[pseudalopex]

How did the Baby Bells fail? AT&T and Verizon are Baby Bells that merged with other Baby Bells.

They did drive out the competition. The Baby Bells inherited the existing infrastructure. Most competing carriers relied on regulations that allowed them to lease access at wholesale rates. The Baby Bells got those regulations overturned. Investors weren't lining up to fund duplicate infrastructure anyway but especially not when the Baby Bells could tie up any project in court for months or years.

Dividing a national monopoly into regional monopolies did almost nothing to improve competition. Vertical disintegration did while it lasted.

The only companies that really managed to compete with the Baby Bells were cable companies, which had built out infrastructure before they started competing.