 switch strategies in 1907, when the New York-based Baker-Morgan banking interests took control from the Boston-based Forbes family and replaced company president Frederick Fish with 23 Bornholz and Evans (1983); Weiman and Levin (1994); Mueller (1997). Johnston (1908) also describes the dramatic drop in the Bell System's rates. Networks in Telecommunications Theodore Vail. The Bell System stopped trying to outbuild the independents and instead attempted to coopt them through a pair of classic anticompetitive tactics. The first was merger to monopoly, in which the Bell System offered to buy out key competing systems. If the independent refused, the fallback strategy was division of markets, in which the Bell System agreed to withdraw from the independent tele- phone company's service area in return for the independent's promise to restrict its activities to a "small and compact" territory and the agreement to interconnect exclusively with the Bell System's long-distance network. The Bell System combined these classic anticompetitive strategies with an aggressive public relations campaign emphasizing the inconvenience and wasteful duplication associated with maintain- ing two different telephone systems and the benefits of being able to contact all telephone subscribers through a single network. The primary downside to the dis- appearance of competition would be the simultaneous disappearance of downward pressure on rates. Vail's response to this concern was to drop Bell's longstanding opposition to government intervention and instead to endorse direct regulation of telephone rates (AT&T 1908, 1911; Vail 1913; U.S. House 1939). The primary beneficiary of unified service and the concomitant elimination of price competition would not be consumers, but rather the shareholders of the Bell System. Unification of local telephone service also benefited those classes of business that depended on the ability to contact regional and national business centers, such as banks, railroads, hotels, and wholesale suppliers, and th