Telephone network history

Morse and his partner, Alfred Vail, completed the forty-mile line in May 1844.

Western Union attempted to enter the infant telephony market in 1861, after securing some patent ammunition of its own with the construction of the first transcontinental telegraph line.

In July 1876, Alexander Graham Bell demonstrated this experimental telephone at the Centennial Exhibition in Philadelphia to introduce his new invention to the world.

In 1877, he formed the Bell Telephone Company with two investors.

The year 1878 saw the construction of the first telephone exchange in New Haven, Connecticut.

Western Electric was an engineering firm with a record of successfully manufacturing novel inventions (including the incandescent light bulb), but was forced to sell a controlling stake to American Bell in 1881 to survive.

In 1883, Western Electric’s Mechanical department was founded.

AT&T was formed in 1885 to connect the local Bell companies.

After Bell’s patents expired in 1894, the company faced fierce competition from many upstart telephone companies.

In the midst of all this, AT&T became the parent company of American Bell in 1899.

First used as a business tool, after 1900 the telephone expanded into private homes and ultimately became a necessity of daily life.

Theodore Vail, who had led American Bell’s patent fight against Western Union, took the helm of AT&T in 1907 and guided the company to the dominant position it would hold for much of the 20th century.

Their logo read "The Bell System: AT&T and Associated Companies." The network grew rapidly with the slogan "one system, one policy, universal service." In 1913 AT&T agreed to become a regulated monopoly.

AT&T began experimenting with radio as a means of enabling transatlantic communication in 1915.

They made commercial radio service available in 1927, but for a hefty price: calls cost $75 for 5 minutes.

In 1949, the United States government brought an antitrust suit against AT&T in an attempt to divest Western Electric.

Competition began creeping in 1956, when the courts overruled an FCC ban on Tom Carter's Hush-a-Phone, a device which snapped on to a telephone and made it possible for the user to speak in a whisper.

The 1968 Carterfone decision allowed the direct connection of devices to the AT&T network, creating an opportunity for many competitors.

Until 1984 AT&T was a regulated monopoly in the US, but it was privately owned.

The Telecommunications Act of 1996 required RBOCs to allow competitors access to their local lines at regulated wholesale rates.

Then SBC assumed the name "AT&T" and introduce a new logo. It is interesting to note the political change since 1997, when Reed Hundt, then the FCC chairman, said Southwestern Bell acquiring AT&T would be "unthinkable" since it would thwart competition.

Although only 37% of nations had competition for long distance calling in 2001, the Internet was competitive in 86% of nations.

The four global figures shown above are from the 2002 World Telecommunication Development Report, an excellent annual report published by the International Telecommunication Union.