The American Telephone & Telegraph Co. et al. v. United States et al., 1936, was a landmark case that revolved around the issue of whether AT&T and its subsidiary companies were violating antitrust laws by maintaining a monopoly in the telephone industry. The U.S government argued that AT&T's control over both local and long-distance phone services constituted an illegal restraint on trade, stifling competition and innovation within the sector. In response, AT&T contended it was not in violation as their operations fell under exemptions provided for public utilities under antitrust legislation. They also claimed to be providing better service at lower costs due to economies of scale achieved through their size. However, after careful consideration of arguments from both sides, the Supreme Court ruled against AT&T stating that no such exemption existed for them under current law and ordered divestiture measures to break up its monopoly power.

In the dissenting opinion for American Telephone & Telegraph Co. et al. v. United States et al., Justice McReynolds disagreed with the majority's decision to uphold the Federal Communications Commission's (FCC) authority over interstate telephone services, arguing that it violated AT&T’s constitutional rights and exceeded Congress' regulatory powers under the Commerce Clause. He contended that telephones were not inherently instruments of interstate commerce but rather tools used in a variety of ways, many of which had no connection to commerce between states or foreign nations. Therefore, he argued that they should not be subject to federal regulation simply because they could potentially be used for such purposes. Furthermore, he expressed concern about potential abuses of power by administrative agencies like FCC and warned against allowing them too much discretion without adequate checks and balances.