Consumer watchdogs argue that the proposed merger between MCI Worldcom and Sprint will lead to a duopoly, with AT&T remaining number one. Dimly remembered in today’s deregulated world of telecommunications is that at one time, AT&T’s ability to offer ’one policy, one system, universal service’ had, thanks to PR, commended itself to the nation.
Consumer watchdogs argue that the proposed merger between MCI
Worldcom and Sprint will lead to a duopoly, with AT&T remaining number
one. Dimly remembered in today’s deregulated world of telecommunications
is that at one time, AT&T’s ability to offer ’one policy, one system,
universal service’ had, thanks to PR, commended itself to the
In 1982, AT&T initiated an agreement with the Justice Department to
divest itself of its local phone systems, creating today’s more
But earlier efforts to break up or permanently nationalize the phone
company did not succeed thanks in part to the intelligent conception of
PR practiced by AT&T.
More than just talk
Chester Burger wrote in The Public Relations Quarterly (1967) that
AT&T’s PR success was its realization that ’good public relations come
by providing good service, not merely by talking about it’ and by
listening closely to the public.
At the turn of the century, however, AT&T’s reputation was sagging.
After the Bell System patents expired in the early 1890s, the telephone
industry suddenly became much more competitive. While Bell had exercised
total control over the nation’s phone service in 1893, it had fallen to
51% in 1907. Author John Brooks in Telephone: The First Hundred Years
notes that there were complaints about poor service and business
tactics. At the time, many reformers were advocating state control of
public utilities, including the phone industry. Concerned about its poor
reputation, AT&T hired The Publicity Bureau. But the PR program didn’t
take off until 1907, when Theodore Vail became president of the
As general manager of the American Bell Telephone Company in 1883, Vail
had sent letters to Bell agents inquiring about the reactions of
customers to their service. AT&T PR manager George Griswold wrote in The
Public Relations Quarterly (1967) that upon Vail’s return, an open press
policy was implemented. ’The only policy to govern the publicity is that
whatever is said or told should be absolutely correct, and that no
material fact, even if unfavorable ... should be held back,’ he quotes
Vail as having announced.
Later, Vail would insist, ’If we don’t tell the truth about ourselves,
someone else will.’
The first report Vail issued to shareholders included a section titled
’Public Relations’ that held the most sophisticated view of PR - that it
is concerned with all the company says and does that impacts key
publics, and is not just confined to a publicity program.
Vail argued that competition led to wasteful duplication in providing a
phone service, but also asserted that ’if there is to be no competition,
there should be public control’ provided that the regulators
acknowledged that capital required a ’fair return’ on investment. Later,
some officials in the newly installed Wilson administration were
considering nationalizing the phone system. AT&T, in what is known as
the ’Kingsbury Commitment,’ helped to forestall such moves by agreeing
to allow competitors to use Bell lines and to seek regulatory approval
when it came to takeovers of competitors.
Vail had instituted an institutional ad campaign, but the Bell system
also backed up the advertising with a massive, integrated system of
public relations activities. A federal takeover of the phone system did
occur during World War I but ended quickly. Historian Roland March
writes that Vail and AT&T believed their decade-long PR campaign helped
contribute to the quick return of control.
Former AT&T VP for PR Ed Block notes that the success of Vail and his
publicity manager James Drummond Ellsworth was furthered by Arthur Page,
the first PR director to hold the rank of VP in a corporation. Page,
noted Block in a 1979 lecture at Ball State University, ’was able to
further institutionalize - and broaden - the practice of public
relations within the business.’
Page believed, like Vail, that businesses needed public approval to
operate in a democratic society. Therefore, the corporation’s ability to
provide good service was of the utmost importance. Under Page’s
leadership, Bell started to make regular use of public opinion surveys
to monitor attitudes toward the Bell system. Furthermore, Page stressed
that employees were important because their manner in dealing with
customers would provide the benchmark that would help determine how
consumers judged AT&T. Given the status of AT&T as a virtual monopoly,
Page made sure customers saw Bell not as a lethargic organization, but
committed to innovation and quality service.
’It took a long time for the idea to get into practice that everything
said and done by the Bell System should be considered as to its
acceptability by the public,’ Page would write. But it was important
that the policies be put into practice because Page stressed, ’Public
relations is 90% doing and 10% talking about it.’
In keeping with Vail’s policy of openness, AT&T proved cooperative when
the company came under investigation by the Federal Communications
Commission in 1935. Fortune magazine in March 1939 credited AT&T’s PR
strategies as having helped the corporation avoid serious action by the
PR continued to play an important role at AT&T, but a reaction against
’bigness’ in corporations and other institutions started taking
In 1974, the Justice Department filed an anti-trust suit against
Mike Keady and Rich Dunshee, authors of the paper ’A Heritage of
Excellence: Public Relations at AT&T,’ fault the company for failing to
heed Vail’s belief that the company ’conform itself to the public’s
wishes.’ The public, they note, wanted competition in telecommunications
but AT&T backed legislation in Congress to restrict competition.
Getting out of the game
In hindsight, says Block, Keady and Dunshee offered fair criticism. The
public and the big customers were not yelling for a breakup by any
means, but clearly desired better cost and pricing options. But Block
thinks the monopoly would have been difficult to sustain anyway because
of changes in technology.
The 1982 agreement forged between AT&T and the Justice Department came
about because AT&T’s management was worried about the shape of
legislation in Congress and the anti-trust case was in trial. If no
settlement was reached, the judge would impose the terms.
The company agreed to divest itself of the local Bells, but remained
active in the long-distance and equipment markets. Now the
telecommunications business is changing once more in the era of the
Internet. AT&T will be tested once again on how well it adheres to the
principles of Vail, Ellsworth and Page in facing these new challenges.
Current VP for PR Dick Martin says the precepts of the three are alive
and well: ’I try to live up to that standard.’