When tithing is a bargain..............

     From as early as 1913, AT&T has been battling the U. S. government over its monopoly control of the nation's phone service.  That it was, in fact, a monopoly was undeniable.  If you were making a phone call in the United States at any point between 1930 and 1984, you were almost without exception using AT&T's network.  That monopoly power made the company immensely profitable, since it faced no significant competition.  But for seventy years, AT&T managed to keep the regulators at by by convincing them that the phone network was a "natural monopoly" and a necessary one.  Analog phone circuits were simply too complicated to be run by a hodgepodge of competing firms; if Americans wanted to have a reliable phone network, it needed to be run by a single company.  Eventually, the antitrust lawyers in the Justice Department worked out an intriguing compromise, settled officially in 1956.  AT&T would be allowed to maintain its monopoly over phone service, but any patented invention that had originated in Bell Labs would have to be freely licensed to any American company that found it useful, and all new patents would have to be licensed for a modest fee.  Effectively, the government said to AT&T that it could keep its profits, but it would have to give away its ideas in return.
     It was a unique arrangement, one we are not likely to see again.  The monopoly power gave the company a trust fund for research that was practically infinite, but every interesting idea that came out of that research could be immediately adopted by other firms.  So much of the American success in postwar electronics - from transistors to computers to cell phones - ultimately dates back to that 1956 agreement.  Thanks to the antitrust resolution, Bell Labs became one of the strangest hybrid in the history of capitalism:  a vast profit machine generating new ideas that were, for all practical purposes, socialized.  Americans had to pay a tithe to AT&T for their phone service, but the new innovations AT&T generated belonged to everyone.

-Steven Johnson,  How We Got to Now:  Six Innovations That Made the Modern World