The breakup of the Bell System was mandated on January 8, 1982, by an agreed
consent decree providing that
AT&T Corporation
AT&T Corporation, originally the American Telephone and Telegraph Company, is the subsidiary of AT&T Inc. that provides voice, video, data, and Internet telecommunications and professional services to businesses, consumers, and government agen ...
would, as had been initially proposed by AT&T, relinquish control of the
Bell Operating Companies
The Bell System was a system of telecommunication companies, led by the Bell Telephone Company and later by the American Telephone and Telegraph Company (AT&T), that dominated the telephone services industry in North America for over one hundr ...
, which had provided local telephone service in the United States. This effectively took the
monopoly
A monopoly (from Greek language, Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situati ...
that was the
Bell System
The Bell System was a system of telecommunication companies, led by the Bell Telephone Company and later by the American Telephone and Telegraph Company (AT&T), that dominated the telephone services industry in North America for over one hundr ...
and split it into entirely separate companies that would continue to provide telephone service. AT&T would continue to be a provider of
long-distance service, while the now-independent
Regional Bell Operating Companies
The Regional Bell Operating Companies (RBOC) are the result of '' United States v. AT&T'', the U.S. Department of Justice antitrust suit against the former American Telephone & Telegraph Company (later known as AT&T Corp.). On January 8, 1 ...
(RBOCs), nicknamed the "Baby Bells", would provide local service, and would no longer be directly supplied with equipment from AT&T subsidiary
Western Electric
The Western Electric Company was an American electrical engineering and manufacturing company officially founded in 1869. A wholly owned subsidiary of American Telephone & Telegraph for most of its lifespan, it served as the primary equipment ma ...
.
This divestiture was initiated by the filing in 1974 by the
United States Department of Justice
The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United State ...
of an
antitrust
Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...
lawsuit against AT&T.
AT&T was, at the time, the sole provider of telephone service throughout most of the United States. Furthermore, most telephonic equipment in the United States was produced by its subsidiary
Western Electric
The Western Electric Company was an American electrical engineering and manufacturing company officially founded in 1869. A wholly owned subsidiary of American Telephone & Telegraph for most of its lifespan, it served as the primary equipment ma ...
. This
vertical integration
In microeconomics, management and international political economy, vertical integration is a term that describes the arrangement in which the supply chain of a company is integrated and owned by that company. Usually each member of the suppl ...
led AT&T to have almost total control over communication technology in the country, which led to the antitrust case ''
United States v. AT&T''. The plaintiff in the court complaint asked the court to order AT&T to divest ownership of Western Electric.
Feeling that it was about to lose the suit, AT&T proposed an alternative: its breakup. It proposed that it retain control of Western Electric,
Yellow Pages
The yellow pages are telephone directories of businesses, organized by category rather than alphabetically by business name, in which advertising is sold. The directories were originally printed on yellow paper, as opposed to white pages for ...
, the Bell trademark,
Bell Labs
Nokia Bell Labs, originally named Bell Telephone Laboratories (1925–1984),
then AT&T Bell Laboratories (1984–1996)
and Bell Labs Innovations (1996–2007),
is an American industrial research and scientific development company owned by mult ...
, and AT&T Long Distance. It also proposed that it be freed from a 1956 antitrust consent decree, then administered by Judge
Vincent P. Biunno
Vincent Pasquale Biunno (February 2, 1916 – July 30, 1991) was a United States federal judge, United States district judge of the United States District Court for the District of New Jersey.
Education and career
Born in Newark, New Jersey, Ne ...
in the
United States District Court for the District of New Jersey
The United States District Court for the District of New Jersey (in case citations, D.N.J.) is a federal court in the Third Circuit (except for patent claims and claims against the U.S. government under the Tucker Act, which are appealed to the ...
, that barred it from participating in the general sale of computers (retreat from international markets, relinquish ownership in
Bell Canada
Bell Canada (commonly referred to as Bell) is a Canadian telecommunications company headquartered at 1 Carrefour Alexander-Graham-Bell in the borough of Verdun in Montreal, Quebec, Canada. It is an ILEC (incumbent local exchange carrier) in t ...
, and Northern Electric a Western Electric subsidiary). In return, it proposed to give up ownership of the local operating companies. This last concession, it argued, would achieve the government's goal of creating competition in supplying telephone equipment and supplies to the operative companies. The settlement was finalized on January 8, 1982, with some changes ordered by the decree court: the regional holding companies got the Bell trademark, Yellow Pages, and about half of Bell Labs.
Effective January 1, 1984, the Bell System's many
member companies were variously merged into seven independent "Regional Holding Companies", also known as
Regional Bell Operating Companies
The Regional Bell Operating Companies (RBOC) are the result of '' United States v. AT&T'', the U.S. Department of Justice antitrust suit against the former American Telephone & Telegraph Company (later known as AT&T Corp.). On January 8, 1 ...
(RBOCs), or "Baby Bells". This divestiture reduced the
book value
In accounting, book value is the value of an asset according to its balance sheet account balance. For assets, the value is based on the original cost of the asset less any depreciation, amortization or impairment costs made against the asset. T ...
of AT&T by approximately 70%.
Post-breakup structure
The breakup of the Bell System resulted in the creation of seven independent companies that were formed from the original twenty-two AT&T-controlled members of the System.
[
]
On January 1, 1984, these companies were NYNEX, Pacific Telesis, Ameritech, Bell Atlantic, Southwestern Bell Corporation, BellSouth, and US West.
*
NYNEX
NYNEX Corporation was an American telephone company that served five states of New England (Maine, Massachusetts, New Hampshire, Rhode Island and Vermont) as well as most of the state of New York from January 1, 1984 to August 14, 1997.
Histor ...
, acquired by
Bell Atlantic
Verizon Communications Inc., commonly known as Verizon, is an American multinational telecommunications conglomerate and a corporate component of the Dow Jones Industrial Average. The company is headquartered at 1095 Avenue of the Americas in ...
in 1996, now part of
Verizon Communications
Verizon Communications Inc., commonly known as Verizon, is an American multinational telecommunications conglomerate and a corporate component of the Dow Jones Industrial Average. The company is headquartered at 1095 Avenue of the Americas i ...
*
Pacific Telesis
Pacific Telesis Group was one of the seven Regional Bell Operating Companies, sometimes also referred to as "RBOCs" or "Baby Bells", created in 1983 in preparation of the breakup of AT&T as a holding company for Pacific Bell and Nevada Bell, Pa ...
, acquired by
SBC in 1997, now part of
AT&T Inc.
*
Ameritech
AT&T Teleholdings, Inc., formerly known as Ameritech Corporation (and before that American Information Technologies Corporation), is an American telecommunications company that arose out of the 1984 AT&T divestiture. Ameritech was one of the se ...
, acquired by
SBC in 1999, now part of
AT&T Inc.
*
Bell Atlantic
Verizon Communications Inc., commonly known as Verizon, is an American multinational telecommunications conglomerate and a corporate component of the Dow Jones Industrial Average. The company is headquartered at 1095 Avenue of the Americas in ...
, merged with
GTE
GTE Corporation, formerly General Telephone & Electronics Corporation (1955–1982), was the largest independent telephone company in the United States during the days of the Bell System. The company operated from 1926, with roots tracing furth ...
in 2000 to form
Verizon Communications
Verizon Communications Inc., commonly known as Verizon, is an American multinational telecommunications conglomerate and a corporate component of the Dow Jones Industrial Average. The company is headquartered at 1095 Avenue of the Americas i ...
*
Southwestern Bell Corporation
AT&T Inc. is an American multinational telecommunications holding company headquartered at Whitacre Tower in Downtown Dallas, Texas. It is the world's largest telecommunications company by revenue and the third largest provider of mobile te ...
, rebranded as
SBC Communications
The history of AT&T dates back to the invention of the telephone. The Bell Telephone Company was established in 1877 by Alexander Graham Bell, who obtained the first US patent for the telephone, and his father-in-law, Gardiner Greene Hubbard. Bell ...
in 1995, acquired
AT&T Corporation
AT&T Corporation, originally the American Telephone and Telegraph Company, is the subsidiary of AT&T Inc. that provides voice, video, data, and Internet telecommunications and professional services to businesses, consumers, and government agen ...
in 2005
*
BellSouth
BellSouth, LLC (stylized as ''BELLSOUTH'' and formerly known as BellSouth Corporation) was an American telecommunications holding company based in Atlanta, Georgia. BellSouth was one of the seven original Regional Bell Operating Companies after ...
, acquired by
AT&T Inc. in 2006
*
US West
US West, Inc. (stylized as US WEST) was one of seven Regional Bell Operating Companies (RBOCs, also referred to as "Baby Bells"), created in 1983 under the Modification of Final Judgement (''United States v. Western Electric Co., Inc.'' 552 ...
, acquired by
Qwest
Qwest Communications International, Inc. was a United States telecommunications carrier. Qwest provided local service in 14 western and midwestern U.S. states: Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dako ...
in 2000, which in turn was acquired by
CenturyLink
Lumen Technologies, Inc. (formerly CenturyLink) is an American
telecommunications company headquartered in Monroe, Louisiana, that offers communications, network services, security, cloud solutions, voice, and managed services. The company is ...
in 2011
In addition, there were two members of the Bell System that were only partially owned by AT&T. Both of these companies were monopolies in their coverage areas, received Western Electric equipment and had agreements with AT&T whereby they were provided with long-distance service. They continued to exist in their pre-breakup form after the antitrust case, but no longer directly received Western Electric equipment, and were no longer bound to use AT&T as their long-distance provider.
These companies were:
*
Cincinnati Bell
Cincinnati Bell, doing business as Altafiber (typeset as altafiber), is a regional telecommunications service provider based in Cincinnati, Ohio, United States. It provides landline telephone, fiber-optic Internet, and IPTV services through its ...
, acquired by
Macquarie Infrastructure and Real Assets
Macquarie Group Limited () is an Australian global financial services group. Headquartered and listed in Australia (), Macquarie employs more than 17,000 staff in 33 markets, is the world's largest infrastructure asset manager and Australia's t ...
in 2021, covering the
Cincinnati metropolitan area
*
Southern New England Telephone
The Southern New England Telephone Company (commonly referred to as SNETCo by its customers), doing business as Frontier Communications of Connecticut, is a local exchange carrier owned by Frontier Communications.
History
It started operations o ...
(SNET), acquired by
SBC in 1998, now part of
Frontier Communications
Frontier Communications Parent, Inc. (known as Citizens Utilities Company until May 2000 and Citizens Communications Company until July 31, 2008) is an American telecommunications company. The company previously served primarily rural areas and s ...
, covering
Connecticut
Connecticut () is the southernmost state in the New England region of the Northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, New York to the west, and Long Island Sound to the south. Its cap ...
.
Effects
The breakup led to a surge of competition in the long-distance telecommunications market by companies such as
Sprint and
MCI.
AT&T's gambit in exchange for its divestiture,
AT&T Computer Systems
AT&T Computer Systems is the generic name for American Telephone & Telegraph's unsuccessful attempt to compete in the computer business. In return for divesting the local Bell Operating Companies (Baby Bells), AT&T was allowed to have an unregulat ...
, failed, and after spinning off its manufacturing operations (most notably Western Electric, which became Lucent, then
Alcatel-Lucent
Alcatel–Lucent S.A. () was a French–American global telecommunications equipment company, headquartered in Boulogne-Billancourt, France. It was formed in 2006 by the merger of France-based Alcatel and U.S.-based Lucent, the latter being a su ...
, now
Nokia
Nokia Corporation (natively Nokia Oyj, referred to as Nokia) is a Finnish multinational corporation, multinational telecommunications industry, telecommunications, technology company, information technology, and consumer electronics corporatio ...
) and other misguided acquisitions such as
NCR and
AT&T Broadband, it was left with only its core business with roots as
AT&T Long Lines
AT&T Communications, Inc., was a division of the AT&T Corporation that, through 23 subsidiaries, provided interexchange carrier and long-distance telephone services.
History
AT&T Long Lines
The American Telephone & Telegraph Long Lines ...
and its successor
AT&T Communications
AT&T Communications is a division of AT&T that focuses on mobile phone, broadband, fixed line telephone, home security, network security, and business services. The division houses AT&T Mobility, AT&T Internet, AT&T Phone, AT&T Labs, AT&T Di ...
. It was at this point that AT&T was purchased by one of its own spin-offs,
SBC Communications
The history of AT&T dates back to the invention of the telephone. The Bell Telephone Company was established in 1877 by Alexander Graham Bell, who obtained the first US patent for the telephone, and his father-in-law, Gardiner Greene Hubbard. Bell ...
, the company that had also purchased two other RBOCs and a former AT&T associated operating company (Ameritech, Pacific Telesis, and SNET), and which later purchased another RBOC (BellSouth).
One consequence of the breakup was that local residential service rates, which were formerly subsidized by long-distance revenues, began to rise faster than the rate of inflation. Long-distance rates, meanwhile, fell both due to the end of this subsidy and increased competition.
The FCC established a system of access charges where long-distance networks paid the more expensive local networks both to originate and terminate a call. In this way, the implicit subsidies of the Bell System became explicit post-divestiture. These access charges became a source of strong controversy as one company after another sought to arbitrage the network and avoid these fees. In 2002 the FCC declared that Internet service providers would be treated ''as if'' they were local and would not have to pay these access charges. This led to
VoIP
Voice over Internet Protocol (VoIP), also called IP telephony, is a method and group of technologies for the delivery of voice communications and multimedia sessions over Internet Protocol (IP) networks, such as the Internet. The terms Internet t ...
service providers arguing that they did not have to pay access charges, resulting in significant savings for VoIP calls. The FCC was split on this issue for some time; VoIP services that used IP but in every other way looked like a normal phone call generally had to pay access charges, while VoIP services that looked more like applications on the Internet and did not interconnect with the public telephone network did not have to pay access charges. However, an FCC order issued in December 2011 declared that all VoIP services would have to pay the charges for nine years, at which point all access charges would then be phased out.
Another consequence of the divestiture was in how both national broadcast television (i.e.,
ABC
ABC are the first three letters of the Latin script known as the alphabet.
ABC or abc may also refer to:
Arts, entertainment, and media Broadcasting
* American Broadcasting Company, a commercial U.S. TV broadcaster
** Disney–ABC Television ...
,
NBC
The National Broadcasting Company (NBC) is an American English-language commercial broadcast television and radio network. The flagship property of the NBC Entertainment division of NBCUniversal, a division of Comcast, its headquarters are l ...
,
CBS
CBS Broadcasting Inc., commonly shortened to CBS, the abbreviation of its former legal name Columbia Broadcasting System, is an American commercial broadcast television and radio network serving as the flagship property of the CBS Entertainm ...
,
PBS
The Public Broadcasting Service (PBS) is an American public broadcasting, public broadcaster and Non-commercial activity, non-commercial, Terrestrial television, free-to-air television network based in Arlington, Virginia. PBS is a publicly fu ...
) and radio networks (
NPR
National Public Radio (NPR, stylized in all lowercase) is an American privately and state funded nonprofit media organization headquartered in Washington, D.C., with its NPR West headquarters in Culver City, California. It differs from other ...
,
Mutual,
ABC Radio) distributed their programming to their local affiliated stations. Prior to the breakup, the broadcast networks relied on AT&T Long Lines' infrastructure of terrestrial
microwave relay
Microwave transmission is the transmission of information by electromagnetic waves with wavelengths in the microwave frequency range of 300MHz to 300GHz(1 m - 1 mm wavelength) of the electromagnetic spectrum. Microwave signals are normally limi ...
,
coaxial cable
Coaxial cable, or coax (pronounced ) is a type of electrical cable consisting of an inner conductor surrounded by a concentric conducting shield, with the two separated by a dielectric ( insulating material); many coaxial cables also have a p ...
, and, for radio, broadcast-quality
leased line
A leased line is a private telecommunications circuit between two or more locations provided according to a commercial contract. It is sometimes also known as a private circuit, and as a data line in the UK. Typically, leased lines are used by ...
networks to deliver their programming to local stations. However, by the mid-1970s, the then-new technology of satellite distribution offered by other companies like
RCA Astro Electronics
Lockheed Martin Space is one of the four major business divisions of Lockheed Martin. It has its headquarters in Littleton, Colorado, with additional sites in Valley Forge, Pennsylvania; Sunnyvale, California; Santa Cruz, California; Huntsville ...
and
Western Union
The Western Union Company is an American multinational financial services company, headquartered in Denver, Colorado.
Founded in 1851 as the New York and Mississippi Valley Printing Telegraph Company in Rochester, New York, the company chang ...
, with their respective
Satcom 1
Satcom, a portmanteau of satellite communications, was a brand of artificial geo-stationary communications satellites originally developed and operated by RCA American Communications ( RCA Americom) that facilitated wide-area telecommunica ...
and
Westar 1
Westar 1 was America's first domestic and commercially launched geostationary communications satellite, launched by Western Union (WU) and NASA on April 13, 1974. It was built by Hughes for Western Union, using the HS-333 platform of spin-s ...
satellites, started to give the Bell System competition in the broadcast distribution field, with the satellites providing higher video and audio quality, as well as much lower transmission costs.
However, the networks stayed with AT&T (along with simulcasting their feeds via satellite through the late 1970s to the early 1980s) due to some stations not being equipped yet with
ground station
A ground station, Earth station, or Earth terminal is a terrestrial radio station designed for extraplanetary telecommunication with spacecraft (constituting part of the ground segment of the spacecraft system), or reception of radio waves fro ...
receiving equipment to receive the networks' satellite feeds, and due to the broadcast networks' contractual obligations with AT&T up until the breakup in 1984, when the networks immediately switched to satellite exclusively. This was due to several reasons — the much cheaper rates for transmission offered by satellite operators that were not influenced by the high
tariffs
A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and polic ...
set by AT&T for broadcast customers, the split of the Bell System into separate RBOCs, and the end of contracts that the broadcast companies had with AT&T.
AT&T was allowed to enter the computer market after the breakup; observers expected that with Bell Labs and Western Electric,
American Bell would challenge market leader
IBM.
The company's post-breakup strategy did not work out the way it had planned. Its attempt to enter the computer business failed, and it quickly realized that Western Electric was not profitable without the guaranteed customers the Bell System had provided.
In 1995, AT&T spun off its computer division and Western Electric, exactly as the government had initially asked it to do. It then re-entered the local telephone business that it had exited after the breakup, which had become much more lucrative with the rise of
dial-up Internet access
Dial-up Internet access is a form of Internet access that uses the facilities of the public switched telephone network (PSTN) to establish a connection to an Internet service provider (ISP) by dialing a telephone number on a conventional telepho ...
in the early 1990s.
Even this, however, would not save AT&T Corporation. It would soon be absorbed by one of the Baby Bells,
SBC Communications
The history of AT&T dates back to the invention of the telephone. The Bell Telephone Company was established in 1877 by Alexander Graham Bell, who obtained the first US patent for the telephone, and his father-in-law, Gardiner Greene Hubbard. Bell ...
(formerly Southwestern Bell), which then co-opted the AT&T name to form the present-day
AT&T Inc.
Evolution of the Baby Bells
Following divestiture in 1984 and the creation of the seven Baby Bells, the service within the
LATAs remained regulated until 1996, when the
Telecommunications Act of 1996
The Telecommunications Act of 1996 is a United States federal law enacted by the 104th United States Congress on January 3, 1996, and signed into law on February 8, 1996, by President Bill Clinton. It primarily amended Chapter 5 of Title 47 of t ...
was passed. Following this, the Baby Bells began consolidating among themselves. Section 271 of the Telecommunications Act of 1996 also established a way that regulators could approve BOCs to enter the interLATA market in regions where they provide local exchange service.
In 1998, Ameritech sold some of its
Wisconsin Bell
Wisconsin Bell, Inc. (known as Wisconsin Telephone Co. before 1984) is the name of the Bell Operating Company serving Wisconsin. It is owned by AT&T through AT&T Teleholdings, originally known as Ameritech.
Their headquarters is at 722 North Br ...
lines (covering 19 exchanges) to
CenturyTel
Lumen Technologies, Inc. (formerly CenturyLink) is an American
telecommunications company headquartered in Monroe, Louisiana, that offers communications, network services, security, cloud solutions, voice, and managed services. The company is ...
, which merged them into its company
CenturyTel of the Midwest-Kendall
Lumen Technologies, Inc. (formerly CenturyLink) is an American
telecommunications company headquartered in Monroe, Louisiana, that offers communications, network services, security, cloud solutions, voice, and managed services. The company is a ...
.
SBC Communications (named
Southwestern Bell Corporation
AT&T Inc. is an American multinational telecommunications holding company headquartered at Whitacre Tower in Downtown Dallas, Texas. It is the world's largest telecommunications company by revenue and the third largest provider of mobile te ...
until 1995) purchased
Pacific Telesis
Pacific Telesis Group was one of the seven Regional Bell Operating Companies, sometimes also referred to as "RBOCs" or "Baby Bells", created in 1983 in preparation of the breakup of AT&T as a holding company for Pacific Bell and Nevada Bell, Pa ...
in 1997 for $16.5 billion, creating an organization with about 100,000 employees, an annual net income of $3 billion, and revenue of about $23.5 billion. SBC purchased
Southern New England Telecommunications
Southern New England Telecommunications Corporation (SNET) started operations in 1986 as the holding company for The Southern New England Telephone Company. Prior to 1986, The Southern New England Telephone Company had been a minority holding of ...
in 1998 for $5.01 billion, and
Ameritech
AT&T Teleholdings, Inc., formerly known as Ameritech Corporation (and before that American Information Technologies Corporation), is an American telecommunications company that arose out of the 1984 AT&T divestiture. Ameritech was one of the se ...
in 1999 for $61 billion, creating the largest U.S. local phone company at the time.
AT&T Corporation
AT&T Corporation, originally the American Telephone and Telegraph Company, is the subsidiary of AT&T Inc. that provides voice, video, data, and Internet telecommunications and professional services to businesses, consumers, and government agen ...
, the original parent, was acquired effective November 18, 2005, by SBC, which renamed itself AT&T Inc. and began using the ticker symbol "T" and a new AT&T corporate logo. The new company then acquired
BellSouth
BellSouth, LLC (stylized as ''BELLSOUTH'' and formerly known as BellSouth Corporation) was an American telecommunications holding company based in Atlanta, Georgia. BellSouth was one of the seven original Regional Bell Operating Companies after ...
for $85.8 billion on January 3, 2007, with FCC approval.
Bell Atlantic merged with
NYNEX
NYNEX Corporation was an American telephone company that served five states of New England (Maine, Massachusetts, New Hampshire, Rhode Island and Vermont) as well as most of the state of New York from January 1, 1984 to August 14, 1997.
Histor ...
on August 18, 1997, in a $25.6 billion deal, retaining the name Bell Atlantic, and then with non-Bell
GTE
GTE Corporation, formerly General Telephone & Electronics Corporation (1955–1982), was the largest independent telephone company in the United States during the days of the Bell System. The company operated from 1926, with roots tracing furth ...
on June 30, 2000, to create
Verizon Communications
Verizon Communications Inc., commonly known as Verizon, is an American multinational telecommunications conglomerate and a corporate component of the Dow Jones Industrial Average. The company is headquartered at 1095 Avenue of the Americas i ...
in a $70 billion deal. Verizon sold all of its wireline operations in northern
New England
New England is a region comprising six states in the Northeastern United States: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. It is bordered by the state of New York to the west and by the Canadian provinces ...
(
Maine
Maine () is a state in the New England and Northeastern regions of the United States. It borders New Hampshire to the west, the Gulf of Maine to the southeast, and the Canadian provinces of New Brunswick and Quebec to the northeast and north ...
,
New Hampshire
New Hampshire is a U.S. state, state in the New England region of the northeastern United States. It is bordered by Massachusetts to the south, Vermont to the west, Maine and the Gulf of Maine to the east, and the Canadian province of Quebec t ...
, and
Vermont
Vermont () is a state in the northeast New England region of the United States. Vermont is bordered by the states of Massachusetts to the south, New Hampshire to the east, and New York to the west, and the Canadian province of Quebec to ...
) in 2008 to
FairPoint Communications
FairPoint Communications, Inc. was headquartered in Charlotte, North Carolina, and operated communication services in 31 markets in 17 states, mostly in rural areas.
FairPoint services include local and long distance phone service, data, Interne ...
for $2.7 billion; a new operating company,
Northern New England Telephone Operations, was created. Operations in Vermont were later split into
Telephone Operating Company of Vermont
Consolidated Communications of Vermont Company, LLC is a telephone operating company owned by Consolidated Communications of Northern New England, a subsidiary of Consolidated Communications.
The company was created following Verizon's 2008 sale o ...
, but continued with FairPoint. In 2010, Verizon sold 4.8 million access lines in 14 states, including Verizon West Virginia (originally The Chesapeake and Potomac Telephone Company of West Virginia), to
Frontier Communications
Frontier Communications Parent, Inc. (known as Citizens Utilities Company until May 2000 and Citizens Communications Company until July 31, 2008) is an American telecommunications company. The company previously served primarily rural areas and s ...
.
US West was acquired by
Qwest
Qwest Communications International, Inc. was a United States telecommunications carrier. Qwest provided local service in 14 western and midwestern U.S. states: Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dako ...
in June 2000 for $43.5 billion. On April 6, 2011, Qwest was acquired by CenturyLink (now
Lumen Technologies
Lumen Technologies, Inc. (formerly CenturyLink) is an American
telecommunications company headquartered in Monroe, Louisiana, that offers communications, network services, security, cloud solutions, voice, and managed services. The company is a ...
), an independent telephone provider, bringing
Qwest Corporation
Qwest Corporation is a former Regional Bell Operating Company owned by Lumen Technologies. It was formerly named U S WEST Communications, Inc. from 1991 to 2000, and also formerly named Mountain States Telephone and Telegraph Company from 1911 t ...
(originally Mountain Bell), Northwestern Bell, and Pacific Northwest Bell under its control.
While based in San Antonio, Texas, since 1992, AT&T Inc. moved its headquarters to
Dallas
Dallas () is the List of municipalities in Texas, third largest city in Texas and the largest city in the Dallas–Fort Worth metroplex, the List of metropolitan statistical areas, fourth-largest metropolitan area in the United States at 7.5 ...
by the end of 2008. The name change came after AT&T's merger with BellSouth, as well as with southeast-region telephone operations.
Bedminster, New Jersey, is home to the AT&T Global Network Operations Center and is the headquarters of AT&T Corp., the long-distance subsidiary of AT&T Inc. The new AT&T Inc. lacks the
vertical integration
In microeconomics, management and international political economy, vertical integration is a term that describes the arrangement in which the supply chain of a company is integrated and owned by that company. Usually each member of the suppl ...
that characterized the historic AT&T Corporation and led to the Department of Justice antitrust suit. AT&T Inc. announced it would not switch back to the Bell logo, thus ending corporate use of the Bell logo by the Baby Bells, with the lone exception of Verizon.
Financial arbitrage
Due to discrepancies between the pricing of the "old" AT&T shares and the new "when-issued" shares, investors were able to make risk-free profits, most spectacularly
Edward O. Thorp
Edward Oakley Thorp (born August 14, 1932) is an American mathematics professor, author, hedge fund manager, and blackjack researcher. He pioneered the modern applications of probability theory, including the harnessing of very small correlatio ...
, who made $2.5 million in what was at the time the
NYSE
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It is by far the List of stock exchanges, world's largest s ...
's largest (nominal) block trade.
See also
*
Standard Oil
Standard Oil Company, Inc., was an American oil production, transportation, refining, and marketing company that operated from 1870 to 1911. At its height, Standard Oil was the largest petroleum company in the world, and its success made its co-f ...
– The 1911 breakup of Standard Oil is often compared to the breakup of AT&T and, like AT&T, later had many "baby Standards" merge.
*
AT&T Technologies AT&T Technologies, Inc., was created by AT&T in 1983 in preparation for the breakup of the Bell System, which became effective as of January 1, 1984. It assumed the corporate charter of Western Electric Co., Inc.
History
Creation
AT&T (orig ...
*
Vincent Pasquale Biunno
Vincent Pasquale Biunno (February 2, 1916 – July 30, 1991) was a United States federal judge, United States district judge of the United States District Court for the District of New Jersey.
Education and career
Born in Newark, New Jersey, Ne ...
*
Harold H. Greene
Harold Herman Greene (born Heinz Grünhaus, February 6, 1923 – January 29, 2000) was a United States district judge of the United States District Court for the District of Columbia.
Education and career
Greene was born Heinz Grünhaus in Fran ...
*
Viewtron
Viewtron was an online service offered by Knight-Ridder and AT&T from 1983 to 1986. Patterned after the British Post Office's Prestel system, it started as a videotex service requiring users to have a special terminal, the AT&T Sceptre. As home ...
References
Further reading
*
Steve Coll
Steve Coll (born October 8, 1958) is an Americans, American journalist, academic and executive.
He is currently the dean of the Columbia University Graduate School of Journalism, where he is also the Henry R. Luce Professor of Journalism. A staf ...
(1986), ''The Deal of the Century: The Breakup of AT&T'', New York: Atheneum.
External links
Obituary of Harold H. Greene judge presiding over the divestiture
Has Divestiture Worked? A 25th Anniversary Assessment of the Breakup of AT&TConference at NYU, May 6, 2009.
{{AT&T Spinoffs
January 1982 events in the United States
AT&T
Bell System
History of telecommunications in the United States