Reference no: EM133202136 , Length: Word count: 400 words

Assignment Problem: In 1984, the New York Times published the following article:

'A new era for American telecommunications and for American business begins today as the once-unified Bell System begins life as eight separate companies. It is a time of great expectations and great concern for both the telephone industry and the nation as a whole.

No company so large and technologically integrated as the Bell System has ever split itself into pieces before, not even in the great trust-busting days early in the century.

No nation has ever made a determination to let the forces of competition, rather than government-backed monopoly, determine the future of something so vital as its telephone network. It is an especially daring course for the nation that, by almost all accounts, already has the best phone system in the world. If the gamble is lost, quality of telephone service could deteriorate.

''To break up a very tight network is something quite unprecedented,'' said Alfred D. Chandler Jr., professor of business history at the Harvard Business School. ''It was one of the best managed companies in the world for a long time. You go overseas and people there can't understand why we're breaking up A.T.&T.''

That was an initiative to break a government- support monopoly in telecommunications, with the entry of new companies in the sector, and the belief that eliminating the monopoly would promote competitive pricing.

Can you identify other legal monopolies currently existing in the USA legal monopoly, based on economies of scale, that could be split into more firms to foster competition?. What do you anticipate would happen to prices? And how about the level of efficiency of the service provided.