The Federal Communications Commission yesterday ended Western Union's 36-year telegraph monopoly, issuing a landmark decision allowing open entry into the public message field.
In the same proceeding, the FCC approved an application from New Jersey-based Graphnet Systems Ins. to become Western Union's first competitor.
The FCC action affects services that bring Western Union about $95 million in annual revenues. But, FCC officials ponted out, telegram service is a fraction today of what it used to be.
In 1945, only two years after a merger between Western Union and Postal Telegraph created a virtual monopoly under government approval, more than 244 million telegrams were sent in the United States.Last year, only 5 million were sent, largely due to a combination of increasing telegram costs and decreasing costs in long distance telephone service.
Another service offered by Western Union through the post office, Mailgram, did result in another 28 million message, however.
The FCC decision ending the monopoly also opened up the door to Western Union's ending of unprofitable service in s everal areas which it felt obligated to maintain b ecause of the monopoly.
"We welcome competition so long as we are free to compete on the same basis as any new entrant to the m arketplace," a Western Union spokesman said yesterday. "We expect the FCC's final order to afford us the flexibility to set rates and service standards to meet whatever competition develops."
The FCC said it would develop orderly procedures for the market change within the next three months.
Western Union said it had anticipated the FCC action and developed plans to protect its revenue base. Telegrams now represent less than 10 percent of Western Union's revenues.
"In any e vent," the spokesman said, "we foresed no immediate or drastic impact on revenues." Western Union impact on revenues." Western Union had also been forced to divest its international operations when it was given the domestic monopoly in 1943, and legislation is now pending in Congress to allow it to resume overseas operations.
Graphnet spokesman Barry Yampol said in a telephone interview "we're elated... they gave us even more than we expected."
Yampol said Graphnet has had contracts with the three largest international message companies -- RCA Global, ITT World Communications and Western Union International (not a part of Western Union) -- for three years that would give Graphnet more than half of all incoming international business. Such business involves the relay of international messages once they come to the U.S. Presently, Western Union has all of that business.
"We are already involved in all aspects of telecommunications but have been refrained from fully interconnection," Yampol said. "We have spent $750,000 fighting Western Union to get this."
The Graphnet spokesman said the $20 million company stands to e arn at least $4.59 million in profits this year alone on international business it will now be allowed to get. It's total earnings for last year were $4 million.
Graphnet has a nationwide electronic mail and data communications network that used message-switching computers to deliver what are called "Faxgrams" to machines already in place at the receiving locations. It is used predominantly by business customers.