Chapter 1-5
Hacker Crackdown

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In 1983, Ma Bell corporate entities.
The core of the company became AT&T Communications,
and also AT&T Industries (formerly Western Electric,
Bell's manufacturing arm).  AT&T Bell Labs became Bell
Communications Research, Bellcore.  Then there are the
Regional Bell Operating Companies, or  RBOCs, pronounced "arbocks."

Bell was a titan and even these regional chunks are gigantic enterprises:
Fortune 50 companies with plenty of wealth and power behind them.
But the clean lines of "One Policy, One System, Universal Service"
have been shattered, apparently forever.

The "One Policy" of the early Reagan Administration was to
shatter a system that smacked of noncompetitive socialism.
Since that time, there has been no real telephone "policy"
on the federal level.  Despite the breakup, the remnants
of Bell have never been set free to compete in the open marketplace.

The RBOCs are still very heavily regulated, but not from the top.
Instead, they struggle politically, economically and legally,
in what seems an endless turmoil, in a patchwork of overlapping federal
and state jurisdictions.  Increasingly, like other major American corporations,
the RBOCs are becoming multinational, acquiring important commercial interests
in Europe, Latin America, and the Pacific Rim.  But this, too, adds to their
legal and political predicament.

The people of what used to be Ma Bell are not happy about their fate.
They feel ill-used.  They might have been grudgingly willing to make
a full transition to the free market; to become just companies amid
other companies.  But this never happened.  Instead, AT&T and the RBOCS
("the Baby Bells")  feel themselves wrenched from side to side by state
regulators, by Congress, by the FCC, and especially by the federal court
of Judge Harold Greene, the magistrate who ordered the Bell breakup
and who has been the de facto czar of American telecommunications
ever since 1983.

Bell people feel that they exist in a kind of paralegal limbo today.
They don't understand what's demanded of them.  If it's "service,"
why aren't they treated like a public service?  And if it's money,
then why aren't they free to compete for it?  No one seems to know,
really.  Those who claim to know  keep changing their minds.
Nobody in authority seems willing to grasp the nettle for once and all.

Telephone people from other countries are amazed by the
American telephone system today.  Not that it works so well;
for nowadays even the French telephone system works, more or less.
They are amazed that the American telephone system STILL works
AT ALL, under these strange conditions.

Bell's  "One System" of long-distance service is now only about
eighty percent of a system, with the remainder held by Sprint, MCI,
and the midget long-distance companies.  Ugly wars over dubious
corporate practices such as "slamming" (an underhanded method
of snitching clients from rivals) break out with some regularity
in the realm of long-distance service.  The battle to break Bell's
long-distance monopoly was long and ugly, and since the breakup
the battlefield has not become much prettier.  AT&T's famous
shame-and-blame advertisements, which emphasized the shoddy work
and purported ethical shadiness of their competitors, were much
remarked on for their studied psychological cruelty.

There is much bad blood in this industry, and much
long-treasured resentment.  AT&T's post-breakup
corporate logo, a striped sphere, is known in the
industry as the "Death Star"  (a reference from the movie
Star Wars, in which the "Death Star" was the spherical
high- tech fortress of the harsh-breathing  imperial ultra-baddie,
Darth Vader.)  Even AT&T employees are less than thrilled
by the Death Star.  A popular (though banned) T-shirt among
AT&T employees bears the old-fashioned Bell logo of the Bell System,
plus the newfangled striped sphere, with the before-and-after comments:
"This is your brain--This is your brain on drugs!"  AT&T made a very
well-financed and determined effort to break into the personal
computer market;  it was disastrous, and telco computer experts
are derisively known by their competitors as "the pole-climbers."
AT&T and the Baby Bell arbocks still seem to have few friends.

Under conditions of sharp commercial competition, a crash like
that of January 15, 1990 was a major embarrassment to AT&T.
It was a direct blow against their much-treasured reputation
for reliability.  Within days of the crash AT&T's
Chief Executive Officer, Bob Allen, officially apologized,
in terms of deeply pained  humility:

"AT&T had a major service disruption last Monday.
We didn't live up to our own standards of quality,
and we didn't live up to yours. It's as simple as that.
And that's not acceptable to us.  Or to you. . . .
We understand how much people have come to depend
upon AT&T service, so our AT&T Bell Laboratories scientists
and our network engineers are doing everything possible
to guard against a recurrence. . . .  We know there's no way
to make up for the inconvenience this problem may have caused you."

Mr Allen's "open letter to customers" was printed in lavish ads
all over the country:  in the Wall Street Journal, USA Today,
New York Times, Los Angeles Times, Chicago Tribune,
Philadelphia Inquirer, San Francisco Chronicle Examiner,
Boston Globe, Dallas Morning News, Detroit Free Press,
Washington Post, Houston Chronicle, Cleveland Plain Dealer,
Atlanta Journal Constitution, Minneapolis Star Tribune,
St. Paul Pioneer Press Dispatch, Seattle Times/Post Intelligencer,
Tacoma News Tribune, Miami Herald, Pittsburgh Press,
St. Louis Post Dispatch, Denver Post, Phoenix Republic Gazette
and Tampa Tribune.

In another press release, AT&T went to some pains to suggest
that this "software glitch" might have happened just as easily to MCI,
although, in fact, it hadn't.  (MCI's switching software was quite different
from AT&T's--though not necessarily any safer.)  AT&T also announced
their plans to offer a rebate of service on Valentine's Day to make up
for the loss during the Crash.

"Every technical resource available, including Bell Labs
scientists and engineers, has been devoted to assuring
it will not occur again," the public was told.  They were
further assured that "The chances of a recurrence are small--
a problem of this magnitude never occurred before."

In the meantime, however, police and corporate
security maintained their own suspicions about
"the chances of recurrence" and the real reason why
a "problem of this magnitude" had appeared, seemingly
out of nowhere.  Police and security knew for a fact
that hackers of unprecedented sophistication were illegally
entering, and reprogramming, certain digital switching stations.
Rumors of hidden "viruses" and secret "logic bombs"
in the switches ran rampant in the underground,
with much chortling over AT&T's predicament,
and idle speculation over what unsung hacker genius
was responsible for it.  Some hackers, including police
informants, were trying hard to finger one another
as the true culprits  of the Crash.

Telco people found little comfort in objectivity when
they contemplated these possibilities.  It was just too close
to the bone for them; it was embarrassing; it hurt so much,
it was hard even to talk about.

There has always been thieving and misbehavior in the phone system.
There has always been trouble with the rival independents,
and in the local loops.  But to have such trouble in the core
of the system, the long-distance switching stations,
is a horrifying affair.  To telco people, this is
all the difference between finding roaches in your kitchen
and big horrid sewer-rats in your bedroom.

From the outside, to the average citizen, the telcos
still seem gigantic and impersonal.  The American public
seems to regard them as something akin to Soviet apparats.
Even when the telcos  do their best corporate-citizen routine,
subsidizing magnet high-schools and sponsoring news-shows
on public television, they seem to win little except public suspicion.

But from the inside, all this looks very different.
There's harsh competition.  A legal and political system
that seems baffled and bored, when not actively hostile
to telco interests.  There's a loss of morale, a deep sensation
of having somehow lost the upper hand.  Technological change
has caused a loss of data and revenue to other, newer forms
of transmission.  There's theft, and new forms of theft,
of growing scale and boldness and sophistication.
With all these factors, it was no surprise to see the telcos,
large and small, break out in a litany of bitter complaint.

In late '88 and throughout 1989, telco representatives
grew shrill in their complaints to those few American law
enforcement officials who make it their business to try to
understand what telephone people are talking about.
Telco security officials had discovered the computer-
hacker underground, infiltrated it thoroughly,
and become deeply alarmed at its growing expertise.
Here they had found a target that was not only loathsome
on its face, but clearly ripe for counterattack.

Those bitter rivals: AT&T, MCI and Sprint--and a crowd
of Baby Bells:  PacBell, Bell South, Southwestern Bell,
NYNEX, USWest, as well as the Bell research consortium Bellcore,
and the independent long-distance carrier Mid-American--
all were to have their role in the great hacker dragnet of 1990.
After years of being battered and pushed around, the telcos had,
at least in a small way, seized the initiative again.
After years of turmoil, telcos and government officials were
once again to work smoothly in concert in defense of the System.
Optimism blossomed; enthusiasm grew on all sides;
the prospective taste of vengeance was sweet.