They were unfairly favoring their own subsidiaries and providing less than adequate available infrastructure to the competition. This was a clear violation of existing antitrust legislation in the United States. The purpose of the divestiture was primarily to open up competition of service, under the assumption that more market competition will result in better products at cheaper prices for consumers (Dodd, 2005). .

             Divestiture was designed for the completion of quality service lines to all telecommunication competitors, not simply those that were already owned by AT&T. The United States Department of Justice broke the national seamless network of telecommunications into 164 LATAs, or local access and transport areas. The purpose of these LATAs was to handle local telephone traffic more competitively. The end result was the creation of two distinct kinds of service providers: the local exchange carrier (LEC) and the inter-exchange carrier (IXC). The Justice Department was most interested in increasing competition in the telecommunications industry (Massey and Jackson, 2005). The overarching purpose of this move was to create a smooth transportation of calls between local and long distant telephone networks (Dodd, 2005). In all, then, divestiture was meant to facilitate competition within the telecommunications industry, improve service to consumers, and prevent unfair practices on the part of AT&T even though they owned and maintained the telecommunications infrastructure in the country.

             3. Write 250 to 500 words describing what occurred in the divestiture from 1984 to 1996.

             Prior to 1984 and the Justice Department suit against AT&T, the corporation had a near monopoly over all local and long distance operations in the United States. The only significant competition against the company was leveled in the 1960s when MCI was formed and employed microwave transmissions to overcome the need to lay their own cable.