ork Regulation Basics offering complementary services that competed with the Bell System's proprietary offerings. For example, the Justice Department's 1913 antitrust suit against AT&T was filed at a time when the lapse of the original Bell patents had permitted vigorous competition to emerge in local telephone service, while the Bell System continued to hold key patents needed to provide effective long-distance service. The claim was that the increasing importance of long-distance service put the Bell System in a position to attempt to use its dominant position in long distance to harm competition in local service by refusing to allow any independent local telephone company to interconnect with its long-distance network (discussed in greater detail in Chapter 8). As part of the consent decree settling this action, the Bell System agreed to cease pursuing such tactics and instead to open its long-distance network to all qualified independent local telephone companies. Over the next half century, concern about the Bell System's dominance of long distance would be replaced by concerns about AT&T's dominance of local telephone service. For example, concerns about vertical exclusion arose with respect to the market for customer premises equipment (CPE), which consisted of handsets, answering machines, fax machines, modems, and other devices located in residences and businesses that end users attached to the local telephone network in order to communicate with other parties. 4 Since 1882, the Bell System had granted its manufacturing subsidiary, known as Western Electric, the exclusive right to supply the telephone equipment used in connection with its network. Concern that this exclusivity arrangement enabled AT&T to reduce the competitiveness of the market for CPE led the federal government to bring an antitrust suit against the Bell System in 1949, although that the government eventually settled the suit in 1956 without requiring AT&T to open its network to CPE manufactured by independent providers. 5 The same conc