The issue that brought about the breakup of A T & T was that it controlled 1) regional telecommunications, 2) long distance telecommunications, and 3) telecom equipment (Western Electric, Bell Labs), etc. under one roof. That allowed one company to control "too much" of the whole sector.
Regulators gave A T& T the choice of divesting either the regional telecommunciation companies or the equipment operation (later called A T& T technologies, which included Bell Labs and Wester Union), so that the equipment company would have to compete for equipment orders, instead of having a "captive" market. Somewhat to many peoples' surprise, A T &T elected to retain the equipment operation and divest the regional bell operating companies (RBOCs). Divesting the equipment operation would have been much easier.
The divestiture of the RBOCs created a level playing field by preventing A T &T from selling inferior long distance and satellite services by "packaging" them with local phone services. And it forced the downsized A T&T to charge "real" prices for these services, that allowed the growth of MCI (later MCI/Worldcom), Quest, and Sprint in long distance, as well as a number of smaller satellite broadcasting companies. Taken together, these companies brought about the popularization of the Internet, 3 and 4G telecom, and widespread distribution of media a decade or two later. It would not have happened as quickly if A T &T had been able to retain its stranglehold on the whole sector to the detriment of "competition."