Haakon Romnes

March 2, 1907 (age 65)

Stoughton, Wisconsin, United States

During the summer vacation preceding his senior year he worked as a telephone installer for the Wisconsin Bell Telephone Company, a subsidiary of the American Telephone and Telegraph Company (AT&T). After graduating with a degree in electrical engineering in 1928, he joined AT&T's Bell Telephone Laboratories in New York City as a circuit designer. Romnes transferred to AT&T's engineering department in 1935, and held a series of technical positions during the following twenty years. Romnes had widely acknowledged technological expertise, and had a number of patents issued for his equipment designs. AT&T placed higher value on engineering and production expertise rather than marketing ability, since it was an era when competition was just starting. He also served briefly in 1950 as an operating officer at Illinois Bell Telephone Company in Chicago. As vice-president of AT&T during the period 1952-1959, he oversaw the design and early implementation of AT&T's direct distance dialing network for long-distance calls. From 1959 through 1963 Romnes was president of Western Electric, the manufacturing subsidiary of AT&T. While he was president of Western Electric, he initiated the Equal Employment Opportunity policy (in addition, Romnes was always a supporter of the National Urban League and the United Negro College Fund). He became AT&T president in 1965, and chairman and CEO when Frederick Kappel retired from those posts in February 1967. Romnes headed AT&T at a time when the public consensus over telecommunications regulation was dissolving. During the previous fifty years the American public had accepted AT&T's argument concerning the necessity for end-to-end telephone service run exclusively by AT&T. Government regulators not only prevented competition in local telephone services, which everyone considered a "natural monopoly, " they also enforced AT&T's policies of prohibiting customers from connecting non-AT&T telephone equipment in their homes and businesses or allowing the use of alternative long-distance transmission facilities. During the 1950's and 1960's new technology involving computers and microwaves prompted many firms to begin offering various telecommunications services outside of AT&T's Bell system. Telephone customers began seeking interconnection with non-AT&T long-distance facilities, as well as the use of customer premises telephone equipment (CPE) not manufactured by AT&T. In 1968 the Federal Communications Commission (FCC) ruled in the Carterphone case that non-AT&T CPE could be connected with AT&T lines. Subsequent rulings by the FCC and the courts allowed Microwave Communications, Inc. (MCI) and other alternative long-distance phone companies to compete with AT&T. AT&T had to develop new policies in response to this competition. It initially allowed the connection of "foreign" (non-AT&T) CPE only when mediated by a mandatory AT&T-provided protective coupling arrangement (PCA). But the FCC commissioned studies that concluded that PCAs were overpriced and unnecessary, and then adopted a policy of allowing the interconnection of any CPE that met minimum technical standards set by the FCC. Meanwhile, AT&T responded to long-distance competition by enacting a special TELPAK tariff, which offered lower prices for private lines to customers wooed by competing carriers, but the FCC eventually ruled that the TELPAK tariff was an illegal exercise of anticompetitive market power. While fighting these regulatory battles, AT&T initiated a number of technical advances. In addition to having responsibility for approving (or disapproving) all major changes, Romnes was AT&T spokesman who announced major innovations at press conferences. AT&T began replacing electromechanical switches with completely electronic facilities to allow a shift from analog to digital transmission. It transformed long-distance usage by introducing the popular "800" service, and developed the sophisticated UNIX computer operating system. AT&T was less successful when it introduced the Picturephone in 1968; Romnes incorrectly predicted that it would "be in very considerable use within less than ten years. " Meanwhile, telephone service in New York City and other major cities deteriorated as the result of unanticipated demand and inadequate maintenance. AT&T contended that this deterioration was due to regulators' slow response to requests for telephone rate increases, which failed to take sufficient account of the rapid inflation of that period. Romnes eventually worked out a new AT&T corporate policy that accepted the reality of competition. Romnes intended AT&T to focus its future efforts toward competing in open markets for CPE and long-distance customers, as well as in offering specialized, nontraditional services over the local telephone lines. AT&T morale fell during this period, particularly after the New York Bell service crisis of 1969, the result of growing criticism over the highly publicized technical breakdowns and about AT&T's seemingly anachronistic position as a government-protected monopoly. Romnes was also chronically ill during these years. He further aggravated the corporate morale problem by failing to name anyone as AT&T's president, and held the dual post of chairman and president during the years 1970 to 1972. Romnes finally named John D. deButts as AT&T president (and according to AT&T tradition, Romnes's heir apparent) in early 1972. An operations executive who had a much more hostile attitude toward the idea of competition, deButts became Romnes's successor as AT&T chairman and CEO on April 1, 1972, when Romnes retired at the mandatory age of sixty-five. Romnes stayed on in the largely honorary position of chairman of the executive committee of the AT&T board of directors. Romnes's reputation declined during, and immediately after, his tenure as head of AT&T. Although virtually everyone praised Romnes for his technological expertise, deButts and other critics complained about his lack of operations experience and his refusal to take a stronger position in the face of a growing tide of competition. Romnes's acceptance of the inevitability of competition, however, now seems more realistic than the outlook of his critics. The more aggressive anticompetition policies of his successor aggravated public and congressional opinion, prevented any political compromise, and eventually resulted in the breakup of AT&T in the early 1980's.

Haakon Ingolf Romnes

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CEO chairman spokesman

Background

Haakon Ingolf Romnes was born in Stoughton, Wisconsin, United States, one of five children of Hans Romnes and Ingebord Fosdal, both of Norwegian descent.

Education

He graduated from public schools in Stoughton and then enrolled at the University of Wisconsin (graduated with a degree in electrical engineering in 1928).

Career

During the summer vacation preceding his senior year he worked as a telephone installer for the Wisconsin Bell Telephone Company, a subsidiary of the American Telephone and Telegraph Company (AT&T). After graduating with a degree in electrical engineering in 1928, he joined AT&T's Bell Telephone Laboratories in New York City as a circuit designer.

Romnes transferred to AT&T's engineering department in 1935, and held a series of technical positions during the following twenty years. Romnes had widely acknowledged technological expertise, and had a number of patents issued for his equipment designs. AT&T placed higher value on engineering and production expertise rather than marketing ability, since it was an era when competition was just starting. He also served briefly in 1950 as an operating officer at Illinois Bell Telephone Company in Chicago. As vice-president of AT&T during the period 1952-1959, he oversaw the design and early implementation of AT&T's direct distance dialing network for long-distance calls. From 1959 through 1963 Romnes was president of Western Electric, the manufacturing subsidiary of AT&T. While he was president of Western Electric, he initiated the Equal Employment Opportunity policy (in addition, Romnes was always a supporter of the National Urban League and the United Negro College Fund). He became AT&T president in 1965, and chairman and CEO when Frederick Kappel retired from those posts in February 1967. Romnes headed AT&T at a time when the public consensus over telecommunications regulation was dissolving. During the previous fifty years the American public had accepted AT&T's argument concerning the necessity for end-to-end telephone service run exclusively by AT&T. Government regulators not only prevented competition in local telephone services, which everyone considered a "natural monopoly, " they also enforced AT&T's policies of prohibiting customers from connecting non-AT&T telephone equipment in their homes and businesses or allowing the use of alternative long-distance transmission facilities. During the 1950's and 1960's new technology involving computers and microwaves prompted many firms to begin offering various telecommunications services outside of AT&T's Bell system. Telephone customers began seeking interconnection with non-AT&T long-distance facilities, as well as the use of customer premises telephone equipment (CPE) not manufactured by AT&T. In 1968 the Federal Communications Commission (FCC) ruled in the Carterphone case that non-AT&T CPE could be connected with AT&T lines. Subsequent rulings by the FCC and the courts allowed Microwave Communications, Inc. (MCI) and other alternative long-distance phone companies to compete with AT&T. AT&T had to develop new policies in response to this competition. It initially allowed the connection of "foreign" (non-AT&T) CPE only when mediated by a mandatory AT&T-provided protective coupling arrangement (PCA). But the FCC commissioned studies that concluded that PCAs were overpriced and unnecessary, and then adopted a policy of allowing the interconnection of any CPE that met minimum technical standards set by the FCC. Meanwhile, AT&T responded to long-distance competition by enacting a special TELPAK tariff, which offered lower prices for private lines to customers wooed by competing carriers, but the FCC eventually ruled that the TELPAK tariff was an illegal exercise of anticompetitive market power. While fighting these regulatory battles, AT&T initiated a number of technical advances. In addition to having responsibility for approving (or disapproving) all major changes, Romnes was AT&T spokesman who announced major innovations at press conferences. AT&T began replacing electromechanical switches with completely electronic facilities to allow a shift from analog to digital transmission. It transformed long-distance usage by introducing the popular "800" service, and developed the sophisticated UNIX computer operating system. AT&T was less successful when it introduced the Picturephone in 1968; Romnes incorrectly predicted that it would "be in very considerable use within less than ten years. " Meanwhile, telephone service in New York City and other major cities deteriorated as the result of unanticipated demand and inadequate maintenance. AT&T contended that this deterioration was due to regulators' slow response to requests for telephone rate increases, which failed to take sufficient account of the rapid inflation of that period. Romnes eventually worked out a new AT&T corporate policy that accepted the reality of competition. Romnes intended AT&T to focus its future efforts toward competing in open markets for CPE and long-distance customers, as well as in offering specialized, nontraditional services over the local telephone lines. AT&T morale fell during this period, particularly after the New York Bell service crisis of 1969, the result of growing criticism over the highly publicized technical breakdowns and about AT&T's seemingly anachronistic position as a government-protected monopoly. Romnes was also chronically ill during these years. He further aggravated the corporate morale problem by failing to name anyone as AT&T's president, and held the dual post of chairman and president during the years 1970 to 1972. Romnes finally named John D. deButts as AT&T president (and according to AT&T tradition, Romnes's heir apparent) in early 1972. An operations executive who had a much more hostile attitude toward the idea of competition, deButts became Romnes's successor as AT&T chairman and CEO on April 1, 1972, when Romnes retired at the mandatory age of sixty-five. Romnes stayed on in the largely honorary position of chairman of the executive committee of the AT&T board of directors. Romnes's reputation declined during, and immediately after, his tenure as head of AT&T. Although virtually everyone praised Romnes for his technological expertise, deButts and other critics complained about his lack of operations experience and his refusal to take a stronger position in the face of a growing tide of competition. Romnes's acceptance of the inevitability of competition, however, now seems more realistic than the outlook of his critics. The more aggressive anticompetition policies of his successor aggravated public and congressional opinion, prevented any political compromise, and eventually resulted in the breakup of AT&T in the early 1980's.

Connections

He married Aimee Champion on December 26, 1930; they had one child.

He died in Sarasota, Florida.

Wife:: Aimee

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Haakon Ingolf Romnes

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