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Are there examples of technologies developed since 1984 that would not have been likely to be developed had the Bell system stayed intact rather than being broken up by the US government?

Let's pose some specific subquestions:

(a) which post-1984 technologies have Bell Labs antecedents?

(b) What were the main topics on which Bell Labs was working in the 1970s and early 1980s?

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    Difficult to measure technological innovation, or to predict whether a monopoly would have ever delivered cell phones. (Success has a thousand fathers, and monopoly is generally accepted to defer innovation) I think this falls into the category of suspicious counterfactuals. Could you revise this to require less speculation? – Mark C. Wallace May 1 '13 at 12:18
  • @MarkC.Wallace: I tried to comply with your suggestion by adding two specific points. If you think of more, feel free to edit. – Felix Goldberg May 1 '13 at 14:41
  • Now it is a book length question!! Wikipedia and there is a Timeline of discoveries has a partial list of answers including optical routers, signaling, lasers, HDTV, optical digital processors and the like. – Mark C. Wallace May 1 '13 at 16:04
  • I realized I had answered the earlier version of your question (see below). Mark Wallace's suggestion for edits would have made sense if A T& T had divested Bell Labs and the equipment operation and kept the local phone companies. But they actually did the reverse. Instead, you might ask what impact the divestiture of the regional phone companies had on the competitive landscape and supply/demand patterns. But +1 for the question. You were "onto" something, even if it was not what you originally intended. – Tom Au May 1 '13 at 19:05
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    I recommend searching for articles on "baby bells AT&T breakup" on The Economist website. They must obviously have been in favor of a break-up a-priori (competition is good, yadda yadda yadda) , but also did balanced reporting e.g. here. – Drux May 1 '13 at 22:10
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Question:
Are there examples of technologies developed since 1984 that would not have been likely to be developed had the Bell system stayed intact rather than being broken up by the US government?

AT&T wasn't very successful at developing technology for the marketplace in its final decades as a federally legislated monopoly. They were world class in developing innovative technology, the envy of the world, which sat on a shelf almost devoid of use because AT&T operated outside of the free market and had never developed the need or instincts to introduce such technologies which their world class research facilities produced.

AT&T was a federally mandated monopoly which made wheelbarrows full of money charging exorbitant prices which were independent of market forces and competition. AT&T was used to charging 2-4-10$ a minute for long distance calls which could be as short as in an adjoining state. In a time when technology was doubling the efficiency of fiber optic lines every year, dropping the need for costly new fiber lines, AT&T continued to raise prices. After the break-up, new companies like MCI's business model was to lease existing circuits from AT&T 95% of which were dark from being unused and offer long distance service at $0.02 a minute for which days earlier AT&T was charging $4.00.

AT&T had no market pressure nor need to innovate, take risks, or promote technology which would allow them or others to be more efficient and responsive to market forces.

Given this, AT&T for decades had the money to plow into first class research facilities like Bell Labs which pioneered many important discoveries in computing, computer science and telecommunications. But under AT&T most of these discoveries lay inert, unable to fulfill their potential because AT&T did not see any need to roll them out as independent technologies which the market could consume.

Unix(1971), C(1972), C++(early 1979).

AT&T developed Unix in 1971, and it, and later its variants was widely regarded as the gold standard of operating systems. But AT&T never introduced it commercially into the market at a price point most people could entertain. AT&T spent their time suing people who tried to market it independently. It wasn't until decades later when others (SCO, Berkeley, AUX, and finally Linux) recreated AT&T's codebase and introduced Unix's concepts independent of AT&T that the technology tapped its potential. AT&T's greatly impeded the technology from being introduced on the market for decades.

The same can be said of C which took 15 years to really penetrate the commercial market and then not due to AT&T, but due to companies like Borland, Microsoft and IBM which marketed their own compilers. Even then there was no AT&T competitor on the most popular computing platforms for C or C++.

  • I have problems accepting that last paragraph. Whole operating systems plus supporting apps had been written in C before Microsoft licensed (not developed...) Lattice C, which isn't even mentioned. And while most of those other OS's have passed away since, they were part of the commercial market in their time. Some still are. – DevSolar Sep 25 '18 at 15:10
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Wikipedia and Timeline provide a hint of the many discoveries that Bell Labs was working on during the breakup. A partial list of answers includes optical routers, signaling, lasers, HDTV, optical digital processors and the like.

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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."

  • I'm not sure you have conclusively shown that the breakup was related to technical innovation (prices for long distance dropping is more of an open and shut case, but that didn't by itself cause innovation) – DVK May 2 '13 at 14:14
  • @DVK: The relevant Latin expression is Qui bono? Who benefits. Regulators initially hoped to increase competition by making equipment more available to competitors. But when A T& T protested, regulators "got there a different way" by taking away the company's chance to bundle costly and inferior long distance services with local service. It's like a child being told that he will be sent to bed without dinner as punishment, and the child's wishe to be spanked instead is granted. – Tom Au May 2 '13 at 14:44
  • While true, I don't see how this in any way, shape or form prove or even show the causation between the breakup and the innovations. – DVK May 2 '13 at 15:14
  • A typo in the second paragraph of the answer: Western Union should be Western Electric. It's correct in the first paragraph. By the way, I worked as a contractor at Bell Labs in 1982 but don't remember much about what was being worked on. :-( – Literalman Sep 19 '18 at 19:52
  • @Literalman: You mean western Electric s/b "Western Union?" Because I have "Western Electric." – Tom Au Sep 20 '18 at 1:21

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