Effects of deregulation on competitive market opportunities

On January 1, 1984, AT&T was divested of its 22 operating companies. On this same date the Federal Communications Commission (FCC) deregulated customer premise equipment (CPE) thereby restricting the telephone company's (telco) monopoly. This stimulated competition in the telecommunications marketplace while also individualizing the logistical channel of distribution and the communication channel. In the past demand within the logistical channel was dependent upon demand within the communication channel. The surge of competition ignited by the regulatory changes significantly altered these relations. Competition from supplier interconnects as well as long distance carriers are causing shifts that are changing the industry structure. This paper explores the interdependency of the logistical and communication channels within the environment of deregulation.