Antitrust and regulation: Forestalling competition in the telecommunications terminal equipment market

This article examines how AT&T responded to competition in the terminal equipment market by requiring a telephone company provided connecting arrangement. We test the hypotheses of whether connecting arrangements were used to protect the integrity of the system or to forestall competition. Through analysis of various antitrust cases, we conclude that AT&T attempted to monopolize the market through the connecting arrangement requirement. This conclusion is important because it suggests that a regulated firm has the ability to use its market power to thwart competition in non-regulated markets.