Bell System - Definition and Overview

The Bell System is an informal name given to the US telecommunications company American Telephone & Telegraph Company (AT&T) before AT&T divested its local exchange telephone service operating companies on January 1, 1984. Such divestiture was the result of a lawsuit alleging illegal practices by AT&T to stifle competition in the telecommunications industry; the lawsuit was brought against it by the United States Department of Justice. The lawsuit originated in 1974, and was settled on January 8, 1982. It is interesting to note that the lawsuit against AT&T was not to call for the divestiture of AT&T, but that the divestiture was entirely voluntary, as the company's composite parts would be more profitable as such than all under the Bell umbrella.