What was the effect of the breakup of AT&T on the average American consumer?

by [deleted]

I became interested in the topic after reading this (obviously slanted) article. One specific quote stands out to me:

Vail wrote in that year's AT&T Annual Report that government regulation, "provided it is independent, intelligent, considerate, thorough and just," was an appropriate and acceptable substitute for the competitive marketplace.

  • What was the telecom landscape like back before AT&T was broken up, especially as a consumer?
  • What happened in the years directly following AT&T's breakup? The article makes it seems like it was better for consumers back then, but if that were true, however, the question then is why did the government break it up?

I tried to look it up, but I couldn't find a definitive answer. Also, the history of telecom companies in America seems very complex to me. What I am really looking for is some sort of data, or even meaningful anecdotal evidence, that could support one side or the other.

As a side question, it seems like after the breakup of AT&T, the amount of innovation coming from Bell Labs decreased, since Bell Labs no longer had access to AT&T's large pool of funding. Is this true, and if so, does the negative effect outweigh marketplace benefits that resulted from breaking up the monopoly?

bg-j38

Regarding Bell Labs, they stayed part of AT&T post-divestiture until 1996 when they were spun out into Lucent along with what had been Western Electric. There was a ton of stuff coming out of the labs during that time. The No. 5 ESS was introduced during the early 1980s and is still the switching platform for a huge amount of local lines. Many developments have been made on that over the years. Also a lot of work was done on the No. 4 ESS which is still the workhorse of the toll phone network that AT&T runs. The last major central processor retrofit (the No. 1B Processor) was introduced in 1992 for instance. The Labs were also responsible for big advances in wireless LANs, C++ came out of there in the mid-1980s, a number of other programming languages, a lot of work on optics, and even work on DNA computing.