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RBOCs (Regional Bell Operating Companies)

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The RBOCs were formed as a result of the breakup of AT&T and are based on a restructuring agreement that took effect in 1984. The final restructuring agreement was the United States District Court's Modification of Final Judgment (MFJ). MFJ ended the Justice Department's suit against AT&T. The RBOCs were organized into seven regional Bell holding companies called Ameritech, Bell Atlantic, Bell South, Nynex, Pacific Telesis, Southwestern Bell, and US West. Each RBOC was assigned a specific geographical area, and each geographical area was divided into service areas called LATAs (local access and transport areas).

The RBOCs are also called the ILECs (incumbent local exchange carriers). In contrast, CAPs (Competitive Access Providers) and CLECs (competitive local exchange carriers) are companies that compete against the RBOCs in the local service areas. IXCs (interexchange carriers) are long-distance service providers such as AT&T, MCI, and Sprint.

The Telecommunications Reform Act of 1996 changed the telecommunications landscape yet again. RBOCs were allowed to merge and the following mergers or acquisitions took place in the following years:

  • SBC Communications merged with PacBell (Pacific Telesis) in April 1996.

  • Bell Atlantic merged with Nynex in April 1996.

  • Qwest Communications bought US West in July 1999.

  • SBC Communications merged with Ameritech in October 1999.

  • Bell Atlantic merged with GTE in June 2000 and renamed itself Verizon.

So, at this point, it is better to refer to RBOCs as ILECs. They include SBC Communications, Bell Atlantic (now called Verizon), Qwest Communications, and BellSouth.

The Act also attempted to increase competition by opening local markets. RBOCs were required to open their facilities to competitive providers and, if they complied according to the rules, were allowed to expand into long-distance markets. This is discussed further under "Telecommunications Regulation." Also see "Service Providers and Carriers."

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