ABSTRACT
The telecommunications industry was thrown open to competition after the entry of a consent decree in 1982 in an antitrust suit brought by the Justice Department against AT&T. The Telecommunications Act of 1996 went even further in encouraging competition by abolishing local telephone monopolies, requiring existing telephone companies to provide interconnection to their networks, and encouraging free entry into other areas of telecommunications. Telecommunications firms had spent heavily to rewire the country for cable and then turned to fiber-optics for broadband, an investment that would not be recovered before the stock market collapsed and the recession hit. Lucent’s stock price jumped by 30 percent after the company met analysts’ expectations for fifteen straight quarters.
