nals for the IBM mainframe world, were met with legal resistance. AT&T attempted to file a tariff for the Teletype 40/4, an IBM-compatible ter- minal cluster, but the FCC refused, on Computer I grounds, to consider it a telecommunications service [2]. The product thus could not be marketed. By the 1970s, the computer industry was one of the major growth engines of the American economy, and AT&T saw itself as stuck on the sidelines. It had computer skills in-house: The Western Electric 1ESS Electronic Switching Divestiture: Equal Access and Chinese Walls System, first commercially deployed in 1965, used a computer of Western's own design [3]. In 1969, a small team of programmers at Bell Labs put together the first Unix operating system, which grew increasingly popular during the 1970s as it was distributed to universities where a generation of computer sci- ence students learned it. It too could not be sold as a commercial venture under the terms of the Final Judgment. An obvious solution to this problem would have been for AT&T to divest itself of its manufacturing operations. Although the FJ had made Western Elec- tric into a docile component of an integrated monopoly, its role in an increas- ingly competitive industry remained open to question. Western Electric's prices to the Bell System licensees, while generally not made public, were known to be competitive. But even its pricing structure was problematic: Since its products were not sold on the open market, the price paid by Bell System licensees [4] was essentially an internal transfer rate. It consisted of a direct cost and a markup, the latter differing based on which "product line" the item was assigned to. Pub- lic utility commissions performing cost studies sometimes questioned whether a given product was assigned to the right product line. For example, when Dimension PBX was introduced, Western assigned it to a product line that had a lower markup than the one used for earlier PBXs. Some states viewed this as anti-competitive. Legislative and Antitrus