Last month we discussed the role of the presidency in formulating ­antitrust policy, pointing out the fallacy of the view that the Antitrust Division of the Department of Justice has historically been (or should be) completely independent of the White House. We posited that history shows that the Antitrust Division's ­enforcement decisions have been (and should be) a product of informed presidential policy and that past presidents have ­attempted to apply the Sherman Act in a way that balances the panoply of ­challenges, both foreign and domestic, that every president elected by the people ­invariably faces.

Last month's article covered the history of the Sherman Act from President Theodore Roosevelt's decision to go head-to-head with J.P. Morgan and challenge the legality of J.P. Morgan's powerful Northern Securities Co. to President John F. Kennedy's threat to use of the Sherman Act against the powerful steel industry to curb inflation. While Roosevelt and Kennedy may be two of the more colorful figures in the history of antitrust enforcement, they are not the only presidents to leave their mark on the Sherman Act.

President Ronald Reagan

President Ronald Reagan inherited one of the largest antitrust cases in history. In 1974, the Gerald Ford administration's Department of Justice sued AT&T for ­violations of the Sherman Act. The Department of Justice (DOJ) was particularly concerned by the alleged conduct of AT&T's subsidiary equipment manufacturer Western Atlantic and research department Bell Laboratories. According to the DOJ, Western Electric had a virtual monopoly in the manufacture of telephone equipment, and Bell Laboratories was responsible (in large part) for ­developing UNIX, an ­operating system that formed the backbone of the nascent internet (although a consent decree prevented AT&T from itself capitalizing on UNIX).

More so than many antitrust cases, the AT&T litigation had significant national and foreign political consequences. Many ­argued that a unified and regulated ­telephone network provided significant value to consumers and ensured stability in an industry that had national security implications. In 1981, Defense Secretary Caspar Weinberger testified before the Senate that he had sent a letter to Attorney General William Smith requesting that the case be dropped for national defense reasons. Others argued that the lack of competition in the telecommunications industry threatened ­innovation and resulted in higher consumer prices. Assistant Attorney General William Baxter (Attorney General William Smith recused himself) rejected the Department of Defense's concerns and pledged to “litigate to the eyeballs.”