I don't know where they lived, but big utlity companies had an image problem, many people distrusted them and felt their rates were too high. In the 1930s there was great distrust of the electric power industry.
Utility rates _did_ run high in many places because the companies tended toward very heavy duty construction so as to provide reliable service and accomodate peak demand. Many people took that reliability for granted. Some utility buildings were examples of fine architecture which of course the customers paid for.
In some towns, the utilities were locally or govt owned and service quality there wasn't as good. Some (not all) "independent" local telephone companies weren't very good; those people certainly appreciated Bell System service when they could get it.
In electro-mechanical days, that didn't come cheap. The engineering necessary to tie it all together was impressive.
While competition certainly helped lower component prices, it was also the _invention_ of super-micro electronics. For example, there was always brisk competition in TVs and stereos, but the same revolution in computers allowed home electronics to drop radically in price while at the same time grow enormously in capabiltiy. In other words, a TV set or radio didn't change much between 1970 and 1980 but was radically improved between 1980 and 1990.
Likewise, the innards of the telephone company were quite different in
1980 than they were in 1970 due to technical improvements.Let's also remember the Bell System--while a monopoly--made advances in technology to reduce costs from day one. They didn't _have_ to make the huge investment in Bell Labs, but they did. They kept coming up with new inventions that reduced the cost of telephone service.
As to IBM, let's remember that IBM _did_ have a de facto monopoly in punched-card tabulating equipment, but continued to make improvements to that line. In the 1960s, IBM had a very powerful market position in mainframe computers but continually invested in improvements.
Someone else answered that question well. Local service is much more expensive, long distance service is cheaper.
Bell's ongoing history of improvements and price reductions would certainly have continued. Remember, nothing is frozen, and the Bell System would've changed some policies (such as extension rentals) to reflect changing economics.
Local telephone service, even in today's dollars, was very cheap. Long distance was more expensive than today. But this is technology. What did a color television set with remote control cost back then in today's dollars?
But remember that long distance rates were continually being reduced over time as new technology came on line.
The overriding goal of the Bell System and the government was to see that that poor pensioner or poor folk (city or rural) would have an affordable telephone. So the very basic "entry fee" to get telephone service was very cheap. If you were a business a single line was pretty inexpensive too.
As to "meeting people's needs", again this is an issue of technology availability of the era. Did a fuzzy B&W TV set with tubes that need regular servicing meet people needs? Did a slide rule meet people's calculating needs? Did a mainframe with 64K memory meet a large corporation's needs?
When I was a kid my sister and I would fight over what to watch on TV. We had the three networks. Having only one TV set did not meet our family's "needs". But the technology was such at the time this is what we can afford. Later on sets came down in price enough they we got a second set. Now people have TVs in their car and on their wrist.
It was the same with telephone service. If you needed more of it you did pay more. Telephone service used to cost more just as TV sets used to cost more.
That is true. I suspect the "bundled" offerings would've changed even without divesture. IBM once bundled its service but dropped it.
Given that equipment costs had dropped before, there's no reason to suggest they wouldn't have continued to drop. At any rate, independent of divesture was the fact that customers could own their own gear. That was in place and had nothing to do with the breakup.
The Bell System had its own culture. The unified service/supply business model was their way and had been quite successful, as you said, in providing telephone service to every nook and cranny when before there was none. The service quality was generally quite good.
It used to be in the U.S. that a white collar person could work for a large corporation for life. You did your job and they took care of you. Many had multiple generations at work. A lot of the things offered are now taken for granted (or no longer offered). We don't have that esprit de corps in so many of our endeavors anymore. I think we lost something valuable in our society. Others, who may be making a ton of money from that social change, will see it differently.
Given that culture, it is understandable how the employees felt.
As mentioned, we were working with Bell to build a data network at the time of divesture. We saw changes at that time and they were _not_ for the better. We were very concerned about the future. The experiences we had were typical of business at that time.
Well, they did hire you, didn't they? Obviously they were looking toward computerization.
Let me point out that TODAY my cable TV carrier frequently fails to charge people for premium services or charges people for services they aren't getting. You're talking about a business practice 25 years ago as a citation of inefficiency, but here it is going on to this day.