Bell Telephone

Bell Telephone, and later AT&T, was the pioneer of the telecommunications industry in the United States. They ran the first copper cable, manufactured the first telephone devices, and provided the first telephone service. With such a long history of success, it is no wonder that AT&T is still around today. Owning all of the existing telecommunications infrastructure made it impossible for competitors to enter the market. It was not financially viable for anyone to try and establish a parallel infrastructure (that is, bare the cost to bury thousands of miles of cable.) For this reason, the US government had to step in and AT&T eventually became a regulated monopoly. The company was then divested into seperate regional telephone companies.

  1. Research AT&Ts history and provide the names of the regional telephone companies that it was divided into. Are those companies still in business today? Provide some examples as to whether or not the divesting of AT&T spurred growth and innovation.
  2. Microsoft was another example of a “monopoly.” Research why the DOJ had to once again step in. Give your opinion on whether this was a necessary move. (Hint: some of you may remember Netscape Navigator)

Sample Solution