>The FCC also found evidence during this period that AT&T was overcharging consumers for physical products that had been manufactured by its equipment subsidiary Western Electric, which was itself a monopoly, and using the resulting monopoly profits to subsidize its landline network operations, which was a violation of antitrust law.[5]
These developments, along with an appreciation of new technologies and business models for telephone service that were becoming available, convinced American regulators that AT&T should no longer be tolerated as the natural monopoly in that marketplace.[6] A plan to break up the company into smaller components was proposed by the United States Department of Justice starting in 1974, citing authority under the Sherman Antitrust Act to reduce the power of a monopoly firm.[1] AT&T itself recommended a divestiture structure in which it would be broken up into regional subsidiaries.
Given the context it seems they were fried anyway and were just able to negotiate how the split would be done
These developments, along with an appreciation of new technologies and business models for telephone service that were becoming available, convinced American regulators that AT&T should no longer be tolerated as the natural monopoly in that marketplace.[6] A plan to break up the company into smaller components was proposed by the United States Department of Justice starting in 1974, citing authority under the Sherman Antitrust Act to reduce the power of a monopoly firm.[1] AT&T itself recommended a divestiture structure in which it would be broken up into regional subsidiaries.
Given the context it seems they were fried anyway and were just able to negotiate how the split would be done