The divestiture of AT&T in 1982 was undoubtedly a momentous event in the history of the telecommunications industry. It established the long-term direction of telecommunications policy not only in the United States but also in Europe and Japan. Starting with a historical perspective on the US telephone industry, Crandall examines the regulatory and economic issues in the telecommunications industry with an emphasis on the social implications of the divestiture.

The first two chapters of the book contain a brief review of the important transformations occurring in the telephone networks and the current status of the telephone industry in the US. Crandall divides the evolution of telecommunications policy in the twentieth century into three periods: regulation, competition, and the post-divesture period. Differentiated pricing and cross-subsidization of telephone services are identified as the two traditional foundations of AT&T tariffs, and the author argues that these issues constitute the primary motivations behind the regulatory thrust of the telecommunications policy in the United States.

An entire chapter is devoted to the discussion of the current telephone rates and their relationship with the consumer price index and other economic data. Empirical evidence confirms that there has been a rapid growth in the local telephone rates, a decline in the inter-exchange rates, and a dramatic slowdown in the growth of telecommunications common carriers in the post-divestiture period, although the employee productivity of common carriers has consistently increased. The effects of deregulation and the decisions of Computer Inquiries I and II on the telecommunications equipment market are also addressed in these chapters.

The last two chapters examine the fairness of deregulated tariffs and the effects of the divesture on income distribution. The author concludes that the increases in local telephone rates have had no significant adverse effect on low-income consumers. The complexity of the regulatory process due to a multiplicity of services, equipment, and technologies and pressures from various constituents--legislators, carriers, consumers, government, and market forces--is also recognized. The conclusions drawn in the book are supported by numerous tables and empirical economic data from authoritative sources such as the Bureau of Labor Statistics, company annual reports, and FCC reports on the telecommunications industry.

Although it ignores some important technological aspects of deregulation, perhaps inevitably due to its economic and social orientation, I found this book extremely informative and the arguments contained in it persuasive. In an era of global interdependence of telecommunications, a comprehensive sociotechnical perspective on the regulatory issues is indispensable for telecommunications analysts, managers, and policy makers. Crandall’s book provides this perspective with remarkable clarity.