t of 1996, which opened up local telephone service to competition across the United States. The Act led to the creation of a huge number of new companies, many of which went public quickly and visibly, and which failed, equally visibly, not long afterwards. The Act became law just as the boom was beginning, and in many ways set the direction of the industry, making it an obvious culprit. But readers of mystery novels know that the most obvious "perp" is rarely the one who did it. It is simply wrong to lay the bulk of the blame for the The Great Telecom Meltdown meltdown on the shoulders of the Telecom Act. While its opening of greater competition did have both positive and negative effects on the economy, and its ambiguities were, in the long run, quite harmful, both the boom that was already building up at the time of the Act's passage, and the bust that resulted, were the result of many factors, most of which were set in motion years earlier. Among them were the AT&T divestiture of 1984, the development of fiber optics, the birth of the public Internet, the explosion in wireless telephony, and the novelty of electronic commerce. And while these factors did lead to irra- tional economic behavior and, eventually, huge losses, they alone can hardly be held to blame, either. Rather, they built up to a coincidence of opportunity, during a time of strong economic growth, that provided fertile ground for inves- tors and entrepreneurs alike who, not fully understanding the dynamics of the industry, jumped in with too much capital and too little common sense. This fueled a perfect storm, a confluence of factors that fed on each other, in which the impact of the whole was far larger than the sum of its parts would otherwise have been. The story that will follow begins with the tale of the telecommunications industry from its birth in the nineteenth century up through its greatest debacles in the early twenty-first century. It is the tale of an industry whose feisty, competitive beginnings were almost forgotten as it beca