Background of at&T Corporation

Topics: AT&T, Bell System, Southwestern Bell Pages: 3 (742 words) Published: May 9, 2011
I. Background of AT&T Corporation:
The History
AT&T Corporation can trace its root to the American Telephone and Telegraph Company. The original company was founded in 1885 by American Bell to create a network of long-distance communication nationwide with a commercially viable cost-structure. In 1899, the company in turn acquired the assets of American Bell in order to bypass Massachusetts corporate law that limited the capitalizations of corporations. By 1915, long distance telephone service reached San Francisco and transatlantic services began in 1927.

AT&T Corporation eventually became the dominant telephone company in the United States, holding a virtual monopoly over communication services for most of the 20th century. The corporation controls the communication lines, structuring its acquisitions of smaller companies, and selling off non essential smaller phone companies to bypass the monopoly laws of the time. The company even controlled the distribution of telephone units themselves, as they were leased to the customer while AT&T retained ownership of the hardware.

By 1982, the monopoly is considered ended when the U.S. Department of Justice successfully brought an antitrust suit against AT&T. The company agreed to split into smaller regional Bell Operating Companies for a chance to gain a foothold into the computer business. Southwestern Bell Corporation was one of the “Baby Bell” as they were called after the split up. The corporation was transferred full ownership in 1984. By 1995, after several mergers and acquisitions, the company changed to SBC Communications. In 2005, SBC in turn purchased the AT&T Corporation and decided to change its name to AT&T Inc., its brand name, as well as its New York Stock Exchange ticker symbol to T that was used by AT&T.

As a result, by 2006, eleven out of the twenty two companies that were divested by the AT&T Corporation in 1984 have recombined by merger and...
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