1970-Present:The Modern Telephone Network
Digitalization of the telephone network sowed the seeds for a second government action against AT&T. The appearance of standardized digital carrier systems in the 1960s had blown apart Vail’s justification of a natural monopoly based on incompatibility.
Round two of the antitrust wrangling with AT&T commenced in 1974. Although distracted by legal battles with the Department of Justice, AT&T remained the dominant telecommunications carrier. In the 1970s, AT&T pioneered fiber-optic transmission, beginning with an experimental system in Chicago that could carry 672 voice channels on a single strand of glass.[4]
Legal struggles concluded in 1982. AT&T retained businesses that operated in competitive marketplaces, namely long distance, Bell Labs and other R&D centers, and Western Electric. The Regional Bell Operating Companies (RBOCs), which were formed from AT&T’s local exchange assets, continued to regulate local telephone service as a natural monopoly. After a long preparation period, AT&T split off from the RBOCs on January 1, 1984, in a momentous event known as divestiture. T1 had been used as a trunk line in the AT&T network for many years, but it was only after divestiture that T1 became a tariffed service that could be ordered by customers.
The Problems with T-carrier
Problems with the T-carrier hierarchy stem from one simple fact: T-carrier systems were designed for AT&T’s voice network. They can be used to transport data, but the ...
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