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ATT Divestiture

Introduction. What is divestiture?History of AT

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ATT Divestiture

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    1. AT&T Divestiture Ruth Much

    2. Introduction What is divestiture? History of AT&T What caused the 1984 AT&T divestiture Impact of divestiture on AT&T AT&T since the divestiture Impact of divestiture on telecommunications Conclusion

    3. Divestiture Divestiture is the reduction or selling off of assets

    4. AT&T History Late 1800’s – providing phone service 1913 – Kingsbury Commitment Government sanctioned monopoly Divested Western Union Connection of independent phone companies 1956 – Antitrust lawsuit limited activities to telephone system and government projects

    5. AT&T History (cont) 1974 – DOJ filed antitrust lawsuit Settled in 1982 with Modification of Final Judgment (MFJ) AT&T agreed to divest its Bell local exchange services AT&T allowed to perform other services Took effect January 1, 1984

    6. Cause of the Divestiture MCI established private lines between Chicago and St. Louis MCI approved to provide business long distance service MCI Chief lobbied Congress and filed antitrust lawsuit against AT&T Government wanted more competitive market

    7. Impact of Divestiture on AT&T Divested its 22 local Bell operating companies Split into 7 Regional Bell Operating Companies (RBOCs): Ameritech Bell Atlantic BellSouth NYNEX

    8. Impact of Divestiture on AT&T (cont) 7 RBOCs (cont) Southwestern Bell Pacific Telesis U.S. West

    9. RBOCs

    10. Impact of Divestiture on AT&T (cont) Continued long-distance services Kept Bell Laboratories 23% of assets and 37% of employees

    11. AT&T Since Divestiture Acquired NCR and McCaw Cellular Acquired TCG, IBM Global Network Merged with TCI and MediaOne Purchased by SBC – AT&T Inc Acquired BellSouth Acquired Dobson Communications and Interwise

    12. RBOCs Since Divestiture Ameritech – Merged with SBC Bell Atlantic – Merged with GTE BellSouth – Became part of AT&T Inc NYNEX – Acquired by Bell Atlantic Southwestern Bell – Became SBC Pacific Telesis – Acquired by SBC U.S. West – Acquired by Qwest

    13. AT&T Inc Resembles company before divestiture Includes 11 of the 22 original Bell operating companies One of the largest service providers

    14. Impact of Divestiture on Telecommunications Greater competition Greater market share for other companies More consumer choice Lower long distance rates Higher local rates Technology changes

    15. Conclusion Divestiture impacted AT&T operations Uncertain if divestiture made a difference to rates or competition May have delayed broadband development

    16. References www.corp.att.com/history/history4.htm - AT&T History: Post Divestiture http://www.usdoj.gov/atr/public/hearings/single_firm/docs/222440.htm - The AT&T Divestiture: Was it Necessary? Was it a Success? Robert Crandall. The Brookings Institution, U.S. Dept of Justice - March 28, 2007. http://www.newmillenniumresearch.org/archive/divestiture-report.pdf - Reflections and Directions: Twenty Years After the Divestiture of AT&T. New Millennium Research Council. December 2003. http://www.law.uchicago.edu/Lawecon/Antitrust/crandall.pdf - The Remedy for the “Bottleneck Monopoly” in Telecom: Isolate It, Share It, or Ignore It? Robert W. Crandall, Antitrust Conference. June 18-19, 2004. http://www.discovery.org/a/2412 - SBC/AT&T: Will Two Decades of Post-Divestiture Folly Finally End? John Wohlestetter, Technology & Democracy Project. February 4, 2005. http://www.utilityregulation.com/content/essays/t9.pdf - AT&T Divestiture http://www.computerworld.com/networkingtopics/networking/story/0,10801,77644,00.html – The Story So Far: The Telecom Industry. Mitch Betts, Computerworld January 20, 2003.

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