IN ONE DAY'S WORK, the Justice Department has transformed the communications and data processing industries. It was absolutely right to get both the AT&T and the IBM cases out of the courtroom. These two cases had long since demonstrated that traditional antitrust litigation was unable to deal adequately with the enormous interests here. But whether the AT&T settlement is the right one remains very much an open question. It is now the urgent responsibility of Congress to review that agreement with great care.
When these two antitrust cases were launched, in 1969 and 1974 respectively, each of the companies was accused of suppressing competition within its own field. As time passed, it became evident that the two fields were increasingly the same and the two companies were, at least potentially, each others' largest competitor. While the cases were grinding doggedly along in the courts, technology had been transforming the nature of these businesses. The distinctions among the origination of information, processing it and transmitting it were disappearing into the computers.
Each of these companies is one of the world's great repositories of scientific and engineering ability. There is an imperative national interest in encouraging the development of their technologies as vigorously as possible. You have heard a lot about the aging industries that are, sadly, in decline. IBM and AT&T represent a new one that's on the rise and, for the future strength of the national economy, it may be the most important industry of all.
The Justice Department's decisions seem, on a first hasty appraisal, to have the virtue of encouraging technological development. The AT&T settlement permits one of these companies, with the formidable resources of the Bell Laboratories, to go into the unregulated business of information processing. Dropping the IBM suit relieves the other company of a wearing and costly diversion. But no one can answer the next question--whether the rising competition between those two, and the other companies in the same field, will actually prove productive and beneficial both to the technology and to the customers.
The social costs are not likely to be neglible. Local phone charges will rise. It's also possible that disparities in quality of service will emerge among the local companies. The corporate connection between local and long-distance service has, in the past, kept the system highly responsive to the individual user. Will it begin to be less accessible to the individual, as the long-distance companies go for the high-volume business of computers talking to each other? That, among many others, is an issue for Congress to consider.
Whenever we address this subject, our readers must remember that this newspaper, like every other, has a direct business interest in the outcome. Any company conveying information is a commercial competitor of ours. The terms of that competition will be strongly influenced by the nature of the AT&T settlement, and of any legislation that may follow it.
The implications of Friday's decisions at the Justic Department will not be fully visible for some considerable time to come. You can only say that they will affect not only the ways in which Americans talk to each other in years ahead, but the ways in which they earn their livings and spend their leisure--and perhaps the ways in which they think about time and space.