[WillPostForFood]

It stifled innovation in the home phone market - everyone had the same phone for 40 years. When people were allowed to own their phones, you immediately had innovation. Some stupid consumer aesthetic innovation, but also more real changes like cordless phones, answering machines..

[Retric]

Except they did actually innovate headsets several times including inventing the push button phone. They were even working on Cellphone technology as they were broken up.

AT&T was hardly the only phone company in that time period, people just didn’t really care. Phones just cost a lot and spending more to have buttons just wasn’t considered worth it.

Even into 1982 most people were still renting their phones from the phone company: “Some resistance to buying phones might be evident in the response to the sale offers made in New York, California and Oregon. In New York, those who now rent a plain rotary dial phone pay $3.03 a month and have the option of buying it for $35, which means that the phone would pay for itself in reduced bills in one year. The return on some other models is even faster.

Yet New York Telephone has sold only 400,000 to 500,000 of the 5.5 million phones it has placed in homes, according to Paul D. Covill, New York Telephone's vice president of marketing.” https://www.nytimes.com/1982/12/16/business/new-era-for-the-...

Only 78% of US households even had a phone in 1960, jumping to 90% in 1970, and that was unusually high compared to the rest of the world.

[WillPostForFood]

Even into 1982 most people were still renting their phones from the phone company:

Exactly! You had to. 1982 is a very relevant year, the last year before AT&T was broken up. People did want to own their phones, and they wanted choice, and they wanted fun weird phones, or cheap phones, or whatever. Monopoly quashed that.

From 1960 -> 1980 phones barely changed. Compare that to the changes from

[Retric]

You seem to misunderstand, this is months after the breakup and people still rented the phone. It stopped so quickly because the practice was literally banned by the FTC.

It seems strange today that people would rent phones, but they used to be very expensive items even outside the US. The practice ended because prices fell so far not because people’s preferences changed.

[WillPostForFood]

practice ended because prices fell so far not because people’s preferences changed.

As if prices aren't a part of preference? As if innovation isn't lowering costs? That alone torpedoes your claim - why wasn't AT&T innovating on lowering prices? Obviously because they were a monopoly and how no incentive.

What you you may not know, is that people didn't switch from renting to buying the same boring phones, the market exploded with phone options. Where was the AT&T cordless phone pre-1982?