The Telecommunications Industry

By Susan E. McMaster | Go to book overview

4

The Beginnings of Competition, 1956–1982

Following the signing of the consent decree in 1956, there was initially very little change in the telecommunications industry. AT&T and its subsidiaries focused on the provision of telephones and telephone service, and the independent local companies did the same. Entry into the telecommunications market was still virtually impossible due to the cost of entry and the regulatory barriers that were in place. The local operating companies held state-sanctioned monopolies, and AT&T long-distance service was protected by both FCC rules and regulations and the cost of duplicating the network. The situation changed, however, over the next few decades as technology evolved and other companies tried to enter various aspects of the industry. Despite the resistance by AT&T and the FCC at times during the period, competition began to emerge in various parts of the industry. Finally, in 1982 the courts opened the door for competition in long-distance service and in equipment, separating the long-distance and manufacturing parts of AT&T from the local operating companies.


INDUSTRY STRUCTURE

During the period from 1956 through 1982, the structure of the telecommunications industry again went through significant changes with the introduction of competition in private-line long-distance services and in equipment manufacturing. The period also saw the end of AT&T’s monopoly of the long-distance industry after a long, bitter legal struggle, with district-court judge Harold Greene

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