AT+T benefitted significantly from creating better technology

AT+T benefitted from new technology in three distinct ways. First, its scale and the nature of its products and services meant that even small technological improvements could have massive effects. Second, there was a semi explicit contract with the government that AT+T would not be broken up as long as they continued to improve their services and shed excellent technology. Third, M+A blocking regulation meant that AT+T couldn’t depend on acquisitions to provide technological advances.

“The System” of AT&T was so huge that even small efficiency gains translated to saving tons of money. Unlike in software, creating new markets (like calls to Europe, cables that can survive extreme environments, etc) required creating new, physical technology which in turn sometimes required new scientific discoveries.

AT&T’s agreement with the government was that as long as AT&T continued to improve its offerings, stay focused on communication, and shed technology, the government wouldn’t be break it up its monopoly. As noted earlier, the way that AT&T could continue to improve its offerings was through technology.

Finally, the government blocked large company M+A at several points in the 20th century and startups were just less of a thing before the latter half of the 20th century. At the same time, the nature of the technology increasingly seemed to be beyond the capabilities of a single inventor. Does the nature of the activities to create new technology and science change over time? Consequently, in order to benefit from technology, AT+T needed to build it itself.


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