The telephone industry in the United States today faces the task of meeting the needs for growth and technological improvement which our growing economy places before it. There is a constant need for growth capital, and a constant need for cooperation between company management and regulatory groups to see that the needs of the American public are adequately serves. This thesis is about the economic environment within which the industry operates, and about the legal framework within which the regulatory groups must work. It is critical of the environment, and critical of the legal framework. There is no criticism of the actions of industry management, or of the actions of regulators.