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# The Kingsbury Commitment Promised Competition. AT&T Got 98% of Long Distance
- URL: https://broadbandbreakfast.com/the-kingsbury-commitment-promised-competition-at-t-got-98-of-long-distance/
- Published: 2026-09-02T12:25:42.000Z
- Updated: 2026-09-02T12:33:00.000Z
- Description: In the illustration, J.P. Morgan is depicted as an Octopus trainer, AT&T President Theodore Vail says 'perfectly abhorrent,' and the dog, representing independent companies, says 'I'm next.'
- Author: Broadband Breakfast
- Tags: Telecom 150, 1913 Kingsbury Commitment, Theodore Vail, Universal Service, Adam Thierer, Woodrow Wilson, Arthur Burleson, Nathan Kingsbury, #with-siderail, AT&T, Interstate Commerce Commission, #no-flux

*This article summarizes several of the key points in* [*Lesson 2: Differences Between the Telephone and the Telegraph*](https://broadbandbreakfast.com/lesson-2-differences-between-the-telephone-and-the-telegraph/)*, which is part of Broadband Breakfast's online course, "*[*150 Years of American Telecommunications*](https://chat.broadbandbreakfast.com/c/section-a-of-150-years-of-telecommunications?ref=broadbandbreakfast.com)*." A new lesson will be released every Monday.*

One letter to the attorney general stopped the federal government from suing to break up the largest telephone company in the country. That same letter, known ever since as the Kingsbury Commitment, set the terms on which that company, AT&T, bought out its rivals for the next two decades.

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The letter went out on Dec. 19, 1913, sent by AT&T vice president **Nathan Kingsbury**. The Bell System, consisting of AT&T and the local telephone companies it controlled, held about half the telephones in the country in 1907\. Independent companies operating outside Bell owned the rest.

Bell's share climbed for the next quarter century. By 1939 it held 83 percent of American telephones and 98 percent of the long-distance wire.

To see more about the letter and the slogan that preceded it, "One Policy, One System, Universal Service," open to Lesson 2 of 150 Years of American Telecommunications, the 35-lesson Broadband Breakfast course.

### *6,000 companies, and two telephones on one desk*

Bell held nearly every telephone in the country in 1894, then that number dropped to half by 1907\. Its second fundamental patent lapsed on Jan. 30, 1894, and roughly [6,000 independent companies launched in the years after](https://www.richmondfed.org/-/media/richmondfedorg/publications/research/econ%5Ffocus/2019/q4/economic%5Fhistory.pdf?ref=broadbandbreakfast.com), most of them in towns Bell had never wired.

The bigger ones then moved into Bell's cities and strung a second set of wires.

Hundreds of towns ended up with two telephone systems, with a problem. A customer on one could not call a customer on the other.

AT&T's president in 1907, **Theodore Vail**, campaigned against this divided service with a slogan that outlasted him by seventy years. "One Policy, One System, Universal Service" now [entered the company's national advertising in 1908](https://www.telcomhistory.org/NewsletterArchivesWinter2007.shtml?ref=broadbandbreakfast.com).

Vail's intention was to sell one set of wires, not cheap, subsidized, or affordable telephones. He wanted every subscriber in the country reachable from every other, which meant the rival systems had to be bought or joined.

In an [1910 annual report](https://mises.org/mises-wire/telephone-political-entrepreneurship-and-theodore-n-vail?ref=broadbandbreakfast.com), Vail gave shareholders the economics. Rival exchanges, he argued, would duplicate wires, conduits, and switchboards while pursuing the same customers. One regulated company could concentrate that investment in a single network, earn stable returns, and attract the capital needed for further expansion.

“Inconsistent with each other,” he wrote of competition and regulation. Universal service, in effect, became the argument for monopoly.

Vail pursued that vision by buying independent telephone companies. AT&T’s continued acquisitions, and its refusal to connect the rivals that remained, brought federal antitrust intervention in 1913.

### *Three promises in one letter*

AT&T settled to avoid a breakup and a government takeover, and surrendered very little to do it. Postmaster General **Albert Burleson** was already pressing for federal ownership of interstate communications. Five years after the settlement, [the Post Office ran the telephone system from Aug. 1, 1918, to Aug. 1, 1919](https://www.cato.org/sites/cato.org/files/serials/files/cato-journal/1994/11/cj14n2-6.pdf?utm%5Fsource=chatgpt.com) under his control.

Kingsbury’s Dec. 19 letter, later known as the Kingsbury Commitment, promised three things.

First, AT&T would sell the roughly 30 percent stake it had bought in Western Union, the country’s dominant telegraph company, in 1909\. That purchase had made Vail president of both companies.

Second, AT&T would stop buying competing independent telephone companies whenever the Interstate Commerce Commission, the federal regulator overseeing interstate telephone service since 1910, objected.

Third, it would let independent exchanges, the local networks operating outside the Bell System, connect to its long-distance lines.

Attorney General **James Clark McReynolds** and President **Woodrow Wilson** both declared a victory for competition. McReynolds said the settlement had protected competition in telephone and telegraph service across the country.

Each concession, however, cost less that it seemed. Selling Western Union ended Vail’s control of the country’s dominant telegraph company, but Western Union had never become a successful rival in long-distance telephone service, so divesting took nothing from AT&T in that market.

Additionally, the interconnection offer gave independent subscribers limited access to Bell’s network, but only on Bell’s terms. It only applied to exchanges more than fifty miles apart and added ten cents to the regular toll for every call. The entire call had to travel over Bell wires under Bell operators.

An independent subscriber could call someone on a Bell exchange, but a Bell subscriber could not place the same call into an independent exchange. Independent telephone companies gained access to Bell customers, but they could not compete for those customers or build a rival long-distance network.

The acquisition restriction weakened next. In 1914, the attorney general’s office allowed Bell to buy an independent system in a town served by competing networks. In 1917, [the Justice Department allowed Bell to buy an independent system if it sold the same number of telephone stations, meaning customer connections, to independents elsewhere](https://historyofcomputercommunications.info/section/2.8/Monopoly-Asserted-1918-1934/?utm%5Fsource=chatgpt.com).

That rule let Bell and the independents trade customers across different regions. Instead of preserving two competing systems in the same town, the trades increasingly left either Bell or an independent company alone in each territory.

### *271 of 274 acquisition requests approved*

Congress then passed the [Willis-Graham Act in 1921](https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=3246&context=lcp&ref=broadbandbreakfast.com), ending the Kingsbury acquisition restriction and allowing telephone companies to consolidate with approval from the Interstate Commerce Commission (ICC) instead of its initial jurisdiction under Justice Department antitrust enforcement.

The commission rarely got in the way. Between 1921 and 1934, it approved 271 of 274\. Those approvals allowed AT&T to continue buying local telephone systems across the country.

The Bell System held 64 percent of the country’s nearly 14 million telephones in 1921\. By 1939, it held 83 percent of all telephones and 98 percent of the long-distance wire. Most telephone customers used Bell locally, and nearly every long-distance connection depended on Bell.

On the settlement’s hundredth anniversary, then-FCC Commissioner **Ajit Pai** called it [“a wolf in sheep’s clothing”](https://docs.fcc.gov/public/attachments/DOC-324810A1.pdf?ref=broadbandbreakfast.com). He argued that officials had presented the three promises as protections for competition even though served to leave AT&T’s control largely intact.

The Kingsbury Commitment did not end Bell’s consolidation. The Justice Department loosened the acquisition restriction in 1914 and 1917\. Congress replaced it with ICC approval in 1921.