So, yes, it's an argument for regulation, but not for breaking up a monopoly. :)
There are many good reasons to break up monopolies, but their thesis is that the 1984 breakup led to the development of ISPs because people were all of a sudden allowed to plug random things into the network.
[1] Carterfone Decision: https://en.wikipedia.org/wiki/Carterfone#Landmark_regulatory...
however in the mindset of ATT and telco management, all these things are linked. It's like when Microsoft supported Apple or soft pedalled some of it's legal case against linux in the late 90s and early 2000s - it wasn't directly linked to the government suing them for bundling a web browser circa late 90s, but in the management of Microsoft, they had to gauge their decisions against whether the government might object to their behavior, essentially whether their "brand" with the government regulators would be damaged if they, say, systematically obliterated linux the way they did Dr Dos in the late 80s/early 90s.
However, that wouldn't support their thesis. Their thesis is that looking at consumer cost reductions is the _wrong_ way to look at monopolies.
Since the RBOCs were local monopolies, it wasn't the breakup which resulted in the opening of the network.
They didn't have competition until 1996, when the local loop was unbundled, allowing CLECs to appear. The tradeoff was that if they could demonstrate local competition, they were allowed to enter the long distance market.
It was FCC regulation which allowed interconnection of non-approved devices [1]. "In the 1960s and 1970s, the FCC gradually relaxed regulation of telephone terminal equipment (e.g., telephone handsets, private branch exchanges), known as customer premises equipment (CPE)."
[1] https://www.nap.edu/read/10235/chapter/11#298
[2] http://bpastudio.csudh.edu/fac/lpress/471/hout/telecomHistor...
[3] https://www.mackinac.org/6033