of the FCC and state PUCs. Two other important, but less well-known entities were Western Electric Manufacturing and Bell Labs. Western Electric was the com- pany's equipment manufacturing business. Essentially, this entity manufactured equipment and in later years developed software to run it. Its output was switching and transmission products and systems. AT&T survived, grew, and prospered as the Bell System until 1984 when it was broken up by the consent decree. One corporate entity was converted overnight into eight. The long distance and equipment manufacturing business retained the AT&T brand; the seven new entities got the Bell name. The seven new entities Regional Bell Operating Companies-RBOC, for short-were given the rights to the famous Bell Logo, while AT&T got the rights to the word Bell as in Bell Labs. On January 8, 1982, AT&T announced that it had agreed to break up the Bell System in response to Justice Department demands. This news was very unsettling to the company's 992,000 employees and welcome news to competitors, many of whom had been chipping away at its business for many years. Why? Different people will interpret the facts in various ways. However, most agree that the company's once unchallenged position had been seriously curtailed. Regulatory and judicial rulings had whittled away its ability to pro- tect its business, starting with the Carterfone* decision in 1968. At the time, the most lucrative part of AT&T's business was the long distance business. For many years, the operating companies or local PRACTICAL IP AND TELECOM FOR BROADCAST ENGINEERING AND OPERATIONS exchange business had used their share of long distance revenues to make up for losses incurred in providing local service. Long distance competitors using Bell telephones as terminal points set up service at reduced pricing. AT&T long distance rates were set on average cost and included the subsidy paid to local exchange companies. Long distance competitors picked high traffic routes, leaving the lower traffic, higher cost 