ABSTRACT
Local telephone service has long been assumed to be a natural monopoly, even after other parts of the telecommunication industry were opened to competition. The fundamental goal of the antitrust settlement agreement of 1982 that resulted in the 1984 divestiture of AT&T was to separate the natural monopoly local competition services from the potentially competitive remainder of the industry in order to prevent AT&T from using its monopoly power in local telephone service to impede competition in other services. Many states granted a legal monopoly to the incumbent local exchange carriers (LECs) and refused permission to companies seeking to compete with the incumbent LECs.
