In the final weeks of 1981, lawyers for the federal government and for AT&T, the largest corporation in the world, negotiated the break up of the historic Bell System. One major premise guided the lawyers for the government. The telecommunications industry was ready for competition, especially in the markets for equipment, long distance, and information services. These markets should be separated from the monopoly of the local exchange, and after the breakup the local exchange should provide plain old telephone service (POTS) and not much else. Neither the government nor AT&T expected these local exchange companies to be innovative, and in their negotiations, they paid little attention to the future of rural telephone companies in sparse states like South Dakota.

Over the next quarter century, rural phone companies in South Dakota responded to the threats and opportunities of deregulation and competition in a variety of ways. Many were remarkably innovative, seizing opportunities to expand into new markets and lines of business in an effort to survive and thrive in the new era. Some aggressively grew by mergers and acquisitions to create economies of scale that made them more competitive. The companies also reacted defensively, banding together to resist efforts in the regulatory arena to reduce their revenues or promote competition in their markets. All of these efforts helped shape the marketplace for telecommunications in South Dakota today and the environment in which the deployment of broadband is taking place.

One of the chapters in THE NEW PIONEERS looks at the history of rural telephone companies on the northern Great Plains since the break up of AT&T. Follow the posts on this category to focus on telecommunications issues.