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Chapter 12 PPT Notes AT&T

Chapter 12 PPT Notes AT&T - The Communications...

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The Communications Infrastructure Chapter 12 American Telegraph & Telephone And the Future AT&T Monopoly and Anti-Trust A market in which there are many buyers but only one seller In a monopoly, you can ask any price for your goods... In a monopoly, you control the flow of all information A monopoly -- a persistent market situation where there is only one provider of a product or service. ... Alexander Graham Bell’s Legacy Brilliant businessman Began what would become America’s most influential company Telephone is the logical extension of the telegraph Telegraph/Telephone/Railroad Connection Industries needed each other … … AND government protection/support U.S. government gave them vast, sweeping powers Telephone needs even MORE protection/support A “natural monopoly”? AT&T claimed it was a “natural monopoly” U.S. government supported that contention with legislation that punished competitors and gave AT&T tax breaks and financial incentives AT&T & U.S. Government: Strange Bedfellows… Limitless possibility for profit for monopolies U.S. government supported AT&T’s monopoly at every stage With a monopoly, say goodbye to : Free market system, capitalism, incentives to improve or provide decent service to its customers AT&T: profitable from the start Only available in immediately profitable markets 600 patent lawsuits vs. competitors Reputation for poor service Stockholders earned 50% return annually
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