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Encyclopedia > Bell System divestiture

The break up of AT&T was initiated in 1974 by the U.S. Department of Justice anti-trust suit against the telephone monopoly. Under the terms of a settlement finalized on January 8, 1982, "Ma Bell" agreed to divest its local exchange service operating companies, in return for a chance to go into the computer business, AT&T Computer Systems. Effective January 1, 1984, AT&T's local operations were split into seven independent Regional Bell Operating Companies (RBOCs) known as the "Baby Bells". Afterwards, AT&T, reduced in value by approximately 70%, continued to operate all of its long-distance services, although in the ensuing years it lost portions of its market share to competitors such as MCI and Sprint.-1... 1974 (MCMLXXIV) was a common year starting on Tuesday. ... The United States Department of Justice (DOJ) is a Cabinet department in the United States government designed to enforce the law and defend the interests of the United States according to the law and to ensure fair and impartial administration of justice for all Americans. ... Media:Example. ... In economics, a monopoly (from the Latin word monopolium - Greek language monos, one + polein, to sell) is defined as a persistent market situation where there is only one provider of a product or service. ... January 8 is the 8th day of the year in the Gregorian calendar. ... 1982 (MCMLXXXII) was a common year starting on Friday of the Gregorian calendar. ... AT&T (formerly an abbreviation for American Telephone and Telegraph) Corporation (NYSE: T) is an American telecommunications company. ... AT&T Computer Systems is the generic name for AT&Ts abortive attempt to enter the computer business. ... January 1 is the first day of the calendar year in both the Julian and Gregorian calendars. ... 1984 (MCMLXXXIV) was a leap year starting on Sunday of the Gregorian calendar. ... AT&T Corporation (originally American Telephone & Telegraph Company) provided voice, video, data, and Internet telecommunications and professional services to businesses, consumers, and government agencies. ... The Regional Bell operating companies (RBOC) are the result of the United States antitrust action against AT&T in 1983. ... The Regional Bell operating companies (RBOC) are the result of the United States antitrust action against AT&T in 1983. ... MCI may refer to the following: MCI as in Multimedia System refers to : Media Control Interface or Multimedia Control Interface. ... To meet Wikipedias quality standards, this article or section may require cleanup. ...

Contents

Regional Bell Operating Companies (RBOCs)

Map of the original and current companies.
Map of the original and current companies.

Image File history File links Download high resolution version (1250x800, 239 KB) Summary Map showing Regional Bell Operating Companies original and current extents. ... Image File history File links Download high resolution version (1250x800, 239 KB) Summary Map showing Regional Bell Operating Companies original and current extents. ... Ameritech (American Information Technologies) is a U.S. telecommunications company that arose out of the 1984 AT&T divestiture. ... Categories: Corporation stubs | Communications companies of the United States | Defunct companies | Telephone companies | Public Utilities ... BellSouth Corporation (NYSE: BLS) is a U.S. telecommunications company based in Atlanta, Georgia. ... NYNEX Corporation (pronounced Nine-x) was a telephone company which served five New England states (Maine, Massachusetts, New Hampshire, Rhode Island and Vermont) as well as New York. ... The former parent company of Pacific Bell and Nevada Bell. ... AT&T Inc. ... For current information on this topic, see Qwest. ...

Non-RBOC Bell System members

The only difference between these two incumbent local exchange carriers (ILECs) and the seven divested Baby Bells (RBOCs) was that AT&T owned only a minority interest in these ILECs as opposed to owning them outright before the breakup. Both were monopolies in their coverage areas much like the RBOCs. ILEC or Incumbent Local Exchange Carrier is a local telephone company that was in existence at the time of the breakup of AT&T, for example, the Baby Bells and GTE. They compete with upstart Competitive Local Exchange Carriers. ...

  • Cincinnati Bell, the only remaining former Bell System member not owned by a Baby Bell, covering the Greater Cincinnati area; it is not included on the map to the right as it is not owned by a Baby Bell.
  • SNET, the other non-RBOC Bell System member, was acquired by SBC in 1998 and rebranded as AT&T in 2005; it covered Connecticut.

Cincinnati Bell is the dominant telephone company for Cincinnati, Ohio and its nearby suburbs in Ohio, Indiana and Kentucky. ... The Cincinnati/Northern Kentucky metropolitan area Cincinnati/Northern Kentucky metropolitan area is a metropolitan area that includes 15 counties in Ohio, Kentucky and Indiana. ... The Southern New England Telephone Company (commonly referred to as SNET by its customers) started operations on January 27, 1878 as the District Telephone Company of New Haven. ... This article or section does not cite its references or sources. ...

Effects

The breakup led to a surge of competition in the long distance telecommunications market by companies such as Sprint, MCI, AT&T, BellSouth, Verizon, and Qwest. Four of these are "Baby Bells" or former competitors that have merged with the Baby Bells. The local telecommunications market has remained essentially a monopoly, with the incidental and short lived appearance of competitive telephone companies (CLECs) after the Telecommunications Act of 1996. AT&T's gambit in exchange for its divestiture, AT&T Computer Systems, failed, and the company became a shadow of its former glory. Look up sprint in Wiktionary, the free dictionary. ... MCI may refer to the following: MCI as in Multimedia System refers to : Media Control Interface or Multimedia Control Interface. ... AT&T Inc. ... BellSouth Corporation (NYSE: BLS) is a U.S. telecommunications company based in Atlanta, Georgia. ... This article or section should include material from Bell Atlantic This article or section should include material from GTE Verizon Communications (NYSE: VZ) is a local exchange telephone company formed by the merger of Bell Atlantic, a former Bell Operating Company, and GTE, which was the largest independant local exchange... Qwest Communications International Inc. ... The Regional Bell operating companies (RBOC) are the result of the United States antitrust action against AT&T in 1983. ... AT&T Computer Systems is the generic name for AT&Ts abortive attempt to enter the computer business. ...


One negative outcome of the breakup is that local residential service rates, which were formerly subsidized by long distance revenues, have been forced to rise faster than the rate of inflation. Long-distance rates, meanwhile, have fallen due to the 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 Ma Bell 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 1982 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 service providers arguing that they did not have to pay access charges - resulting in significant savings for VoIP calls. The FCC has recently been split on this issue; VoIP services that utilize IP but in every other way look like a normal phone call generally have to pay access charges - VoIP services that look more like applications on the Internet and do not interconnect with the public telephone network do not have to pay access charges.


End of an era

In 2005, SBC Communications purchased AT&T, thus reuniting the venerable phone company with three of its spinoffs (SBC was comprised of Southwestern Bell, Pacific Telesis, and Ameritech). The merger was completed on November 18, 2005. The merged company is named AT&T Inc. Additionally, on March 5, 2006, AT&T announced that it will merge with BellSouth pending government regulatory approval. The surviving company will be named AT&T, and will be headquartered in San Antonio with Atlanta retaining the headquarters for Cingular Wireless, which will return to the AT&T Wireless name, as well as Southeast region telephone operations. If the merger is approved, it is assumed AT&T will not switch back to the Bell logo, thus ending usage of the Bell logo for corporate use by any of the Baby Bells. AT&T, from its days as SBC, already controlled 60 percent of Cingular Wireless, which had itself recently bought AT&T Wireless from the "old" AT&T. The other 40 percent is controlled by BellSouth, meaning the merger would unite the company under one corporate parent. 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ... November 18 is the 322nd day of the year (323rd in leap years) in the Gregorian Calendar. ... 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ... AT&T Inc. ... March 5 is the 64th day of the year in the Gregorian Calendar (65th in leap years). ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... Nickname: Alamo City; River City Location in the state of Texas Coordinates: Counties Bexar County Mayor Phil Hardberger Area    - City 1067. ... This article is about the state capital of Georgia. ... Cingular Wireless, LLC, headquartered in Atlanta, Georgia, United States, is the largest mobile phone company in the United States, with more than 58. ... AT&T Wireless Services, Inc. ... The Regional Bell operating companies (RBOC) are the result of the United States antitrust action against AT&T in 1983. ... AT&T Wireless Services, Inc. ... BellSouth Corporation (NYSE: BLS) is a U.S. telecommunications company based in Atlanta, Georgia. ...


Evolution of the RBOCs

Image File history File links Download high resolution version (1015x200, 15 KB) Summary Chart self made using with Fair Use logos. ...


Financial arbitrage

Because of 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, who made $2.5 million in what was at the time the NYSE's largest (nominal) block trade: description of arbitrage Edward Oakley Thorp is famous for his book Beat the Dealer in which he was the first to prove a mathematical system for beating blackjack by card counting. ...


References

Kerr, Jennifer. "Justice Dept. OKs Two Huge Telecom Mergers", Associated Press, October 27, 2005.


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