What are the Baby Bells
The Baby Bells were the U.S. regional telephone companies that were formed from the breakup of AT&T ("Ma Bell") in 1984. The Baby Bells were created because of a U.S. Department of Justice antitrust suit against American Telephone & Telegraph Co., which was initiated to create more competition within the industry. As a result of a Jan. 8, 1982 consent decree, AT&T would relinquish control of the Bell Operating Companies, known as local exchange service operating companies, and therefore its monopoly over phone service in the United States in Canada. That decree gave birth to the seven Baby Bells, known as Regional Bell Operating Companies (RBOC), previously known as Regional Holding Companies. There were also two smaller, somewhat independent RBOCs that made for a total of nine Baby Bells that were assigned a portion of the Bell trademark.
Breaking Down Baby Bells
The petition to break up AT&T was first brought in 1974 in United States vs. AT&T. The legal rationale for breaking of the American Telephone & Telegraph Co. (later AT&T Corp.) was based on Section 2 of the Sherman Antitrust Act. The company was the only provider of telephone services in much of the United States at the time. And most telephone equipment at the time was produced by an AT&T subsidiary Western Electric. This gave AT&T nearly complete control over both telephone service and equipment in the U.S. The suit against AT&T was not to create the Baby Bell system but to force it to divest Western Electric. Seling that they were likely to lose that case, AT&T decided to propose an alternative, which would be a self-imposed breakup of the largest company in America. With some modifications, AT&T's proposal was accepted. After the divestiture the Baby Bell regional holding companies retained the Bell trademark, about half of Bell Labs, its research and development subsidiary, and the Yellow Pages directory business.
Baby Bells After the Breakup
On Jan. 1, 1984 AT&T was broken up and its 22 member concerns reformed into seven independent Regional Holding Companies, or RBOCs — the Baby Bells. They were:
- NYNEX: Served most of New York state and five New England States
- Bell Atlantic: Now Verizon Communications after 2000 merger with GTE.
- BellSouth: Served customers in nine southeastern states. Bough by AT&T in 2006
- Southwestern Bell Corp.: later SBC Communications; bought by AT&T in 2005. Served customers in six midwestern states
- US West: Bought by Qwest in 2000 and then by CenturyLink in 2011
- Pacific Telesis: Bought by Southwestern Bell (SBC) in 1995 and later by AT&T in 2005
- Ameritech: Bought by SBC in 1999. Now part of AT&T
Similarly, Cincinnati Bell and Southern New England Telephone (SNET), which were partially owned by AT&T, became fully independent and were given rights to the Bell trademark after the breakup.