Evolution of United States telecommunications policy, technology, and competition at the Bell Operating Companies 1952-1996

Abstract

Attention is focused on the local Bell Operating Companies (BOCs) and to the changes initially driven by competition in Customer Premises Equipment (CPE). The federal court’s decision in January 1982 resulted in AT&T’s divestiture of the BOCs and permanently changed the landscape. This study begins well before 1982 to consider the AT&T’s tradition of control over all telephone services and the significance of losing that control. The terminal, subscriber loop, central office switches, and interoffice trunks had for many years been the exclusive province of the regulated telephone operating companies. Communications lines and terminals were indivisible and installation of any subscriber-owned equipment violated federal and state tariffs and carried the penalty of service disconnection. The demise of that tradition occurred because of technology evolution, initiatives of competitors, changes in customer requirements, AT&T responses, and ultimately the actions of governmental bodies. To fully appreciate impacts of the court-ordered divestiture and the ramifications of various adjustments necessary by the divested BOCs, mandated that this study extends into the years of the mid-nineties. Even though most historical attention rests with AT&T Headquarters. The BOCs were key to the processes. Archives of the BOCs were explored and provided details previously unstudied by historians. Other primary sources were media accounts, proceedings of governmental agencies and industry forums, and interviews of individuals involved in the events. The Bell System attitude of invincibility was a significant factor leading to their loss. In the end, a break-up would be done and open competition delivered significant benefits.