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Definition: Divestiture


The breakup of AT&T (American Telephone & Telegraph Corporation), the largest company in the U.S. prior to 1984. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). Bell Labs was renamed AT&T Bell Labs, and its Western Electric manufacturing division became AT&T Technologies.

The switching centers hierarchy made Divestiture possible, because there were clear borders between long distance and local service. Except for those that handled large metropolitan regions, all non-customer facing Class 4 offices remained with AT&T, while all customer-facing Class 5 offices went to the RBOCs. See MCI Decision, Telcordia and Trivestiture.