The new realism

The tension between AT&T's corporate strategy and its political and economic environments was fast becoming unbearable. John deButts, like Canute, had tried to stem the tide of change, but the waters of competition had risen ever higher. With the court decision allowing MCI's Execunet service to continue, competition reached the heart of Bell's operations, the national switched network. It no longer made sense to decry competition; AT&T was already in competition in many of its most important markets. It was under attack in public and private antitrust suits for its responses to competition. Only in local operations was the firm's position secure and unchanged, but there were indications that competition might emerge even there in the future.

No one saw this situation more clearly than Charles Brown. AT&T's president watched the vitality of the company being drained away by its uniform opposition to change and by the slowness of AT&T's internal reforms. He had expressed his deep concern to deButts, Ellinghaus, and Cashel in December 1977: “We need at this time some careful work on the overall strategies of where this business should be directed. We are entering major cross currents, the forces and directions of which we deal with mainly when action points are reached.”