Worked by:Besa Azemi

Lecturer:Prof.Bojan Georgievski

• AT&T Corp., originally the American Telephone and Telegraph Company, is the subsidiary of AT&T that provides voice, video, data, and Internet telecommunications and professional services to businesses, consumers, and government agencies. During its long history, AT&T was at times the world's largest telephone company, the world's largest cable television operator, and a regulated monopoly.

•History of AT & TThe AT&T Corp., formerly known as the American Telephone and Telegraph Corporation, is as old as the telephone itself.

AT&T can indirectly trace its origin back to the original Bell Telephone Company founded by Alexander Graham Bell after his invention of the telephone. One of that company's subsidiaries was American Telephone and Telegraph Company (AT&T), established in 1885, which acquired the Bell Company on December 31, 1899 for legal reasons, leaving AT&T as the main company. AT&T established a network of subsidiaries in the United States that held a government-authorized phone service monopoly, formalized with the Kingsbury Commitment, throughout most of the twentieth century. This monopoly was known as the Bell System, and during this period, AT&T was also known by the nickname Ma Bell. For periods of time, the former AT&T was the world's largest phone company.

•Monopoly• Alexander Graham Bell patented the telephone in 1876, and formed Bell

Telephone which licensed local telephone exchanges in major US cities. AT&T was formed in 1885 to connect the local Bell companies. Their logo read "The Bell System: AT&T and Associated Companies."The network grew rapidly with the slogan "one system, one policy, universal service." In 1913 AT&T agreed to become a regulated monopoly. Their monopoly would be allowed, but they had to connect competing local companies and let the Federal Communication Commission (FCC) approve their prices and policies.

• As a result of a combination of regulatory actions by government and actions by AT&T, the firm eventually gained what most regard as monopoly status.

• Further they lobbied to block other companies from expanding or adding their own personal structure. All competitors had to pay AT&T a usage fee to connect long distance calls. By subverting the traditional landlines, satellites allowed competition to convert calls more efficient and avoid the long line connections.

•Erosion of "a natural monopoly”• For many years, AT&T had been permitted to retain its monopoly status

under the assumption that it was a natural monopoly. The first erosion to this monopoly occurred in 1956 where the Hush-A-Phone v. United States ruling allowed a third-party device to be attached to rented telephones owned by AT&T. This was followed by the 1968Carterfone decision that allowed third-party equipment to be connected to the AT&T telephone network. The rise of cheap microwave communications equipment in the 1960s and 1970s opened a window of opportunity for competitors — no longer was the acquisition of expensive rights-of-way necessary for the construction of a long-distance telephone network. In light of this, the FCC permitted MCI (Microwave Communications, Inc) to sell communication services to large businesses. This technical-economic argument against the necessity of AT&T's monopoly position would hold for a mere fifteen years until the beginning of the fiber-optics revolution sounded the end of microwave-based long distance.

•The Breakup of the Belly System• The breakup of the Bell System was mandated on January 8, 1982, by an

agreed consent decree providing that AT&T Corporation would, as had been initially proposed by AT&T, relinquish control of the Bell Operating Companies that had provided local telephone service in the United States up until that point. This effectively took the monopoly that was the Bell System, and split it into entirely separate companies which would continue to provide telephone service. AT&T would continue to be a provider of long distance service, while the now independent Regional Bell Operating Companies (RBOCs) would provide local service, and would no longer be directly supplied with equipment from AT&T subsidiary Western Electric.

• From 1984 until 1996 AT&T was an integrated telecommunications

services and equipment company, succeeding in a newly competitive environment.

•Post break-up restructuring• On January 1, 1984, a court forced AT&T to give up its 22 local Bell companies,

establishing sevenRegional Bell Operating Companies (RBOC). A few local companies that were not wholly-owned subsidiaries of AT&T remained independent, but the RBOCs were very powerful and covered the US.Since that time, mergers have reduced the number of RBOCs to four: Verizon (originally Bell Atlantic and Nynex), Qwest (Qwest Communications International took over US West), BellSouth and SBC (originally Southwestern Bell and Pacific Telesys). The AT&T logo has evolved to reflect changing market conditions.

• AT&T also spun off their equipment manufacturing and research operations. They became a long distance carrier with a new logo.AT&T had competition in long distance from companies like MCI and Sprint, but the RBOCs could only offer local service.

• The Telecommunications Act of 1996 required RBOCs to allow competitors access to their local lines at regulated wholesale rates. In return, RBOCs could offer long distance service if they demonstrated there was local competition in their market.

•The new AT &T• On September 20, 1995, AT&T announced that it was restructuring into three

separate publicly traded companies: a systems and equipment company (which became Lucent Technologies,) a computer company (NCR) and a communications services company (which would remain AT&T.) It was the largest voluntary break-up in the history of American business. Lucent became independent on September 30, 1996. NCR followed on January 1, 1997. Employees generally followed their work. While the Bell Laboratories name went to Lucent Technologies, those researchers who supported the communications services business stayed with AT&T as the staff of the new AT&T Labs.

• The new AT&T began evolving from a long distance company to an integrated voice and data communications company, as an ever increasing percentage of the traffic on its network was data, and to a lesser extent video, rather than voice. AT&T worked to reenter the local telephone service business, as envisioned by the Telecommunications Act of 1996. AT&T realized that as a result of this new law, the stand-alone long distance business was likely to decline. The company successfully launched an Internet service, AT&T WorldNet® Service , while selling operations, such as AT&T Submarine Systems and Skynet Satellite Services, that no longer were a strategic fit.

• Over the next four years, AT&T took many actions to succeed in the changing environment. The company invested over $35 billion in acquisitions and upgrades to its infrastructure both to manage ever-increasing volumes of internet protocol and other data traffic, and to establish direct local connections to business customers. AT&T acquired a leading provider of local telephone service to business customers (TCG.) It acquired a leading provider of global data networking services (IBM Global Network.) It merged with two large cable companies, (TCI and MediaOne.) Operating as AT&T Broadband, the unit became the largest cable company in the United States.

• By mid-2000, AT&T had three rapidly evolving networks- data, broadband, and wireless, and four separate businesses-cable, wireless, business, and consumer. And in 2000, the volume of data traffic for the first time exceeded the volume of voice traffic on the AT&T network.

• In October 2000, AT&T announced that it would restructure over the next two years into a family of separate publicly held companies: AT&T Wireless, AT&T Broadband, and AT&T. In this way, each business could best obtain the capital structure needed to fund its growth. AT&T Wireless became an independent company on July 9, 2001. On December 9, 2001, AT&T and the cable-operator Comcast reached a definitive agreement to merge AT&T Broadband with Comcast. The businesses completed their merger on November 18, 2002, and began combined operations as the Comcast Corporation.

• With the completion of the restructuring, David W. Dorman succeeded C. Michael Armstrong as Chairman and Chief Executive Officer of AT&T in November 2002.

• As Dorman assumed leadership of AT&T, the global telecommunications industry entered an era of unprecedented chaos and instability – marked by oversupply, fraud, a complicated regulatory environment and nonstop pricing pressures. Combined, these forces led to an industry meltdown in which numerous bankruptcies, defaults and business failures occurred; investors lost billions and countless workers in the communications sector lost their jobs.

To address the dynamic environment, Dorman led an aggressive strategic transformation to fundamentally reshape AT&T – to evolve from a consumer-oriented voice company to an enterprise-focused networking company. The redesigned AT&T became a global IP networking provider dedicated to delivering powerful networks, applications and capabilities to business and government customers. Concurrently, AT&T introduced a breakthrough alternative to traditional services – VoIP, or Voice over Internet Protocol – for consumers and small businesses.

• In January 2005, the most profound aspect of AT&T's ongoing transformation was announced: the pending $16 billion merger with SBC Communications to create the industry’s premier communications and networking company. Through this deal, the people of AT&T have the opportunity to build the defining entity in global communications for the 21st century – a company capable of delivering advanced networking technologies and a full suite of integrated communications services throughout America and around the world.