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Underwriting the Internet: How Technical Advances, Financial Engineering, and Entrepreneurial Genius are Building the Information Highway by Leslie S. Hiraoka

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Chapter 9 The Telecom Crash

In 1984 the venerable Ma Bell system was split in two: AT&T's long lines and the seven geographically separated local telephone companies known as Baby Bells. The government-ordered breakup, while deregulating long-distance operations, kept the local calling areas monopolistically intact. The Federal Communications Commission also weighed in by ruling that data traffic, unlike voice communications, was not subject to access charges by the regional Bells. In doing so, data transmission over the entire telecom network of local and long lines was deregulated, spurring competitors like WorldCom to enter the business. Founded as Long Distance Discount Services (LDDS) in 1983, the tiny start-up that became WorldCom was barely ...

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