us were the only customers that felt compelled to purchase service from both the Bell System and the independents. Unified service provided few benefits to small businesses and residences, who placed a substantially lower value on the ability to contact a broader range of people. For example, in the case of Norfolk, Virginia, the Bell System's acquisition of the independent allowed the 700 business customers who purchased both services to reduce their monthly charges by 25 percent. The 2,100 business customers who previously only purchased one service would pay higher rates, an increase of 20 percent for customers served by Bell prior to the merger and an increase of 100 percent for customers previously served by the independent (Weiman and Levin 1994). It was the business users who subscribed to both systems who provided the key political support for the government's eventual acquiescence in the return of monopoly. After some initial resistance, the independents decided to cooperate with the Bell System's efforts. Having already built out much of the unserved areas of the country, the independents had faced a transition to the far more demanding strategy of pursuing more intensive development of established markets. Bell merg- ers with selected independents also fragmented their ability to provide short-haul long-distance service by directly interconnecting adjacent exchanges, despite Bell's assurances to the contrary, until the Bell System's so-called Vail Commitment of 1912 promised to leave the independent toll-line connections established by any acquired company unchanged. The independents' efforts to establish their own long-distance network were hampered by the fact that they were not a unified The Regulation of Local Telephone Networks enterprise, which made coordination difficult and left them vulnerable to divide- and-conquer strategies, as well as by the Morgan banking interests' ability to persuade the Widener family to withdraw its financial support. Faced with dim prospects, the independents realize