August 5, 1983: AT&T is Split Into Eight Regional Companies

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On August 5, 1983, after nearly a decade of court dogfighting, AT&T  (T) - Get Report was forced by regulators to split into smaller factions.

Here's the story:

In the 1970s, AT&T's domination over the U.S. telephone services industry was known as the Bell System; AT&T had the nickname Ma Bell. Everyone had to use the company to use its ever-increasing services provided.

Faced with this communications behemoth, the United States Justice Department opened the antitrust case of United States v. AT&T in 1974.

The violation cited was that AT&T has been using monopoly profits from Western Electric to subsidize the cost of its network, a violation of antitrust law.

After years of court fighting, and feeling that it was about to lose the suit, AT&T proposed its own breakup.

On January 1, 1984, divestiture began and the Bell System was broken into a new AT&T company and seven regional Bell operating companies.

On the positive side of this, phone quality increased, prices drop, and phone rentals decreased. Companies like MCI and Sprint were now able to challenge AT&T in this ever-evolving market for the first time.

However, many say AT&T’s breakup delayed high-speed internet for consumers for years to come.

By 2018, most of the Bells were together once again under the single company called AT&T. Today, AT&T, led by its mobile and fixed telephone services, is a telecommunications giant, acquiring DirecTV in 2015 and Time Warner in 2018.

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