(From "$200 Billion Broadband Scandal", January 2006), Updated August 2007.

• AT&T — SBC, Southwestern Bell, Pacific Telesis, Ameritech, SNET, AT&T, BellSouth
• Verizon — Bell Atlantic, NYNEX, GTE, MCI
• Qwest — US West
  

They put Humpty Dumpty Back together again -- and it is to the detriment of competition.

For over 100 years, Ma Bell, sometimes called the "Bell System" sometimes called "AT&T", controlled almost all telecommunications in the US. Once the largest company in the world with over one million employees, the company consisted of 22 local Bell companies, (including New York Telephone and Ohio Bell), AT&T Long Lines, (the long distance division) as well as Western Electric, (the subsidiary that manufactured telephone equipment) and Bell Labs, one of the premier research organizations.

Then in 1984, because of the monopoly control the company had over phone service, the company was broken-up and the local Bell phone companies were divvied up among seven, artificially created, very large companies called "Regional Bell Operating Companies" (RBOCs, pronounced "R-BOKS") or sometimes the "Regional Bell Holding Companies" (RHC) and sometimes "The Baby Bells".

Each company controls specific geographic regions of the US. For example, Ameritech controlled a five-state region: Illinois, Indiana, Michigan, Ohio and Wisconsin.

This diagram gives the original Baby Bells, the phone company(s) it controlled, and the state(s)

The original seven RBOCs were:

• Ameritech
• Bell Atlantic
• BellSouth
• NYNEX
• Pacific Telesis
• Southwestern Bell
• US West

• AT&T was purchased by SBC Communications, which owned Southwestern Bell, Pacific Bell, Ameritech, SNET, BellSouth and AT&T, the long distance company. SBC changed its name to 'at&t" (lower case.)
• Verizon, which owned Bell Atlantic, NYNEX, and GTE and bought MCI, the former long distance company.
• Qwest, now owns US West

Over the last seven years, all of the holding companies removed the local Bell name for the name of the holding company.

• New York Telephone became NYNEX, then Bell Atlantic and the Verizon.
• Ohio Bell, Indiana Bell, Wisconsin Bell, Michigan Bell and Illinois Bell were all renamed "Ameritech".

The holding companies own literally hundreds of other companies, each with their name-brand.For example, here are just a few of the NYNEX companies:

• NYNEX Entertainment & Information Services Company
• NYNEX Asset Management Company, NYNEX Credit Company
• NYNEX Capital Funding Company
• NYNEX Trade Finance Company. (source: NYNEX 3rd Q, 1997)

Mergers and More Renaming. Starting in 1997, there were a host of mergers of the Bell
companies:

• Bell Atlantic bought NYNEX and called the combination “Bell Atlantic”.
  Verizon became the combination of Bell Atlantic (with NYNEX) and GTE.
  Verizon also bought MCI.
• The new "at&t" (they use lower case letters) was formed when SBC merged Southwestern Bell, Pacific Telesis, Ameritech, SNET and BellSouth, as well as purchased "AT&T". SBC then changed the name
• US West became Qwest.
  

Instead of the original 9RBOCs as well as GTE and SNET, today there are only 3 phone incumbents who do not compete.

Originally, the Bell companies were excluded from offering long distance service. — a "Long Distance" phone call crosses state lines. A call from New York to New Jersey or from Texas to Arkansas is a long distance call.

AT&T, MCI and Sprint were the largest long distance companies in the 1990’s. In 1996, the Telecom Act of 1996 formally opened the “Public Switched Telephone Networks” (PSTN), the local phone networks, to competition. The long distance companies started to enter the local markets. Meanwhile, the Telecom Act also allowed the Bell companies to enter long distance once the networks were officially “open”.

Because of seriously flawed regulations and the power of the Bell companies to control the regulatory environment, the long distance companies were forced out of local service. Renting the local phone lines became unprofitable. Meanwhile, by 2005, the Bell companies have been able to garner over 60% of the long distance market because they could upsell local and long distance as a package.

In the" Unauthorized Bio of the Baby Bells" we argued that the Bells should never have been allowed into long distance services until there was stable competition. AT&T and MCI are currently sold, and merged into SBC and Verizon, respectively. SBC has taken the AT&T name.

As we will discuss, local and long distance distinctions are blurring — it’s all just
electrons over wires or through the air. The companies that own the wires can block competition, either through bad legislation or "friendly regulators", who have essentially been bought off or have not bothered to enforce the laws on the books.

In 2005, Verizon purchased MCI. SBC purchased AT&T and is now called “AT&T”, thus killing off the 2 largest competitors. AT&T and Verizon no longer compete, except with wireless services.

CLECs (Competitive Local Exchange Companies)

There was another group of companies referred to as Competitive Local Exchange Companies (CLECs) , who also offer local telephone service. . Some companies have their own installations, while other rented the networks from the Bell companies. Most companies only offered local business services in selected area codes in America. However, because of seriously flawed FCC regulations, most of these companies were put out of business.

There are other types of local competitors: For example, the D-LECs (shorthand for Data-CLEC) offer primarily data or DSL services, such as Covad , while the B-LECs (shorthand for Building-CLEC) offer services by wiring buildings, such as ARC. Most of these companies were also put out of business because of flawed FCC regulations.

"Wireless," "PCS", "Cellular" and "Pay Phones"

There are thousands of other companies who offer a wide array of non-wireline services, such as the wireless, PCS, or cellular companies. Also, numerous companies offer independent pay-phone services.

However, over the last decade, there has been a serious consolidation of these companies and today, Verizon and AT&T are the largest wireless companies.

Wi-Fi and Municipality Community Buildouts.

Over the last few years, a number of municipalities have decided to now wait for the Bell companies to deliver and have created new community networks using both fiber optic cables as well as wireless services, known as "Wi-Fi"

VOIP, "Voice Over the Internet Protocol" Services

A host of companies have started to offer "VOIP", Voice Over the Internet Protocol, which uses a broadband connection and the standard Internet protocols "IP", to offer voice and data services.