The breakup was a huge win for consumers. Long-distance rates dropped significantly due to competition and the telephone system became much more open.
And I think it dramatically aided early internet adoption. If you read "When Wizards Stay Up Late" you'll see how big a barrier AT&T was to the adoption of packet-switched networks, rather than the circuit-switched networks they sold people. How far would the Internet had gotten if AT&T had banned home modems [1] or priced early ISPs out of existence? They would have vastly preferred something like AOL, not the Internet, which destroyed their long-distance call business entirely. Look at how they behaved with mobile apps up Apple launched the app store.
Our problem was that we didn't stick with it. Starting in the Reagan era, antitrust enforcement shifted toward much laxer standards. So AT&T reassembled itself as a (smaller) juggernaut and kept going.
[1] I realize this sounds insane now, but one of the things the DoJ sued for is "Obstructing the interconnection of customer provided terminal equipment and refusing to sell terminal equipment, such as telephones, automatic answering devices or switchboards, to subscribers".
It's hard to say how things would have gone differently, but I don't think it would have been much different. Looking at the ISP world today long after the dust settled, it's not that much different from the Bell era in terms of consumer choices. I have one choice in ISP for my address. A de facto monopoly entrenched by a lackadaisical attitude towards expanding infrastructure connectivity.
As I said, our problem was that we stopped holding monopolies to account. The Bell breakup was a last major success of the old approach to monopoly regulation. The reason you have one ISP is not the thinking that brought you the Bell break up, but what came after.
And I think it dramatically aided early internet adoption. If you read "When Wizards Stay Up Late" you'll see how big a barrier AT&T was to the adoption of packet-switched networks, rather than the circuit-switched networks they sold people. How far would the Internet had gotten if AT&T had banned home modems [1] or priced early ISPs out of existence? They would have vastly preferred something like AOL, not the Internet, which destroyed their long-distance call business entirely. Look at how they behaved with mobile apps up Apple launched the app store.
Our problem was that we didn't stick with it. Starting in the Reagan era, antitrust enforcement shifted toward much laxer standards. So AT&T reassembled itself as a (smaller) juggernaut and kept going.
[1] I realize this sounds insane now, but one of the things the DoJ sued for is "Obstructing the interconnection of customer provided terminal equipment and refusing to sell terminal equipment, such as telephones, automatic answering devices or switchboards, to subscribers".