e gang that couldn't shoot straight-unless it was to take a bead on its own foot. Perception matters. Just ask the New York Stock Exchange's for- mer CEO, Dick Grasso. In a matter of months, he went from the per- sonification of corporate courage and resilience, following the September II attacks on the World Trade Center, to Exhibit A of unbri- dled corporate greed. Even retired GE chairman Jack Welch discov- ered how quickly public sentiment could turn-even though he increased his company's market value more than 3,600 percent.4 Imagine, however, that you were unlucky enough to take the most visible job in an industry that was inexorably melting away, your big- gest competitor felt free to slash prices because it was making up its financial results as it went along, and you had to do whatever you were going to do in five years or less. That's the situation that my former boss, Mike Armstrong, parachuted into in 1997. In a sense, this book is his story. But it's also the story of his predecessor, Bob Allen, al- though neither man would tell the tale quite this way. And its roots go even deeper in the company's history, through a series of crossroads that, as it turned out, led only into swamps and dead ends. AT&T at the Crossroads For most of the twentieth century, AT&T was literally "the phone com- pany." It provided telephone service to 90 percent of the country's population as a regulated monopoly. In 1982, AT&T agreed to divest its local telephone companies, breaking up what was known as the Bell System, to settle a federal antitrust suit and to pave the way to resolving a slew of suits filed by competitors. In a sign of the direction that life was taking, in that same week, the government dropped a similar antitrust suit against IBM, and Time magazine named the per- sonal computer its "Man of the Year." Telephony was yesterday's busi- ness. Introduction 3 The breakup was predicated on the idea that local telephone service was a natural monopoly, like water utilities, but long-distance service and equipment 