Splitting a large monopoly into smaller territorial monopolies gets you all the drawbacks of a monopoly with none of the benefits of centralization. Pretty much a total loss. Improvement in US telecom probably had more to do with demonopolization wholesale at the national level rather than the formation of the baby bells.. which pretty much all failed.
>...rather than the formation of the baby bells.. which pretty much all failed.
The general premise is that the smaller companies allows competition to enter the market. It is precisely because of this competition that the smaller bells all failed - because they were still stuck in the mentality that they needn't compete, whilst also lacking the resources to drive the competition out of town (e.g.: lobbying, buy them out, etc.). They didn't control the whole chain, anymore.
That's supposed to be the idyllic of the capitalist system, yeah?
I'm genuinely not trying to be contrarian, here, but trying to understand how breaking up a monopoly, such as Bell, didn't have any direct consequences on the territorial monopolies.
For example, if Bell had an agreement with 'x' area that they were the sole provider in that area, then as soon as they were no longer Bell, that monopoly agreement essentially hit dissolution, yeah? In principle, that should have an almost immediate net-positive effect on the area, I would think?
How did the Baby Bells fail? AT&T and Verizon are Baby Bells that merged with other Baby Bells.
They did drive out the competition. The Baby Bells inherited the existing infrastructure. Most competing carriers relied on regulations that allowed them to lease access at wholesale rates. The Baby Bells got those regulations overturned. Investors weren't lining up to fund duplicate infrastructure anyway but especially not when the Baby Bells could tie up any project in court for months or years.
Dividing a national monopoly into regional monopolies did almost nothing to improve competition. Vertical disintegration did while it lasted.
The only companies that really managed to compete with the Baby Bells were cable companies, which had built out infrastructure before they started competing.
It seemed have helped in the Ma Bell[0] days[1].
[0] - https://en.wikipedia.org/wiki/Bell_System
[1] - https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System