United States v. AT&T (1982)

United States v. AT&T, 552 F.Supp. 131 (1982), was a ruling of the United States District Court for the District of Columbia,[1] that led to the 1984 Bell System divestiture, and the breakup of the old AT&T natural monopoly into seven regional Bell operating companies and a much smaller new version of AT&T.

Background

Since the Kingsbury Commitment in 1913, AT&T was permitted by the United States government, first via the Interstate Commerce Commission and then via the Federal Communications Commission (FCC), to become the natural monopoly telephone service provider in the country (known as the Bell System) in return for commitments to universal service and basic connectivity for all consumers.[2]

Impact and subsequent events

After Greene's ruling in August 1982, the AT&T corporate structure was divested into seven regional holding companies that became known as Regional Bell Operating Companies, or colloquially as "Baby Bells", which went into operation on January 1, 1984. Those companies inherited local landline telephone services for each region, while AT&T continued to exist as a long distance service provider at about 30% of its previous size.[13] That version of AT&T was later acquired by one of the Baby Bells. Southwestern Bell; the new entity retained the AT&T name and the company evolved into the present multinational telecommunications firm known as AT&T.[14]

The most obvious impact for consumers was the proliferation of new types of telephone equipment produced by myriad companies, including answering machines and designer handsets,[15] while companies like Sprint and MCI offered competitive new options for long distance service.[16] The Baby Bells were mostly successful and some of them merged with each other, resulting in the modern telecommunications companies Verizon[17] and Lumen Technologies.[18]

The divestiture of AT&T, and the actions by courts and regulatory agencies to achieve it, was the largest government action to reduce a corporation's market power in American history,[19][20] and it is a dominant instance of the enforcement of American antitrust law.[21][22] However, the results for the American telecommunications marketplace have been mixed. Some researchers praised the divestiture as an act of deregulation (of a natural monopoly) that enabled more competition,[23][24] which in turn enabled the development of firms that could serve multiple sectors of the marketplace such as phones, computer networks, and cable television.[25]

The judicial process that enabled the AT&T divestiture is often cited as an instructive historical example in modern discussions about possibly breaking up the big tech firms that have gained market dominance in the 21st century.[29][30]

References

U.S. v. AT&T, Inc., [https://scholar.google.com/scholar_case?case=12093892347857939076&q=U.S.+v.+AT%26T+1982&hl=en&as_sdt=6,39 552 F.Supp. 131] (D.D.C., 1982).^

Alan Stone. Wrong Number: The Breakup of AT&T Basic Books, Inc., 1989^

Hush-A-Phone Backed: F.C.C. Directs Bell System to Permit 'Privacy' Device The New York Times, 7 February 1957^

Nicholas Johnson. Carterfone: My Story digitalcommons.law.scu.edu, Santa Clara University School of Law, 2008, retrieved 2015-02-03^

Kevin Granville, Tiffany Hsu. AT&T Has Had Many Run-Ins With the Government The New York Times, 12 June 2018, retrieved 7 March 2024^

Stone, pp. 119-152.^

Stone, p. 291-296.^

Steve Coll. The Deal of the Century: The Breakup of AT&T Athenium, 1986^

Robert D. Hershey Jr. Harold H. Greene, Judge Who Oversaw the Breakup of the AT&T Colossus, Dies at 76 The New York Times, 30 January 2000, retrieved 7 March 2024^

Dan Gallagher. Was AT&T Guilty?: A Critique of U.S. v. AT&T Telecommunications Policy, May–June 1992^

Paul W. MacAvoy, Kenneth Robinson. Winning By Losing: The AT&T Settlement and Its Impact on Telecommunications Yale Journal on Regulation, 1983^

Modification of Final Judgement (archived scan) in United States of America v. Western Electric Company, Incorporated, and American Telephone and Telegraph Company. United States District Court for the District of Columbia, Civil Action No. 82-0192, filed August 24, 1982. Retrieved 2019-01-29.^

AT&T Breakup II: Highlights in the History of a Telecommunications Giant Los Angeles Times, September 21, 1995^

SBC wraps up acquisition of AT&T Chicago Tribune, November 19, 2005, retrieved March 23, 2021^

Anthony Ramirez. All About/Answering Machines; For Yuppies, Now Plain Folks, Too The New York Times, 27 January 1991, retrieved 7 March 2024^

Brooke Tunstall. Disconnecting Parties: Managing the Bell System Break-Up, an Inside View McGraw-Hill, 1985, retrieved April 14, 2013^

Verizon who? CNET, January 2, 2002, retrieved 1 March 2023^

CenturyLink Merges with Qwest Wireless News, April 6, 2011^

Harold H. Greene. AT&T Divestiture and Consumers University of Bridgeport Law Review, 1984^

Stone, p. 16.^

Geoffrey M. Peters. Is the Third Time the Charm - A Comparison of the Government's Major Antitrust Settlements with AT&T This Century Seton Hall Law Review, 1985^

Mark Lloyd. AT&T and Whatever Happened to Antitrust? Center for American Progress, 5 April 2006, retrieved 7 March 2024^

Eli M. Noam. Federal and State Roles in Telecommunications: The Effects of Deregulation Vanderbilt Law Review, May 1983^

Jennifer L. Rand. AT&T Consent Decree Revisited: Setting the Stage to Free the Baby Bells George Washington Law Review, 1991^

William B. Pribis. Telephone Company Entry into the Cable Television Market: The Clash between the First Amendment and the Laws and Procedures of Antitrust Enforcement Suffolk University Law Review, Fall 1994^

John R. Worthington. The Case for Continued Judicial Enforcement of the AT&T Decree Hastings Journal of Communications and Entertainment Law, 1986^

Christopher S. Yoo. The Enduring Lessons of the Breakup of AT&T: A Twenty-Five Year Retrospective Federal Communications Law Journal, 2008^

George J. Alexander. Antitrust and the Telephone Industry after the Telecommunications Act of 1996 Santa Clara Computer and High-Technology Law Journal, 1996^

Mahan Usman. Breaking Up Big Tech: Lessons from AT&T University of Pennsylvania Law Review, January 2022^

Ernesto Falcon. What the AT&T Breakup Teaches Us About a Big Tech Breakup Electronic Frontier Foundation, 2021-03-01, retrieved 2024-03-07^

litigants	U.S. v. AT&T
court	United States District Court for the District of Columbia
courtseal	District of Columbia Court of Appeals Seal.svg
decidedate	August 24,
decideyear	1982
fullname	United States of America v. American Telephone & Telegraph Co., et al.
citations	552 F.Supp. 131
holding	The Sherman Antitrust Act enabled the United States government to break up the AT&T telephone monopoly into seven smaller companies.
judges	Harold H. Greene
lawsapplied	Sherman Antitrust Act

Background

District court proceedings

Impact and subsequent events

References