The Deal of the Century: The Breakup of AT&T

by Steve Coll

In an early review of which specific programs, weapons systems, and policies were needed to bolster the nation’s defenses, Weinberger heard from the Defense Communications Agency (DCA) that, in its opinion, dismissal of U.S. v. AT&T should be one of the secretary’s highest priorities. The DCA worked closely with AT&T to design, maintain, and operate the strategic communications network that served military, intelligence, and other national security services. Among other things, this “defense net,” as the system was sometimes called, provided for sophisticated communications between political and military officials in the event of a nuclear crisis. It was the opinion of the DCA staff, as well as of its leader, General Hillsman, that if the Justice department succeeded in breaking up AT&T, the nation’s defense communications system would be severely impaired and its national security threatened. Of course, the communications experts DCA relied on in formulating this view were AT&T employees, who were not likely to offer objective analysis of U.S. v. AT&T. And it was also true that by relying on a centralized, large “sole supplier” such as AT&T for communications, Pentagon bureaucrats enjoyed both convenience and protection from mistakes by smaller, potentially unreliable contractors. The cozy relationship between DCA and AT&T no doubt predisposed the defense department to defend the phone company against the Justice lawsuit. Nonetheless, it was an unavoidable fact that Penta...