In the 1930s, Pastor invented an "autodialer." Push a button and the device would automatically dial your favorite phone number for you (aka one touch dialing). He offered to license his patent to AT&T, but AT&T wasn't interested. Having no one else to sell to, Pastor brought an antitrust claim against Bell. The Court thought that AT&T had no obligation to negotiate with Pastor, but at any rate, it wasn't their problem. These types of complaints should be raised before the appropriate regulatory body (like the FCC).
In the 1950s, the Jordaphone Corporation had a pretty cool device, an answering machine. This time Jordaphone did bring its complaint to the FCC. But the FCC wasn't too interested. AT&T reportedly made no showing that the answering machine would harm its network, but the FCC reasoned that 99% of telephone calls stay inside a state (are intrastate) and therefore this is a state regulatory body issue. Punt.
Then in 1956... Well actually this part of the story starts in the 1920s. Observing the need to have a private conversation, and that people would cup their hands over the handset so that people could not hear the conversation, an inventor said "I can solve that problem" and invented a little plastic scope-like attachment that would go over the handset and make the conversation private. Hush a Phone happily sold this cool little invention for 20 years until an AT&T lawyer had lunch (I guess AT&T lawyers have lunch once every 20 years har har). The AT&T lawyer walks down the street, sees the Hush a Phone for sale in a store window, fears for the safety of the telephone network, and sues. AT&T argues that this violates their tariff which states that that nothing can be attached to the network. AT&T alleged no specific harm to its network. Nevertheless, the FCC ruled in favor of AT&T, making a slippery slope argument that the unrestricted use of "foreign attachments" could harm telephone service, networks, and personnel.
Well the Hush a Phone Corporation thought this odd since the device had been used for 20 years without the collapse of the network. Therefore Hush a Phone did something that was unheard of at the time; they challenged an FCC order in federal court. The appellate court was simply baffled that AT&T had no problem with people cupping their hands around a handset, but took offense at achieving exactly the same effect by use of the Hush a Phone. The Court concluded that both the FCC and AT&T had engaged in an unwarranted interference with a "telephone subscriber's right reasonably to use his telephone in ways which are privately beneficial without being publicly detrimental." The monopoly which started with a telephone device had seen its first sign of erosion.
The problem with Hush a Phone is that it only permitted the attachment of non electrical devices. What about electrical devices? Carter his this idea of how to patch a telephone handset together with a radio and create a device that would connect the telephone service with a radio system. This might be useful, for example, in connecting people on boats with the telephone service. AT&T was again afraid that this might cause the collapse of the telephone network, and sent notes to their customers saying that if they used a Carterfone, AT&T would cut off service. Carterfone sued. The courts referred the case to the FCC. The FCC looked in its own WAYBACK machine, back to Hush-a-Phone, and concluded that as long as Carterfone did not harm the network, it was permissible. After all, AT&T was selling a device that did almost exactly the same thing, and if the AT&T device would not cause the collapse of the network, then probably the Carterfone was okay too.
The boundaries of AT&T's market power had shifted. A company that had been built on a telephone equipment patent now faced competition in "customer premises equipment." People could now attach anything they wanted to the network. Well almost. It would take until 1975 and the promulgation of Part 68 for these rules to be fully realized. In explaining its policy objectives for Part 68, the FCC stated
One year after the Carterfone decision, the good folks at the Department of Defense ARPA and UCLA were on the move. Using their newly established rights under Carterfone, these folks plugged a telephone line into something called an IMP (a precursor to a router) and put the ARPANet (the precursor to the Internet) online. Not only did Carterfone impact AT&T's business plan, it was also a necessary precondition to the building of the Internet and the attaching of routers and modems at the ends of the telephone network.
[Note: to be clear, this post is expressing no opinion on the Merit's of the Skype petition I have not even read it yet this post is just a joy ride in the WAYBACK machine]