Telco deregulation correlates with the birth of the entire commercial Internet. The Internet of Ma Bell-era telephony was a toy for wealthy universities and government research labs.
In fact, speaking as someone who helped build an ISP in the '90s, the adoption of the Internet --- as provided by indie IP-as-dialtone ISPs --- was owed entirely to the CLECs and their willingness to route numbers in hundreds of telephone prefixes down a PRI to a single server cage. The CLECs were almost literally the manifestation of telco deregulation; deregulation was practically a synonym for "let there be CLECs".
I call this out this simply as an illustration of the bogosity of the logic of your entire comment.
There are domains where, if left unregulated, the expected payoff is asymmetrically positive. The Silicon Valley tech ecosystem is one of those. Investors bleed money spreading relatively small investments across a pool of companies, but every now and then, boom you get a Microsoft, Google, Facebook, etc, and it makes orders of magnitude more money than was lost.
There are other domains where if left unregulated the expected payoff is asymmetrically negative. Banking appears to be the primary example here. You can make your ~5% yearly return relatively safely, but making significantly more than that can only be done with exposure to a much higher risk of a major collapse.
If you start at the Great Depression and work backwards in time, there's a financial crisis every 20 or 30 years for over a century. It wasn't until we figured out how and gained the political will to regulate the industry that that was mitigated.
Utilities may be another example. I grew up in the Southeast where electric is heavily regulated and boring, but always stable and predictable. It was interesting to witness the California energy debacle with Enron a decade ago, and compare the two.
Stable, predictable, and boring is the ideal state for systems like electricity generation/distribution and the monetary system. Underlie much of the rest of the economy and infrastructure? Check. Expected payoff is negative? Check. Then regulate for stability and robustness. Such states don't tend to naturally emerge from deregulation, except in the form of monopoly or trust, and then you've got innovation-crushing rent-seeking and anti-competitive behavior to deal with.
Now I'm not certain which domain the telcom system falls under, it doesn't seem vulnerable to the kind of major collapse enabled by deregulation in electricy and banking. However, it does have a history of monopoly and rent-seeking behavior that I think behooves us not to discount or ignore.
The government broke up the Ma Bell monopoly due to uncompetitive practices. Not until state regulation & later the 1996 Telecommunications Act, which was a regulation, not a deregulation, stipulating ILECs had to open up & allow CLECs on their networks did we see the flourishing(and eventual crash) you're talking about. The dot com bubble probably helped as anything Internet related was hot.
Do you really think the Baby Bells would have wanted to share their infrastructure with competitors? Judging by how they're trying to get back in bed with each other, my guess would be no.
It is a non sequitur argument to suggest that had telco's not been deregulated in the '80s, we would still have had CLECs building out the dialin and ISDN Internet of the '90s; that argument leaves out the fact that the RBOCs the CLECs piggybacked on were themselves the product of deregulation.
I am not sure you understand what "deregulation" is. Certainly an antitrust & monopoly busting lawsuit from the US government is not deregulation. When a regulated monopoly is broken up into smaller, regulated regional monopolies, that is not deregulation. It is also not deregulation when state & federal law has to mandate that line sharing be allowed.
Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.
The break-up of AT&T & the 1996 Telecommunications Act were nowhere near deregulations.
Also I certainly do not believe that AT&T would have broken itself up or the regional operators would have opened their lines up, had it not been for government regulatory actions.
In fact, speaking as someone who helped build an ISP in the '90s, the adoption of the Internet --- as provided by indie IP-as-dialtone ISPs --- was owed entirely to the CLECs and their willingness to route numbers in hundreds of telephone prefixes down a PRI to a single server cage. The CLECs were almost literally the manifestation of telco deregulation; deregulation was practically a synonym for "let there be CLECs".
I call this out this simply as an illustration of the bogosity of the logic of your entire comment.