<P> The Commitment did not settle all the differences between independents and Bell companies, but it did avert the federal takeover many had expected . AT&T was allowed to buy market - share, as long as it sold an equal number of subscribers to independents . Crucially, while the Kingsbury Commitment obliged it to connect its long distance service to independent local carriers, AT&T did not agree to interconnect its local services with other local providers . Nor did AT&T agree to any interconnection with independent long distance carriers . </P> <P> Consequently, AT&T was able to consolidate its control over both the most profitable urban markets and long distance traffic . The Willis Graham Act allowed AT&T to begin acquiring more local telephone systems, with the genial oversight of the Interstate Commerce Commission . By 1924, the ICC approved AT&T's acquisition of 223 of the 234 independent telephone companies . Between 1921 and 1934, the ICC approved 271 of the 274 purchase requests of AT&T . With the creation of the Federal Communications Commission in 1934, the government regulated the rates charged by AT&T . </P> <P> The entire network was nationalized during World War I from June 1918 to July 1919 . Following re-privatization, AT&T resumed its near - monopoly position . In 1956, AT&T and the Justice Department agreed on a consent decree to end an antitrust suit brought against AT&T in 1949 . Under the decree, AT&T restricted its activities to those related to running the national telephone system, and special projects for the federal government . </P> <P> In 1968, FCC regulators intervened when the Bell System tried to prevent a mobile communications system, the Carterfone, from connecting to telephone lines . That decision established the principle that customers could connect any lawful device to the telephone network, even to offer a competing service . In the mid 1970s, emerging long distance competitors like MCI and Sprint faced the same tactic of denying interconnection, which regulators quashed, followed by a series of efforts by the Bell System phone companies to escalate the costs of interconnection as an indirect means of excluding competition . These battles resulted a large amount of antitrust litigation and ultimately led to the 1982 breakup of the Bell System . In 1982, AT&T and the Justice Department agreed on tentative terms for settlement of anti-trust suit filed against AT&T in 1974, under which AT&T divested itself of its local telephone operations, which became known as the "Baby Bells ." In return, the Justice Department agreed to lift the restrictions on AT&T activities contained in the 1956 Consent Decree . </P>

Under terms of the 1956 consent agreement at&t agreed to