Bell break-up plus five: mixed reviews

The consequences of the divestiture of AT&T in 1984 are examined. The new AT&T, freed to enter the computer industry, has not come close to rivaling IBM in commercial markets, although it is starting to do well in government contracts. The local operating companies, still run as regulated monopolies, have been far more profitable than free-market competitors. Research has expanded but is more focused on the bottom line, and unexpectedly, four of the seven regional holding companies (RHCs) have established their own independent research and technology centers. Open competition in the industry is greater now; hundreds of companies now provide long-distance services, customer-premises equipment, and information services. Local telephone rates have risen substantially now that they are no longer subsidized by long-distance service, at the same time, long-distance rates have dropped by about the same percentage.<>