U.S. Telecommunications Industry in 1996 - 1999 (B)

This case and “The Wireless Communications Industry: After AT&T McCaw” case together, provide a broad picture of the evolving telecommunications industry. They can be used to discuss the impact of major changes in regulatory context and major technological changes on the basis of competition in the industry, on the strategic position of incumbents, and on the boundaries of industries. The cases offer the opportunity to examine the old telecommunications industry, that is, the vertically integrated, regulated monopoly dominated by AT&T and the strategic logic driving AT&T’s conduct. The main focus of the cases, however, is on the transformation of the old industry into the new - “horizontal” - telecommunications industry. The cases provide enough information to do a structural analysis of the local service and long distance segments of the industry. The cases also document the convergence between the telecommunications, cable TV, and computer industries. This offers a setting in which to discuss issues of company-level and group-level (collective) strategy. The class can end with a brief discussion of the significance of the transformation of the telecommunications industry for the computer industry.