 2d 571 (1968).

Derived From: From Jason Oxman, FCC Working Paper 31:  The FCC and the Unregulation of the Internet Text | Word97 | Adobe | Press Release | July 1999