This picture says it all.

This was the phone under the regulatory environment. For years they stayed pretty similar. The regulated idea of a new product was lighter phones (these were heavy) and finally optional colors were offered. Here is the phone after deregulation.

When a company is a regulated monopoly they have no incentive to change or offer new products.

When Bell Telephone was a monopoly, these black phones are what everybody had. You could have any color as long as you wanted black. When we got our first phone in about 1957 you had to stand or sit close to the phone. One of the “big” innovations was when the phone company added (for a fee) the long cords. My sister succeeded in lobbying for the extension cord. She started carrying the phone in her room so you could not hear her conversation. We 3 older brothers had grown up with everyone being able to hear every conversation because the phone was usually in the living room with the TV.

When Ma Bell was deregulated, competing companies had tremendous incentive to manufacture new products. Competition drove the old, stale products out of the market. They were replaced by ever changing, every improving phones. In fact, the cell phone is such an innovative tool that many young couples do not even have home phones anymore.

This phone sits in a custom made cubbyhole which some families could afford. The phone and the cubbyhole are both in the home of Dan and Barbara Remtle who hosted a meet and greet for us. It is a living reminder of how regulations, if not carefully monitored and updated can stifle jobs, economic growth and product improvement. When the monopoly was broken up and the regulatory environment relaxed, innovations, jobs and economic growth in the phone sector skyrocketed.