A phone call between Mark Zuckerberg and Facebook employees was leaked earlier this week. In the call Zuckerberg talked about the social media giant’s response if presidential candidate Elizabeth Warren’s plan to break up facebook were to come to fruition.
If it happened, this wouldn’t be the first time the United States government broke up a large company. Believe it or not, in the early 1980s, the government set its sights on AT&T.
The federal government took the telecom juggernaut to court, believing it had become a monopoly. When the dust settled, AT&T was broken up into several companies that were known as “The Baby Bells.”
The new companies were fully independent operations from AT&T. Among them were: Bell Atlantic, Bell South, Southwestern Bell, Ameritech, NYNEX, Pacific Telesis, and US West. Each baby bell operated in a separate region of the company. Customers still weren’t able to choose their phone company, but the phone company was more locally controlled.
AT&T became a long-distance provider. For years, the long-distance market was dominated by AT&T, Spring, and MCI. You may not have been able to choose your phone company, but you did have a choice when it came to long-distance.
Let’s back up a minute for younger readers. Back before cell phones, when landlines ruled the world, you couldn’t just pick up your phone and call anyone in the country for free. If you wanted to call someone in another city or another state, you had to make a long-distance call, and that call would cost additional money. You paid per minute for these calls.
You’re probably wondering what happened to the Baby Bells. Well, the experiment that began with AT&T’s break up in 1984 did succeed in creating competition in the marketplace, but through a series of mergers and acquisitions, AT&T does now own a large percentage of its former territory.
Verizon Wireless and CenturyLink are the companies that own the Baby Bell companies that AT&T didn’t recapture.
Also AT&T isn’t exactly the same AT&T that was split up. In 2005, Southwestern Bell Corp., which was then known as SBC, purchased AT&T and retained the AT&T name.
What does this story mean for Facebook? It is a different time and technology has changed by leaps and bounds, but history has shown that while the government can temporarily break up and regulate large companies, nothing really stops them from merging back after some time has passed.
