The Changing Boundaries of AT&T, 1995-2002

The Changing Boundaries of AT&T during the years 1995-2002.The term paper is written by Kevin Davidson. TheChangingBoundariesofAT&T, 1995-2002

The American Telephones and Telegraph Corporation was formed in 1885 to provide the first long distance phone service across the United States. Alexander Graham Bell had a patent on the telephones until 1894 and created a company called American Bell Telephone. AT&T purchased American Bell and grew by acquiring stock in other telephone providers. After his patent expired, American Bell avoided competition by price fixing, and mergers. Eventually this strategy led to AT&T becoming the nation’s leading telephone provider and enjoyed a government-sanctioned monopoly in the long distance market. ln addition, AT&T also controlled 22 local telephone service providers. Although there was competition with other providers such as Sprint, the raw size of AT&T made it a monopoly. In l974,there was antitrust suit by the Justice Department for AT&T to breakup its local market. The FTC interjected in 1975 to allow long distance competition ending the monopoly in long distance. In 1982 a settlement was reached with AT&T to breakup the monopoly in the local service market. Thereafter, the local service markets represented were in seven Independent, regional, Bell operating companies, known as “Baby Bells”(Hochheiser,2002).


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