TechStuff Classic: The AT&T Story - Part One

that's why I ended up being a three partner. And of course I could easily record another part to this. Just the amount of stuff that's happened in the past seven years alone would warrant such a thing, and maybe I will. But first let's listen back to where it all began with the A. T. And T story Part one. We've had other discussions about other companies that, you know, you have to start with like a like the company

appearance General General Electric. You know, you have to go back way before General Electric to really talk about the company. So in this case, we have to talk about a man, a man who has been credited officially and through other sources as the inventor of the telephone although as we all know, when it comes to inventions, it's a lot trick. It's very tricky to narrow it down to a single person.

It takes a research society to make a technology, and turns out that there are a lot of people who are working on things all at the same time, and sometimes it's just the person who gets the first. In the case of Alexander Graham Bell, Uh, not that he didn't work very hard and make great contributions. It's just

that there were other people doing the same sort of stuff. Right, So in February, on February eighteen seventy six, that is when he filed this first pattern yep to a way to electronically transmit speech by quote causing electrical undulations similar informed to the vibrations of the air accompanying the said

voke or other sounds substantially as set forth end quote. Now. Uh, it's interesting he had already written the patent out earlier in January of that year, but there was a peculiar sort of legal loophole that he had to leap through in order for him to get this patent recognized in not just the United States, but also the United Kingdom. See the UK had a rule that stated if you wanted to patent something in the UK, it could not first have been patented anywhere else. So Graham Bell writes

up this patent he wants to get patented. He's ready to submit it, except that he first has to get over to the UK. And uh, guys, who don't know if you're familiar with this. In eighteen seventy six, there were very few options on how to get from say the United States to England that didn't involve a really long journey, right. It was basically swimming a horse right across that. Yep, you just hitch a steam of horses

to a boat and say, giddy up. I mean, we didn't really research that part, so we'd be a little inaccurate. Make sure you tweet us and let us know. But no, no, I mean, you know, because a telecommunications were not a thing at this point, because he hadn't patented it yet, all right, So it was it was taken a while, and so as it turned out, that very same day, another electrician began the filing process. I don't think actually

filed what he what he did. We're talking about Elisha Gray and Elishah Gray or or We'll just call him Gray because first of all, I assume it's Elisha. I did not look up at the pronunciation of his first name. But Mr Gray had submitted a preliminary application for a similar apparatus. It was also called a caveat. That was

the technical name for the preliminary application. He submitted a caveat for consideration for a patent the very same day that Graham Bell posted it filed his pen or technically Bell's lawyer filed the pattern right here in the United States we're talking about, yes, exactly. So Gray applied for a pattern with a very similar idea, and the story go and I don't know the truth of this, And in fact, I have proposed to Lauren, not romantically, I

mean an episode title. I've proposed to her that we actually cover the content the topic of Alexander Graham Bell and Elisha Gray, because the story about who got that patent is really interesting and I think could merit its own episode at any rate. Uh. The story is that Bell's lawyer got a look at Gray's application, which included an element that was not in Bell's work. But then when the patent was filed, there was a little scroll

in the margin that covered the same idea. So the story is that Bell's lawyer, or perhaps Bell himself, It all depends upon the account you read, lifted an idea directly from Gray's work in order to essentially beat him tempt. So Bell's patent application goes in ahead of raise, and so Bell is at least initially awarded the patent, although it was not uncontested. There was actually quite a vigorous battle in the legal system of that was gone for

a few years. And so moving ahead on in that same year March tenth, eighteen seventy six, and remember he's already filed the patent, But it was only on March tenth, eighteen seventy six that we had the famous message from Alexander Graham Bell to his assistant Thomas Watson. Mr Watson being in another room in the same building. Yeah, and and he heard it over this device what would what would become the telephone, and the message, of course was

Mr Watson, come here, I want you. And it turns out that Corey to the story, Alexander Graham Bell had acidentally spilled some acid and needed Thomas Watson to come over and help him clean it up before it did any damage to the surroundings. So not only was March tenth, eighteen seventy six the first phone call, it was the first emergency phone call. So yeah, that's a fun little little side note about this. And we are leading up to the company, but we have to lay this groundwork. Yeah,

and I find all of this pretty fascinating overall. So, so on October eighth of that year, eighty six, they had the first two way telephone call between Watson and Bell. Now, before it was a one way thing. You you could have a transmitter and receiver essentially. Now there was one

on either side. You could actually have this communication. And this is where Bell introduced his idea of what the perfect telephone salutation was, Hoi hoi, yeah, which is what Mr Burns says when he picks up the phone on on the Simpsons, Hoy hoy, that's delightful. Yeah, Alexander Graham, Bell and everyone involved in phone companies hated the word hello. They did, and we've got some notes about that. In just a little bit. There was there was a very

serious and an intense contention about this. Do you wonder it was important with a capital I? But so in Bell was getting financial backing from the fathers of two of his students at Boston University, Thomas Sanders and um Gardner Hubbard, and wound up forming the Bell Telephone Company right. In fact, at first he tried to sell the telephone patents to a rival company called Western Union. You may

have heard of that company. At the time, it was the largest corporation in the world, and he offered to sell it to them for the princely sum of one hundred thousand dollars, and Western Union told him to take a long walk off a short pier. Yeah, they didn't at that particular point in time understand what this whole telephone thing was about. They were like, that's a toy.

We don't get it right. If you wanted to send a message to someone, why would you go through all this bother when you could just telegraph it to them. We've got perfectly good telegraph lines and swimming horses, why exactly So, so they they poo pooed the idea, and that's when Bell decided to go the other route and form this company. And with that financial backing that Lauren talked about, the Bell Telephone Company came into being. UM and UH at first, it was a pretty modest affair

in the early days. They were seven seventy eight telephones in existence period, and the company had a grand total of one employee, and that one employee was Thomas Watson, the former assistant to Alexander Graham Bell, and he was He was paid the salary of three dollars per day and also had one tenth interest in the company, which, as it turns out, would probably be worth a little bit more than his salary. Yeah, so Bell goes ahead

with his company. Uh. Meanwhile, Gray, who had done some work for Western Union and had founded a company called Western Electric that was acquired by Western Union, began to compete against Bell, and uh, it got pretty nasty. Bell started to look into how he wanted to well, really the company was looking into how they wanted to form the business, and they took a queue off the Morse

Company Telegraph Company and went with a franchise model. The idea being that they would they would license out technology and telephones and things of that nature to companies that wanted to oversee the administrative efforts of handling this kind of local regionalized phone system. And so Bell would end up getting a company Bell would end up getting a portion of that revenue uh in return for the fact

that they're licensing the technology to this other company. Right right, because until Bell's patents would expire, the company was the exclusive manufacturer and provider of telephones. UM. Those those patents would expire in and that was a date that everyone in Bell was very very anxious about. They were cognizant of it, they were anxious about it. There were other companies that did attempt to spring up despite this um this legal uh monopoly that the Bell system had because

of the patents. UH. But we'll talk about that in a second before we get too far into this, because there's a lot to talk about. Let's take a quick break to thank our sponsor. You've probably tried Hulu dot com. Now. With Hulu Plus, you can watch your favorite shows anytime, anywhere. Hulu Plus lets you watch thousands of hit TV shows in a selection of acclaimed movies on your television or on the go with your smartphone or tablet, and it

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I really enjoyed the show. H John Benjamin plays the lead role of Bob, and uh, it's it's certainly one of those dysfunctional family shows with lots of absurd characters and events. Uh, you just gotta go see it, So go check that out. Okay, so we're now up to eighteen seventy eight. Now, in eight seventy eight, that's when

we saw the first regional telephone company actually launched. Not this was one operated by Bell Telephone, right, it was a franchise called New Haven District Telephone Company and uh in New Haven, Connecticut. And Bell and Western Union began to compete even more viciously. They were both launching franchises across the United States. Western Union began to use leverage by saying that they would not install any telegraph lines

in any locations that were using Bell systems. So any region that relied heavily upon telegraph services wouldn't do business with Bell because they were afraid that they did, they would never have any improvements or repair or maintenance of the telegraph systems or even operation of the telegraph system. So it's kind of you know, holding Bell Systems hostage thing. You don't you know, if you don't uh, you don't

get to play in this game because I own this game. Um. Now, Western Union's telephones were based on the work of two inventors, one of them Elisha Gray and the other Thomas Edison. Yeah, so some big names here. And on September twelve, that's when Bell Telephone Company sued Western Union, which is a big story because Bell had a small fortune at his disposal. Western Union was the largest corporation in the world at

that time. It worth more than forty one million dollars and had the backing of a certain powerful family in the United States, the Vanderbilts, And so it was a big deal that Bell would go up against this corporate giant. And that same year Gardner Hubbard, one of those financiers who backed the Bell system in the very early days, hired on a man named Theodore Newton Vale to act

as general manager slash president of Bell Telephone. Right. Veil had previously worked for the US Postal Service and and he was very key in orchestrating this legal battle. Yeah, it's also interesting because Veil will play another important role a bit further down the line. Veil had kind of

on again off again relationship with Bell Telephone. Not necessarily all by choice, no, no, but but he did help shape the company and absolutely and even as early as this, he had this vision of building a national long distance telephone network um and doing it before Bell's patents ran out, so which was hugely ambitious, incredibly ambitious, a little too

ambitious it might turn out to be. In eighteen eighty, Alexander Graham Bell decided to resign from the Bell Telephone Board of directors um and the next year one Thomas Watson would also resign. So at this point the two inventors who gave the company the very basic invention that it was all centered around, had left the board of directors at that time, I believe was putting a lot

of pressure on. They didn't really see the immediate monetary purpose of this whole nationwide network thing, and so they were they were really getting down people's throats about like, we kind of want to make money, we kind of put some money in, we kind of want a little bit back, And this is digging your heels in. Yeah, this is a whole lot of us giving you money and not a whole lot of us getting anything back. Right. Yeah, there were there were many years when this company was

operating in debt because they were setting this stuff up. Also, interest seeing little side note, Thomas Watson had a second career after his work with telephone systems. He would begin a career as a ship builder. He built ships him. Yeah, it's kind of interesting, I just thought it was neat two. This is about when Western Union and Bell Systems settle

this lawsuit. That's this ongoing dispute that had been pretty much taking up all their time over the last couple of years um because the pen infringement lawsuits were something that was just nasty on all parts. Well, in that settlement, Western Union ended up selling its telephone network to Bell, so that was a network that was what there was. Like, that's significant, So fifty five more cities go to Bell Systems. Bell in return promised Western Union of its telephone rental revenue.

So Bell Telephone also acquired from Western Union the company Western Electric that was the one that was founded by Elisha Gray and that became a T and T s manufacturing division. Hey guys, it's Jonathan from twenty. We are going to take a quick break, but we will be right back. So here's just a little information about how the phone system used to work in the United States. It used to be that you would go to a

store to get a phone and you leased it. You didn't own that phone, so you actually that phone remained the property of the parent company, which at this time is Bell Systems, and shortly will become a T and T, and so you would pay a leasing fee, and in turn, the company that you got it from was likely not directly a T and T. It was probably some regional office that also was leasing that same phone from a T and T. Certainly at this point it was Bell Systems.

But yeah, so Bell Systems leases out a phone to a regional office, the regional office leases the phone out to the custom So you didn't you never actually owned that phone, which I think some people might find a little unusual today because they think, well, I bought this piece of electrically. I mean, you turn off the service. Fine, I understand that, but that's my phone. Um, yeah not back then, Nope, you were just renting it. Really, So Western Union gets out of the way. So Bell system

effectively becomes a monopoly. And according to research terms of telephone network capacity, yeah, they're they're pretty much the There are other competing telephone networks, but they're all they're all technically illegal at this time because this is still exactly so. According to researcher John Brooks, Bell Telephone would have a level more than six hundred patent infringement lawsuits against other companies over the course of a decade, and they won

every single one of them. Because anytime a company would come up, like there were companies that were trying to create telephone systems in rural areas that Bell just had not reached, and so they wanted to give people the benefit of this technology. Bell did not have either the ability or interest to go into that market. So they would go ahead and do it themselves, and then Bell

would soothe them because they you can't do that. We have the exclusivity rights to this technology, um, and you know, and there's like, We're gonna get there and just give us time. Meanwhile, everyone's like, but I wanted to call my buddy. There's no nothing to call them on other than sticking ahead out the window and shotting, hey, Jeb, so I don't know why his name is Jeb short for Jebediah eighty five. That is when a T and

T is officially formed as a subsidiary of Bell. Yeah, and this is the the formal implementation of VAL's vision of creating a long distance network. That's the main purpose of a T and T. So a T and T is all about building out a long distance network so that people can call each other across states and across countries. Right by the end of eighty five, the company would established the very first long distance connection between New York and Philadelphia. It was capable of hand handling a huge

one call at a time, one call capacity. So I can just imagine the circuits being busy over and over and thinking they need to just wrap this up. Those people in Philly are chatter boxes. Uh yeah, So that was but it was really more of a proof of concept obviously at that point, not necessarily something that was going to be terribly practical. We're talking a little bit about how expensive these phone calls were too. Oh yeah, yeah,

they got a little little dear. Um So that same year was when the state of Indiana passed a law restricting the price of telephone rental fees. So remember I was saying, you rent your telephone, both the regional offices do it and then the customers do it. But because Bell was the only game in town, they could pretty much dictate what those rental prices were going to be. Uh. This this lawsuit said, well, you need to cut back

on those costs. So um Bell's response, The company's response was saying, well, you know, we have to have these prices because the service is expensive to to build out, to administer, to maintain. We cannot operate at a lower cost. We if we were to lower these this amount of money, we would not make a profit. We would lose money on the deal. We can't do it. So your phones are off and they shut off the phones in Indiana. Yeah,

no more calls India. Yeah sorry, and um it would be a couple of years before they would when service was restored for one corporation to have. Yeah. Some people said the A. T and T statement was that this was an example of quote the futility of public action and ignorance end quote, saying that you know, you guys were all upset and you told us that we had to do this thing, but you didn't understand that we were doing it because that's financially what we have to do.

Other people said, no, A T and T held the state hostage by saying you don't get phone calls until you play ball, which I think is a fair that's that's that's pretty awful. So well, without actually looking at the financial books share and knowing that the company did operate in debt for a while, entirely it's hard to say, although you know at the time they were positing themselves as sort of a public service almost that's right, akin to something like the post Office, which would become much

more their their message in a few years. So seven that was the first year that Theodore Vale resigned as president. Yea, that that was directly, I think in due to his frustration with the board, like he was saying earlier. And there was a dispute with some Boston financial backers as well, and all of that kind of fed into Veil's resignation. He just decided that that was not where he needed to be, so that he leaves. Don't worry, He's part

of the story is not over yet without him. Meanwhile, in eighteen eighty nine, the Bell system would adopt the first official Bell logo. Yeah what it looked like a bell? Yeah, okay, that makes sense alright. That was when the first long distance connection was established between New York and Chicago. And this was the real display of long distance. You know, New York to Philadelphia was impressive. New York to Chicago was a much greater distance. So this was marked by

a ceremonial phone call. Graham Bell would make that one as well, yep, Alexander Graham bells on the call. I did not see who he was calling. Maybe it was just you know, prank calls, and he was making prank calls to Chicago and ordering pizza and then saying, our pizza is better than your pizza. I can only hope, I would really hope. So, I mean you think prank called pizza, it fits so the after all, the very first call on a mobile phone was a prank call.

But the capacity of this line was just like the one from Philadelphia, one at a time, and it cost nine dollars for the first five minutes, which you you did the math on inflation, yeah, I used in the inflation calculator. Now, normally I would use the Bureau of Labor Statistics calculator, which factors in the consumer price index, but that only goes back to n So I used the inflation calculator. I honestly don't know where they pulled

their their figures from. So, but based upon the inflation calculator, that nine dollars would translate into sixty dollars today. So sixty dollars for five minutes of a phone call. So, if you think your cell phone bill is high. Yeah, that's no talk about how I'm almost all the minute. Well those minutes are precious. Look how much they cost back in the eighties. Uh so that was when those patents that we were talking about expired. Yeah, and uh

the day had happened. The columns at Bell System tremble. Then there was a great whaling. Over the next ten years, six thousand independent telephone companies would open across the United States. Now these were legal at this point because the patents no longer gained exclusivity rights to Bell Systems. So you had all these companies that suddenly could operate legally within the United States and offer a competing product or service. Rather,

there are some problems here. So let's say, Lauren, that you and I both live in the same city back in eight and it's a small city that Bell System really hasn't gotten into. But there's this regional company that has introduced a telephone system, and a second regional company that competes and also sets up a telephone system. You become a customer of one of those companies, I become the customer of the other company. And then one night you realize, Hey, I left my notes at work. I

need you to grab them and bring them home. Uh, and you know, can you swing by my place and you try and call me, but you can't because you're on one system and I'm on the other, and there's

no interconnectivity. Right, And this was partially because you know, those those lines might literally not have been connected, and even if they were, you're talking to The way that telephones worked at the time is is you would you would pick it up, and you would get an operator and tell the operator where you want your call to go to operation or would manually switch you through, manually look at a system of switches and figure out the route to get your call to that house or that

other phone, right or as long as the line wasn't engaged, they could try the line, but if it's not on their system, then you couldn't call them. So so there there were speaking of these these numbers of customers, there were some seven hundred thousand customers using these other services

and about a million using Bell. Yeah, so around that so when you think about that six thousand companies and seven hundred thousand customers and then one company and a million customers, that shows you that they were still they were still effectively a monopoly because there was no other single company that could compete with them. So while they weren't, by the letter of the law, a true monopoly as in the only game in town, effectively that's what they were.

And one of the things that happened in was that well, the Pacific Telephone and Telegraph Company, which later became Pacific Telesis, opened the first exchange operated entirely in a language other than English within the United States, operated in Chinatown in San Francisco, and it was all in Chinese. All the customers spoke Chinese, and all the operators spoke Chinese. Eight that's when A. T and T acquired its former rival, Western Union. And I sure probably some people said ha

ha when it happened. So remember Western Union was the company that had they purchased those patents from Bell, this would be a totally different story. There would not have been an A T and T. But instead they had decided to fight against Bell and Bell Systems, and now they became a property of A T and T itself. Um So A T. T acquires the assets of the American Bell Telephone Company, which means that A T and T the subsidiary, now becomes the parent company. Yeah, so

A T and T was now the big company. The student has become the teacher. So eight is when we can say the company of A. T and T really came into being. It was no longer a subsidiary or division. It was it was in charge. So by this time the company's size was pretty big. You know. Keep in mind when it was founded there was one employee. Now there were a million, three two thousand phones in the

system and more than forty five thousand employees. And that same year, researchers independently developed a theory about something called loading coils. The loading coils are a part of technology that was very important in the early days of the telephone system. It actually would reduce the rate at which a traveling telephone signal would weaken, which made it possible to build longer phone lines and build out this long

distance network. Right that That loss of signal is called attenuation, and it right, it's it's a loss of intensity of a signal as it travels through any medium, right Yeah, So this was a huge help and getting around just a practical problem that existed with the technology. So several other advancements would be made later on. We have more to say about the early days of A T and T.

But first let's take another quick break. Al right, So back to A T and T. In nineteen oh four, we start seeing some states began to pass laws requiring the interconnection between phone networks. And it's still a state by state case basis at this point, so it's not like, um, it's not like this is a national movement yet, but it's starting to kind of develop into that. And remember A T and T. There, they were taking a pretty nasty competitive approach. Nasty might be the wrong word, how

about enthusiastic. Yeah, So, but technically this is what everyone had to do. Everyone was building out their networks and not connecting with other networks. A T and T had the most power here because they had the largest number of customers among any single telephone company. So by not playing ball by not allowing connectivity with these other networks.

If you know that A T and T is the big telephone company and that the majority of the people you would want to get in touch with are going to be connected to that company, that's the company you go with, even if there's a regional company that ends

up having a better deal for you financially. If no one you know is on that service then and you can't get a call from another service, right, So just imagine for you cell phone users out there that if you're an a T and T customer, you would be unable to call anyone using Verizon, Sprint, or T Mobile, and the same would be true for each of those companies. No one would be able to call anyone cross company. Then you see how how this becomes a problem. But

this is still in the early days. So we get to nineteen o six, right, Yeah, it was around that time that the head of the Chicago Bell Exchange instituted coin operated telephones to prevent people from freeloading in in shops, you know, drug stores something might have a telephone in them, and since it was still relatively expensive to place calls, this was a way they you know, it was a nickel perk hall and um. By by six, there were nearly forty coin operated telephones in Chicago, And now you

don't see them hardly anywhere. Yeah, I love seeing them in movies these days, because once in a while, like maybe an airport or something, you might see some, but otherwise they're you know, they used to be everywhere heck, I remember where they were everywhere. Oh yeah, yeah, I remember that too. I'm not that young. Was big. That is the year that Theodore Veil became president of A T and T again again, Well, he had technically been

president of Bell I think, yeah, that's true. Previously he was president of Bell and now he's first of the time president of A T and So he was brought back on when the JP Morgan group had gained a majority control of A T and T and said, you know this Veil guy, we like what he has to say. We're going to put him back on the top of the company. Yeah, j P. JP Morgan especially like because he was still alive at the time, and he's specifically

I'm possibly even called up Veil. I think Veil was in South America at the time doing stuff and you know, had been retired, and he convinced him to come out of retirement. Yep. And Veil again started to really laid down the vision of A T and T and started an ad campaign in nineteen o eight, and Veil would really be responsible yet again for setting the vision of A T and T. He' set up a challenge to have a line, a single line stretching from New York

to San Francisco in the next seven years. It's pretty again ambitious, it's very ambitious considering the technology at the time. So en eight he starts to kind of spearhead an ad campaign that set the A, T and T corporate policy. Yeah, that this was this was the other really big important part of his vision, and and it was connected to this a single line concept. Yeah, it was one policy,

one system, universal service. The idea here being that in order to guarantee that you could that every person in America would have access to telephones, you had to essentially take the stance of we're the only game in town, because if there's none of this interconnectivity through different companies, that's the only option you have is you have to have someone come out and become the dominant player so that everyone has access to the phone and can call

anyone else. He also Vail had this very kind of pro monopoly stance of competition is what turns consumers away from brands. It's this this kind of cutthroat thing that happens is bad publicity for everyone. So if you know, just it's kind of that doctor horrible sort of thing like where the world is terrible place, and I just need to rule it. Yeah. Now, it's exactly that kind

of approach. In fact that I had read several things about how the the telegraph companies had entered an era of competition and they all decided they did not like that very much. And so the telephone company was following the same route. They weren't so crazy about competition. And to be fair, this is a case where competition wasn't really helpful to the consumer simply because of that lack

of interconnectivity. It wasn't that you know, the problem with is that without the competition, you don't have the benefit of the consumer being able to choose the right kind of plan or price or whatever. But on the downside is you know, if there's no interconnectivity, then it really gets you stuck. Yeah, and in these early days that was the bigger issue. So, um, some important, very important

thing in the history of the phone industry happens. Well, phones were still new enough that we didn't really have phone etiquette. Yeah, And so Bell would publish a a little Bell Engineer magazine would would sponsor contest for the best essay about the proper telephone etiquette, and they published the best essay um and this was kind of when

the war on hello began. Yeah, so hello was being adopted as the salutation of choice by a lot of people, and phone executives and other people thought that this was a vulgar means of greeting someone on the phone. I have a quote from that winning essay. It is, would you rush into an officer up to the door of a residence and blurt out, Hello, Hello, who am I talking to? No one should open conversations with phrases such as Mr Wood of Carson Sun's wishes to talk with

Mr White without any unnecessary and undignified hello's. Huh. Now. I remember hearing once upon a time an apocryphal tale that the telephone is what gave rise to the word hello, But in fact, the word hello pre dates the telephone by a few decades. I think the earliest written examples date from the eighteen thirties. However, I will say that the telephone gave rise to the popularity of the word hello. And obviously, you know, any any sensible civilized human being

would use ahyhoy uh. There's all ends of other etiquette notes in these manuals that were coming out at the time, one from California instructed speakers to speak directly into the mouthpiece, keeping the mustache out of the opening. Yes, and that would come into play again in the late two thousand's, like the two thousand ten era, when hipsters would come back and the mustache got out of control again. Come on, guys, seriously,

candlebar mustaches are amazing. It's not anyone's one before. So what you're saying is that you had one before it was cool. Uh. T and T becomes a government sanctioned monopoly as the result of an antitrust lawsuit, he said, ignoring her appointedly. It's documented in something that's called the Kingsbury Commitment. So at that time, A T and T divested itself of controlling interest in Western Union, so you

know they had acquired it earlier. Now they divested their control of it and also allowed competing telephone services to connect to the A T and T long distance network. They had to do so with a fee. There was a toll fee every time they would connect to A T and T S line. So that's how A T

and T could gain revenue through this this relationship. A right JP Morgan was still a partial owner of A T and T at the time, and he was fighting with the lawmakers known as trustbusters, who were trying to uh trying to break up A T and T right up until he passed away in this year in ninet and Veil did not continue the fight the way that

Morgan really wanted to. He he chose to dominate through this kind of terrifically sneakily backhanded cooperation with these smaller independent companies, and because it meant that he still made

money from them, a lot of money. Yeah, I mean, you know this, this worked out really well for everyone except the independence because you know, the the arrangement helps allow customers of different telephone companies connect with each other because it mandates that A T and T has to play with everyone's uh so the network interconnectivity is now

no longer a problem. But it gave A T and T permission to function like a national utility, and and it would dominate the telephone market until ninety uh And some would argue, well beyond that, Well, yeah, well it's certainly into the eighties two, you could argue, and so so right, So, if independent companies wanted to use the widespread bell system. They had to agree to use Bell's equipment, they had to adhere to their standards, and they had to again pay fees. So if you use of those wires.

If you're thinking that this antitrust story sounds familiar, it will get increasingly familiar as this series goes on. Yes, one competitor wrote that that this entire ordeal was like trying to fight an octopus, which I just think is terrifically like, I want that steampunk comic book about that.

I'm moving on into nineteen fourteen, we see another technological development, the three element vacuum tube, which was an amplifier that enabled the first transcontinental line to exist, which didn't exist yet, it hadn't been laid down yet, but this technology is what made it possible. All right, This is an important

advancement because of that aforementioned attenuation. And you know, unless people could come up with a better material than copper to transmit a signal with, or or a way to amp amplify the signal, it just wasn't going to work. And Dr leed to Forrest created this audion uh three element vacuum tube, and it would be really big, and lots of other industries that enabled the development of radio, radar, television, and computers right up until transistors became a thing in

the nineteen sixties. Yeah. Yeah, you have to go all the way. Remember that the first transistor isn't even invented in the prototype stage until the late forties. So from this point until the late forties, just in the in the lab, not not let alone out in the real world.

This is this is the best the technology could offer us at the time, right, Yeah, I think nineteen sixties was a number that was incorrect listening to Jonathan Well, by the nineteen sixties it was certainly common, and the fifties it wasn't common because they still had they still had to refine the design. Certainly, the first transistor looks terrible.

That's very generous. Um. And meanwhile, via eighteen ties manufacturing subsidiary that we have previously mentioned, Western Electric Company International affiliates were starting to sell equipment around Europe, South America and also in Japan and Australia. Yeah. Yeah, we could not call them yet, but that would that would change shortly,

relatively speaking. January fifteen, that's when the first long distance call is between Alexander Graham Bell in New York and Thomas Watson all the way in San Francisco Thomas Watson. So this was this is that promise about getting that that long distance connection all the way from coast to coast in the United States. It also had two other connections on that one call. There was the President of the United States who was in Washington, d C. And Thomas Vale, who at the time was in Jekyl Island,

Georgia's there. I've been there as well, so yeah, it's kind of interesting. I think I've even seen a historic plaque that referenced this. But then again, I have a feeling that Jackyl Island must be the place where they make those historic plaques because they are everywhere. So the cost for those first three minutes of phone time on a typical long distance call between New York and San

Francisco is twenty dollars and seventy cents in nineteen fifteen dollars. Now, in this one, I used the Bureau of Labor Statistics because that was late enough for me to do that. That's based on the consumer Price Index, so that's the general price of goods and services in one year versus another year. So based on that twenty and seventy cents is about four hundred seventy nine dollars. So that's how much it would cost you for three minutes of phone

time on a call between New York and San Francisco. Yikes. Uh So nineteen sixteen was the first year that they started testing phone service to Europe. It would not work for another little bit. Yeah, and so this phone service, you might think, oh, did they lay a really long cable. No, the early phone service that would become the Transatlantic phone service was based on radio waves, not on a physical cable. Nineteen seventeen, that's the beginning of the US involvement in

World War One. Employees start to volunteer for service during World War One, and A T and T develops the first air to ground ground to air radio communications systems. And that was also in the U S. Government took control of a nation's telephone services. They would not give it back to its proprietary owners until nineteen nineteen. Yeah, it was considered a wartime resource. So getting to nineteen nineteen, that's when Bell System first dial telephones. There they are

released in Norfolk, Virginia. And so before this, like we said before, you would pick up a phone, and you would speak to an operator who would make the physical switching to let you complete your call. The dialing, of course, is more what we're familiar with today, unless we've all just used the automated settings on our smartphones and don't

even remember how to dial anymore. But in general, it's where you type in the series, or in this case they were rotary phones, you would dial literal around the dial. Did you ever use a rotary phone? Okay? Just checking. That was also the year that Vale retired for the second time. He would he would die the following year. So in nineteen twenty one, the United States government passed the Willis Graham Act, which removed antitrust restrictions to the

telephone industry. So it's essentially saying open game for for a T and T and would acquire over two hundred and seven thousand telephones worth of exchanges within the next six years after this was passed. It was really again to help facilitate that interconnected network of telephone systems, so this is continuing the work that was done back in nineteen um and it was also so that the United States wouldn't be played with hundreds of networks that had

no inner connectivity. But it also meant that it gave A. T and T the ability to really cubment itself as a monopoly in the United States. So nineteen twenty two was a big year for multiple reasons, and that's the year we're gonna end this first episode on A T and T launched the w e a F radio station in New York, which was the very first radio station to broadcast a commercial. It's also the very first radio station to broadcast a college football game. Princeton beat University

of Chicago. On August two, nineteen twenty two, Alexander Graham Bell died and on August four, nineteen twenty two, during Alexander Graham Bell's funeral, all telephone service was suspended for a full minute in memory of Bell. So you know you're important when an entire country's communication system shuts down. Yeah. So that's a pretty powerful stuff. That wraps up the A T and T story. Part one originally published on

November four, two thousand thirteen. We will be back next week to continue this with Part two, and until then, if you guys have any suggestions for future topics I should cover on tech stuff, send me a message via Twitter. The handle is tech stuff h W and I'll talk to you again really soon. Y text Stuff is an I Heart Radio production. For more podcasts from I Heart Radio, visit the i heart Radio app, Apple Podcasts, or wherever you listen to your favorite shows.