niche markets. The number of independents that actually competed with Bell declined, whereas new independents provided service to ever-more-rural territories. The 1921 Willis-Graham Act explicitly favored a regulated monopoly structure, allowing competitive local providers to merge. None of the remaining competitive independents survived the Great Depres- sion. By the time the Communications Act of 1934 was passed, creating the Federal Communications Commission (FCC), there was no dispute that tele- communications was a regulated monopoly industry. AT&T's Bell System tele- phone companies controlled about four-fifth's of the country's telephone lines, whereas several thousand independents provided service to the rest, mostly in rural areas. AT&T's monopoly only grew tighter over the years. Not only did the regulated telephone companies provide both local service and the sole access to long distance, but they also had a legal monopoly on "terminal equipment," devices such as telephone sets and switchboards that attached to the network. A narrow exception was carved out for press Wirephoto machines, based on the First Amendment's guarantee of freedom of the press. In 1949, as the national television networks were being developed, the FCC denied the broadcasters per- mission to own their own microwave relay networks. It essentially turned over the civilian part of the microwave spectrum to AT&T's control, forcing ABC, NBC, and CBS to interconnect their stations via AT&T's service. That mid- century period was the height of the monopoly's power. One could not compete with AT&T, and one could not even self-provision services that AT&T was willing to offer, or for that matter some services that AT&T might be able to offer, even if it chose not to. Ma Bell and Her "Natural Monopoly, 1876-1969 The Slow Pace of Progress As a protected monopoly, AT&T had little concern about competitors develop- ing new technology. Its own research arm, Bell Labs, was responsible for many breakthroughs, but many of these seemed to be at cr