Subsequent to '56, the prior transistor patents were royalty free, as were all Bell System patents prior to '56. Patents subsequent to '56 had to be licensed on a "reasonable" and "non-discriminatory" basis. So the patent output of Bell Labs was largely useful only for internal Bell System use, for leverage in cross-licensing agreement, and for a minimal royalty revenue compared with the value of the patents to other industries.
Long distance and local service are not really different markets from a customer point of view, at least no one thinks of them as such today. All calls have become flat-rate nationwide. They were different markets from a supplier point of view for a couple decades, since long distance required analog frequency division microwave transmission equipment that had to be engineered end-to-end and switching systems able to translate NPA and NNX into trunk group selections. The latter was expensive and distinguished "toll" from "local" switching systems. However, by the time of the breakup, digital fiber optics and large memory computer-controlled switches already were making those supplier distinctions rapidly obsolete.
Long distance and local service are not really different markets from a customer point of view, at least no one thinks of them as such today. All calls have become flat-rate nationwide. They were different markets from a supplier point of view for a couple decades, since long distance required analog frequency division microwave transmission equipment that had to be engineered end-to-end and switching systems able to translate NPA and NNX into trunk group selections. The latter was expensive and distinguished "toll" from "local" switching systems. However, by the time of the breakup, digital fiber optics and large memory computer-controlled switches already were making those supplier distinctions rapidly obsolete.