Government supplies consolidating service
In return, it proposed to give up ownership of the local operating companies.
This last concession, it argued, would achieve the Government's goal of creating competition in supplying telephone equipment and supplies to the operative companies.
Prior to the breakup, the broadcast networks relied on AT&T Long Lines' infrastructure of terrestrial microwave relay, coaxial cable, and, for radio, broadcast-quality leased line networks to deliver their programming to local stations.
However, by the mid-1970s, the then-new technology of satellite distribution offered by other companies like RCA Astro Electronics and Western Union with their respective Satcom 1 and Westar 1 satellites started to give the Bell System competition in the broadcast distribution field, with the satellites providing higher video & audio quality, as well as much lower transmission costs.
However, the networks stayed with AT&T (along with simulcasting their feeds via satellite through the late 1970s to the early 1980s) due to some stations not being equipped yet with ground station receiving equipment to receive the networks' satellite feeds, and due to the broadcast networks' contractual obligations with AT&T up until the breakup in 1984, when the networks immediately switched to satellite exclusively.
This was due to several reasons — the much cheaper rates for transmission offered by satellite operators that were not influenced by the high tariffs set by AT&T for broadcast customers, the split of the Bell System into separate RBOCs, and the end of contracts that the broadcast companies had with AT&T.
Even this, however, would not save AT&T Corporation.
Another consequence of the divestiture was in how both national broadcast television (i.e., ABC, NBC, CBS, PBS) and radio networks (NPR, Mutual, ABC Radio) distributed their programming to their local affiliated stations.This led to Vo IP service providers arguing that they did not have to pay access charges, resulting in significant savings for Vo IP calls.The FCC was split on this issue for some time; Vo IP services that utilized IP but in every other way looked like a normal phone call generally had to pay access charges, while Vo IP services that looked more like applications on the Internet and did not interconnect with the public telephone network did not have to pay access charges.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 and Canada up until that point.This effectively took the monopoly that was the Bell System and split it into entirely separate companies that would continue to provide telephone service.