TechStuff Classic: The AT&T Story - Part Three

on November eleventh, two thousand thirteen. If you have not listened to parts one and two, those published the previous two fridays, so you can check those out, and let's

check back in with two thousand thirteen tech Stuff. The deal was that A T. T Was getting out the local telephone business and concentrating solely on on providing service for a long distance as well as getting into the burgeoning computer industry, right, which would be very important or will be very important for this current episode that we are about to embark ponds. This is uh. I titled this in my notes as part three, getting to the bit that we're in now because I'm great at titles.

So that brings us up to three. When A T. T opens the first commercial cellular telephone system in the telephone system. That was an interesting embossis on that salable in the United States in Chicago under Ameritech, which was soon to be divested from A T and T according to those rules that we talked about laid down in the nine settlement of the antitrust lawsuit. But at that time in Merritech was still under A T and T because again, it takes time to actually act upon these

these judgments. So here we have the first cellular telephone system for commercial use, and uh yeah, the cellular approach was uh something that really made mobile telephones possible because if you remember from our last episode, A T and T had created mobile phones, but they would connect to a specific radio antenna and you had to be within range to use it, and if you moved out of change,

that was it. Your call would just end. Um. Cellular telephones had a bunch of towers that will allow you to move within an out of range of various towers. There's kind of a handshake and electrying to handshake involved where you would continue to get service even as you moved out of one tower's operating area into another. And all of this technology was thanks to advancements that came out of a T and T Labs. Basically the it's it's that that handshake that Jonathan is is talking about.

You know, let's let's the cells automatically transfer call from one tower to the next as as a caller moves through them. And Yep, that came out of what was formerly or I guess currently at that very moment, still Bell Labs, but would very soon become a T and T Labs. Yeah. So it's um one of those one of those crazy developments that gives us the ability to

use technology the way we do today. Just imagine if we had not come up with that, if a T and T and not come up with it, let's say that, you know, it had been delayed several years, we'd be in a very different world right now. So it was pretty amazing stuff that that same year, a researcher at A T and T named Beyond strew Strip, which I'm sure I mispronounced his name term. I did not look it up. I didn't even write his name in my notes because I was unwilling to try to pronounce it.

He debuted C plus plus. Yeah, yeah it was. It was so much better than C. It got two pluses. But yeah, C plus plus is an object oriented programming language that came out of the Bell Labs development laboratory. So that's a little more redundant. In January one four, it's early, y'all. So in January one, that's when Bell system ceases to be Yes, this is the official end of everything that that needed to end according to those

agreements from right. So now we've gotten the boy where A T and T is divested of those other companies

and is its own entity. Uh. It retains long distance operations as well as the R and D labs and manufacturing, so all of that belongs under the umbrella of A T and T. And then all that local services handled by those seven divested regional and that year will access carrier selection begins, which is a ruling by the FCC said that all telephone customers should be given a choice as to which long distance company they would use when

dialing long distance numbers. So, uh that you know, now, the regional operating companies, even though they used to be part of A T and T, could not give a T and T preferential treatment. They could not say, this is the company that you have to use if you're going to make long distance they had to give you open access to all competitors. So A T and T at that time also begins to lower long distance rates.

Um and they said that. They said that it was improvements in their infrastructure that lowered costs and that allowed them to lower the rates. Really, what I think was happening was that because they had I mean, A T. T went from having nearly fifty billion in assets before the breakup to thirty four billion after after this mob Bel to Baby Bell breakup, which is a seventy s drop an asset value, which is pretty alarming when you're

a giant company. Um and so, so competitors at the time, like Sprint and m c I were pricing to undersell A T and T pretty seriously. You guys might remember some of the commercials that were coming out around that time of just the crazy backbiting price war stuff that was going on. And remember, you know, m c I was the company that had led the charge against A T and T back in the seventies that eventually evolved

into that antitrust lawsuit. So this is you know, A T. T said that it's because of improvements and service, but in reality, I think we can say that This was so that they could remain competitive now that it was more of a level playing ground in the long distance space, and if they didn't lower their prices then they had a real risk of losing their customers. The you know, these these two competitors and and others as well, would would take huge gnawing bites out of A T and

T over the next several years. But um but a T nonetheless would see a six increase in long distance calling between now and now being over the next fifteen years. So you know, long distance was still a very major thing because wireless didn't exist. We then really moved on to a post long distance world. I can't remember the last time I was charged for a long distance call that wasn't, say, an international call. It was about two thousand one for me. Wow, So did everyone just move

near you? Or was that when things changed? That's when I got a cell phone? Oh? Got you? All right? Yeah, that's about when I did too, I'm sure, I think maybe a little earlier. It's hard for me to remember years ago by so quickly. Alright, So between four and nothing happened. Actually, I just didn't find anything that I thought was stuff happened. I just didn't find anything I found particularly noteworthy to add in my notes. Me neither,

So let's go to excellent. That's when A T and T lays down the tapped eight, the T A T eight, which was another transatlantic telephone cable. This one made a fiber optics Yeah, so across the Atlantic obviously, and could carry ten times the number of calls the earlier copper cable could handle. Now remember the originally we were talking about, you know, copper cable able to handle thirty or forty calls at most. The earliest one is only able to

handle one time. By this time, so you think, oh, ten times the number, why is it like so it's a hundred calls. No, by this time they had improved the technology significantly. We're talking forty thousand simultaneous calls. So when all of your buddies want to call all of uh, you know, each other across the pond. This is what makes it possible without getting a signal saying sorry, all

lines are busy. Uh in T Labs began working on h D t v UM, specifically on the kind of high speed signal processing problems that arise when a computer needs to you know, receive de code and display a large amount of data in real time. But this is pretty impressive for those of you who are HDTV enthusiasts. Here in the United States, HDTV had a fairly late start.

It got earlier start in Japan, uh and it took a while for there to be an agreed upon set of standards guiding HDTV because obviously you need to be able to have all the different players involved working on those same set standards. The delivery of the quality of the signal needs to be correct. The manufacturers need to be working on a similar approach. So this was very early on. Then A T and T was looking at this is saying, this is going to be a thing.

It's not a thing now, It's probably not gonna be a thing for maybe ten years, but we need to work on it now. It would also turn out to be pretty forward thinking for them, because they would wind up getting pretty seriously into the cable industry in just another few years. Right forward thinking man. For some reason, I love that phrase. Bell Labs also was working at that time on a speech actuated manipulator also known as SAM oh. Right, yeah, and that that would that would

become kind of important another couple of years as well. Yeah, it's kind of neat. This was like an early pre to trying to create a robot that could respond to natural language commands, so things like turn left or lower your arm, that kind of thing. Uh, And it was just really the early days sort of a proof of concept to create robots that could do. This also meant that they were working very hard on improving just natural

language recognition, which is that's incredibly difficult. It's hard to teach a computer that, you know, we can say the same command a hundred different ways. For the computer to be able to interpret all one hundred of those variations as a single command and differentiate it from every other command is phenomenal. Yeah, especially in English, which is pretty

messy in really wonderful ways. When we start adding an idiom that's really like wave it around like you just don't care that robot is going to have some trouble. First of all, it doesn't care. Robots don't care. They don't that robot to pretend to care. Yeah, that's about as good as we can get. I mean it's yeah, I've known some people that way too, So I'm not

going to speak down to romost too much. Um. Now moving on to nine one, that's when A T and T acquired in CR Corporation, which is a computer manufacturing company. I think with this they were really hoping to start hopping that that software hardware divide or or I guess it's the networking hardware divide more so they again we're looking forward to too yeah, to really get in that because I mean that that was one of the things that they were allowed to do now after that nineteen

two judgment. Uh, and this was kind of a real serious move into that space. UM. In two, they unveiled the Voice English Spanish Translator or VEST, which was first developed back in nine but it was first unveiled in ninety two, so they're still working on those improvements to voice technology. He could recognize about four hundred fifty words

and around a billion different combinations. And the way it would work is that you would speak into the microphone the saw off where would first attempt to identify what language you are speaking, either English or Spanish. At that point, when it had identified the language, it would then translate what you were saying into the other language, so English

Spanish or Spanish to English via text. What it would do is break down your sentences into little basic component parts and then translate those component parts, which anyone who has done any translation knows is not a you know, full proof way of translating, because sometimes if you break, can involve multiple parts of a sentence. Again, especially in English where your ward order is not perhaps as structured

as it might be in other languages. I mean, I would love to see this in action, just because it again is tackling one of those fundamentally difficult problems for human computer interaction. A T and T merged with maccaw Cellular Communications Incorporated, which at that time was the largest provider of cellular service in the United States. So that acquisition eventually means the the entity that was McCaw Cellular Communications becomes A T T Wireless along with another company

will mention in a bit. But that same year A ten T also introduced the Model seventy video phone. Yeah, that was kind of a video teleconferencing hardware. And you know that they had had such rousing lack of success with their picture phone that that but but but they realized that people were more willing to do this a and an work environment and be on a computer than

they were on a phone. Yeah, so this was allowing simultaneous video transmission, so that it kind of predecessor to the video software we used today for things like Skype or other Google hangouts, those kind of video hangout things. It also would allow some limited use of letting, like the person who's calling you manipulate files so you can open the files within it and have so it's kind of like a video conferencing system very early on. So

pretty impressive considering. Yeah, I mean, you know, that's we're still talking like this is still the very early days of the World Wide Web. Keep in mind out that that really hadn't even launched till nine two. So seeing some video communication stuff in ninety three was exciting. You know, I can remember the first time I ever saw any kind of video communication. I remember exactly what I was doing.

What what were you doing? I was at the Experimental Prototype Community of Tomorrow or EPCUT as it is called now, it's no longer known as its full name. So they used to have these consoles mounted on columns where you could walk up to the consoles. Yeah, hellttle touchscreen interface. You press a button and then you would get greeted by a cast member who would ask what what you needed, and you could ask them anything that had to do with the parks. Eventually you could do things like even

make uh dining reservations. That way, you could say I would like to eat at Mexico at noon, and they would they would make that Mexico being the pavilion in the World Showcase. It wouldn't actually to me now we still don't have that technology. I'm waiting on it. I wouldn't. I wouldn't put it past Disney to just have that

in the back pocket. But yeah, but it must have been right around this same time, all right, right in the early nineties, right, speaking of names no longer meaning that long drawn out thing that they used to mean in that's when A T. T legally changed their name from the American Telephone and Telegraph Corporation to just a T.

T corp Or corporation. I mean the corporation stays the same, yeah, but it was just a T and T. So now it's as telegraphs were no longer a thing, kind of like when you look at certain names that used to mean one thing, now it's just the initials. So you might ask, like, what does AMC mean? And it used to me in American movie classics. Now it's just a m C. That's just the name, so same sort of thing. So moving up to that's when A T and T

restructures into three separate companies. So one of them is a T and T. That's the services company. It's the one that we all know and are familiar with. The second one becomes Lucent Technologies. Now that is a products and systems company. Ah, it's really kind of a manufacturing company for certain types of electronics. And the third is a computer company that returns to the NCR name. You know, they purchased NCR just a few years earlier and loosen NCR.

Eventually both spin off as their own companies. Uh the following year. In fact, we got a little bit more we want to say about the following year. But before we do that, 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 the selection of acclaimed movies on your television or on the go with your smartphone or tablet, and it

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so it's back to nine six. That's when the Telecommunications Act of nine becomes law. You know, I was going to make a joke about how they wanted to call the Telecommunications Act of nine the Telecommunications Act of but it published in nineteen nine, and they thought I would confuse everyone. But then I realized I made that joke in the last episode. Well good, I'm glad that you're growing as a host. Thanks. Yeah, it doesn't stop me

from making jokes. It just it just it just prompts me to explain why I'm making the same joke twice. I know, I'm I'm lame. It's okay, I've dealt with it. Okay. So this so this Act was an FCC attempt to to regulate the industry to promote greater competition. Right, yeah, again it was Yeah, because again it was it was a growing industry. This is another example of how technology

evolves faster than the legal system can necessarily handle. So we get these big leaps in technology relatively speaking, and then the legal system says, you know, this has outgrown the parameters for what we had envisioned because the technology can do more than what we what it used to be able to. Right. Previously, you know, cable and telephones and data had all been very separate, and this brought

them all under one umbrella. Right, So similar to how we see cable companies that do both the transmission of data and they provide some of that data as in they create content that would also become you know, another challenge that they were still struggling with today because you know, it's it's getting very messy. If one person owns all the roads but allows everybody to play on those roads,

net neutrality is maintained and everyone's happy. But if everyone owns all the roads and also owns a lot of the buses they go on those roads and then decides to let those buses get the express lane and everyone else gets the slow lane, that's when you start getting the problems. So the Telecommunications Act was sort of a predecessor to some of the Acts and some of the

proposed legislation that would follow to try and maintain net neutrality. Um. And of course that's, like I said, that's a battle that's still ongoing to this day. Absolutely. That's when A T and T signs a merger agreement with t c I, which was a cable company. Yeah. They were also working at the time on converting their entire network from analog

to digital data delivery. So yeah, in nine if you remember from our last podcast, this is actually when that final electro mechanical switch was switched over to computer I switch. I bet there was a big ceremony. I hope that electro mechanical switches enjoying retirement. But A T. T also went back to the consumer local telephone business because it

introduced a residential service in New York. So first time A T and T gets into the local telephone service since it had divested itself of those regional bell companies back in two write Um. They also completed that merger with t c I and started looking to acquire a second cable company called Media one. Yeah, they're really serious about now. And they also rolled out the largest DSL initiative in the industry for broadband customers. I was never

a DSL customer. I was always a cable modem customer, but I've got a lot of friends who used DSL for both voice and data, and yeah, that was that

was a big deal back then. Oh sure. Well, at the time, long distance revenue was decreasing for a T and T at a rate about twenty each year due to these these changes in the way that the world was working, in the way that people were accessing information and telecommunications, and uh so, you know, they were although they were working and they had spent some hundred billion dollars on acquiring these cable TV companies, they were still pretty dependent on long distance as as a profit, and

so they were kind of they were kind of scared. Yeah, they had to look at other means of generating revenue because with the the threat to long distance looming and getting getting worse each year, they knew that if they were to have any viability as a as a any type of company, let alone a major, enormous company, they

had to get into new types of business. And so, as you know, terror is a great motivator, as it turns out, and they they really doubled down on the broadband approach and it ended up paying off big time. Also in that year in T and D started research into something one of my favorite subjects because it's so crazy and wonky, quantum computing. Yeah, so there's been all

over a T T Labs looking into quantum computers. Um. We've mentioned quantum computers in earlier episodes of tech Stuff, but just to let you guys know, they're crazy, y'all. So your basic computer relies on binary uh computer language, which are zeros and ones. Your quantum computer relies on those are also known as bits. The quantum computer relies on cubits. Now a cubit theoretically um, actually, I guess really, because there have been quantum computers built, they just don't

last very long. A cubit can act in superposition, meaning that it's both zero and one and all values in between at the same time simultaneously. Jonathan from breaking in to say, we will be back to talk more about a T T in a moment, but first let's take a quick break. So theoretically you can use a significantly powerful quantum computer, and has to have a certain number

of cubits for this to be viable. But you can use a powerful quantum computer to solve certain types of problems much more quickly than you would with a classical computer. Not all problems would be great in a quantum computer, but if it's a problem, for example, trying to figure out which two enormous prime numbers were multiplied together to get this particular product, a quantum computer can do that way faster than a classical computer. Classical computer might take

hundreds of years to solve a particularly difficult problem. A quantum computer might do it in a in an hour. And it's all because it's able to solve I'm oversimplifying, but it's able to solve multiple versions of the problem all at the same time, and then assigned probabilities to which one is the correct answer. So A T and T was looking into that as early as so two thousand. Uh lall right, well, now they've got the acquisitions of T c I and Media One, which makes A T

n T the largest cable company in the United States. Um, the service is called a T and T Broadband, and a T and T itself reorganizes again into three major companies. So you've got a T and T, a T and T wireless, and a T n T Broadband. And uh that's also the year when data traffic overtakes voice traffic on the A T and T network for the first time. UM. Not surprising, but I'm sure now there's way more data

than voice. Has to be overwhelming at this point. Even though these these acquisitions of TC and Media one were really terrific for A T and T and moving them in in a direction that the company thought was going to be really great, that they spent over a hundred billion on those acquisitions, and they had kind of gone

into debt in order to do so. Um. You know, the company was in a little bit of trouble and they were hoping by by separating out into these three separate services that they were going to be able to isolate that debt and also you know, hopefully raised some funds on the stock market, which the folks running the stock market kind of picked up on. They sort of saw through this clever plan and um, and the company would wind up losing another hundred billion of market value

over the next couple of years. UM. So, so the company was not doing I mean, it was moving in interesting ways, and I think that you know, doing clever stuff, right. But in the long term, the moves they made were good choices, but in the short term, it meant that they suffered quite a bit because you know, we were We've talked about how a T and T it was

built on the foundation of long distance telephone service. When that stops becoming a way of generating significant revenue, it doesn't necessarily matter if your company has diversified, if everyone still identifies your company as being a long long distance service provider. Right. Also, you know, up until that point, they had been they had been depending on long distance profits to drive the company. But but long distance was

losing revenue um at a rate of each year. Yes, so it was obvious that they had to start really investigating other opportunities. So this broadband opportunity was a chance for them to kind of really shift major gears in what their company is all about and remain a viable company because I mean, you know, fear is a great motivator. As it turns out, if you're scared, then you you're

willing to try some some pretty uh, pretty radical things. Yeah, and in this case, they really went in broadband, and it turns out that it wasn't you know, it wasn't a bad idea. In fact, two thousand also was the year when a T and T saw more data traffic than voice traffic on their network. It was the first

time that had ever happened. I wouldn't be surprised if that is, you know, obviously multiplied many times now because look at the enormous amount of data that transfers through whether and your calls aren't usually taking up quite as much as like YouTube video and you've got you've got file transfers. I mean that that takes up a lot of space. So I'm sure that that might have even been the last year that they saw, you know, or maybe the last year they saw voice traffic being greater

than data traffic. Would not be surprised. Two thousand one, however, that's when a T and T Wireless becomes an independent company. It spends off from a T and T. Uh, it's a it's initial public offering, which you know is is stock market terms for for going public and selling shares. It's like a Debutan ball for stock like that. It was the largest i PO in American history at the time. Yeah, yeah,

big deal. And also that was the year when Comcast offered to acquire A T and T broadband, and a T and T said, you know what, we will accept your kind office sir, thank you. UM, all all of this hullabaloo over over, you know, kind of diverse jing and trying to split stuff up and manage their debt didn't prevent innovation. Later that year, their customer service system,

how may I help you? Debuted and more natural language more natural language stuff, which I think is probably the point that they were trying to come to with all of these previous natural language related I mean, maybe not the specific point, but they were like, hey, you know what would be really useful for this, um it was an excellent application service. So the idea is that when you call in, you get a automated response. So it's not an actual quote, real human being on the other end,

uh end quote. It's rather a kind of robot. But they try and have as realistic a synthetic voice as possible, and the goal is to allow the customer to use whatever language that he or she needs to express the problem they're having, and then it can respond to that.

So instead of having you wait through a menu where you know, for telephone service, press one, for a cable press two, you know that kind of thing, you would just say, you can hypothetically talk to the robot, and I could just be things like, uh, you know, when I call usually it's early in the morning, so there's things like cable down fixed now fire bad. Personally, I kind of missed the days when I could just punch buttons and not have to pretend to talk to a robot.

I sort of get angry when I talked to robots. I wind up yelling at them. The fact that we're able to get Lauren and in front of a microphone at all is a miracle. Every week, uh mostly involves applying her with chocolate. Are you suggesting that you are a robot? Oh? Yeah? And so the company also launched

Natural Voices, which is that synthesized voice program. So it was a combination of the natural language recognition software and this new synthesized human voice that was meant to be as close to a natural voice as possible, so it doesn't sound like you're speaking to a robot or someone who puts the wrong embossis on the wrong salabl um. I don't know if you've ever had one of those calls where it's like, hello, thank you for calling service,

you know, Tuesday. Yeah, it's just weird. So, you know, getting that to be more natural obviously creates a better customer experience for most people, I would say, of course, they were also around that time working on a bunch of greater, greater network related issues. In two thousand two, they rolled out yeah new optical network which was the idea of the optical network was to decrease the problems that would arise in the event of a natural disaster

or a massive failure. So it's kind of a response emergency response for an infrastructure, meaning that if there were say a hurricane hitting the Eastern Cboard and the phone lines went down, this would help them respond faster to get that repaired and return service, which is obviously important for any kind of emergency situation, so very important, and then work. They also worked to branch out as an

enterprise networking company. Before they had really been marketing their their electronics and computer services is to the average consumer. Now that we're thinking, you know, there's huge market in the enterprise world where we can we can market directly to other large companies and say let us handle these systems for you. We know what we're doing, we're experts in this field, and give us money. The end of

that sentence. But yeah. Two thousand three, Uh, they rolled out the voice Tone product, which allowed customers to speak with computers using natural language, so very similar to them may I help you, But this time this was a product that you could get if you were an enterprise, for example, and you needed to have that same sort of capability. So something that have been developed for in house a T and T use or at least within

their customer service department. Yeah, it's an actual product. Always a good idea if you are able to create a you know, a usable system for that that's modular that other people can use in their own networks. Uh. Two thousand four, they introduced voice over Internet Protocol or for customers. This obviously is allowing you to make voice phone calls over Internet protocol. So it's using that same packet switching kind of software that uh, your regular Internet traffic uses,

but for voice trend uh voice communication. UM. I had friends who had voipe call like telephones voice telephones, which were the idea was that, you know, using the data service was sometimes a cheaper alternative to using voice service

like regular voice lines. The there are, or at least there were some drawbacks with voipe phones, especially early days involved like if you were to dial in nine, Uh, it wouldn't necessarily know a route that call to the closest center because yeah, because it would be over Internet protocol. Not Yeah, I might make a call to the server.

Might I might make a call in Atlanta and get Tucson, which is terribly helpful if my house is on fire, unless my house happens to be in Tucson, in which case I don't know why I'm in Atlanta making that call. Come me neither. Yeah, you know, you know, stranger things. Um. Also, in two thousand four, a company acquired a ten T wireless that would be Singular, which was owned by a little company called SBC, which is going to become extremely

important in the next year. Yeah, yeah, why don't we just go ahead to two thousand five, So SBC, alright, SBC. Now this is one of those companies again that had named itself after its initials, So originally SBC stood for something not just not just those letters, right, Yeah, that would be Southwestern Bell Company a K. It was one of the baby bells that split off way back in two It started out as the smallest baby bell but um but under the lead of a man named Ed

Whittaker who had been working for Southwestern Bell all his life. Um, through through a whole lot of very savvy mechinations of his is to bring the company into all of this data in cable and et cetera stuff that A T and T was was trying to some very wise acquisitions and some very wise other Baby Bell acquisitions. Meeting, they become the largest baby Bell. Yeah, that decision that was handed down to divest A T and T of all these properties. Uh you know, the intent was to try

and break up these monopolies. SBC had been growing year over year and acquiring some of those Bell operating carriers. Uh So, the while it avoided a monopoly with A T and T at that moment, it kind of ended up sort of creating at least, if not a monopoly, a mega company in SPC. And then in two thousand five, SBC, you know, plays the trump card by acquiring A T and T. So the the sub company has now become the parent company, although they then chose to change their

name to A T and T. Right. Um, and this was only a sixteen billion dollar transaction. And I mean I feel very silly saying only next to sixteen billion, but considering what A T and T had been worth in the past, that was a pittance. I mean this, this was an indicator of how poorly the company was doing at the time. By the way, if you feel that I am worth only sixteen billion, I'll take it right now and do whatever podcast or not do whatever podcast you want me to, all right, So that's that's

in fact, you know what I'm generous. You get two for one eight billion apiece. All right. So one of A T and T s former regional carriers acquired A T and T. That's the story here. It reunites those companies. So now we've got long distance and regional reunited formally, Keeping mind, A T. T had already gotten into regional calls again starting with that New York market, and uh SBC is now A T and T Incorporated, and the

company owns around eleven of the twenty four Bell system companies. Now, keep in mind, those regional operating carriers were of representative of larger buckets of companies, so twenty four total out of the you know that fell within the seven regional ones. A T T now has eleven of those twenty four backs. So it's not as big as it was before the judgment was handed down in that case. But it's it's big. It's big again. It's it actually kind of amazes me.

I didn't come across anything. I didn't really dig deep enough, I think, but I didn't come across any news items about whether or not there was there were any alarms raised over the fact that SBC, a former you know, part of A T and T, was now going to acquire A T and T and therefore partially negate this judgment. I didn't see anything, but then I would imagine there had to have been some I imagine that they had their eye on the situation, and I mean they can't

not have. I mean, the federal government is all up in a T T. S fries. Yeah, yeah, and especially recently. I mean it it's but it's kind of funny because we've had the story multiple times. We've done three podcasts about A T and T. And the story of A T T getting really big in the government stepping in and saying, hey, let's take a look at this, guys, has happened several times already. Uh don't know when we're gonna learn that lesson, I guess Anyway, let's let's move

on to two thousand seven. Well, okay, what one more important point for two thou five, which is going to lead directly into two thousand and seven, is that around this time, Steve Jobs began working with Singular, which again um was part of SBC, to develop the iPhone and features specifically for it, right and then, And that that agreement included a five year exclusivity agreement, meaning that Singular would be the only carrier to carry the iPhone for

five years, right and uh. In addition to that, like roughly ten percent of iPhone sales and stores a slice of Apple's iTunes revenue um and this was all for

the development money that Singular Labs was providing. And also um for a for a new a new feature you're called visual Voicemail, which would become the consternation of many human people several years later, um and uh, and and revenue sharing agreement that would work out to about ten bucks a month for every iPhone customers a T and T or Singular at that time, bill Right, So then SPC acquires a T and T SBC becomes a T and T Incorporated, which means that the dealer becomes a

T and T essentially again. So that means that the iPhone in two thousand seven, when it premiers and blows everybody away, Steve Jobs up there on that stage and showing off this gorgeous device that everyone didn't know they needed, and now we're convinced that absolutely they needed this right now. Gosh darn it would go exclusively in the United States to a T and T, which was a huge boon

for them. I mean that it was you know, it's hard to really put into into words how influential the iPhone has been, because even if you don't own an iPhone, if you want a smartphone, the iPhone has influenced that design obviously. I mean a lot of the design elements that you see, while they may not be a you know, you might not say, oh they copied Apple. Maybe they went very much out of the way to not copy Apple, but that means that the Apple influenced them. So it's

pretty amazing stuff. And of course, I mean, I remember the craze that went out when the iPhone came out. Me I was like, I'm gonna wait a few more months because Android's coming, and uh, and so I did. I waited it out and got myself an Android phone. My wife has an iPhone and we fight. That's a

different podcast. UM two seven was also the year that announced that that wireless services were going to be the main focus of the company, And I mean that was kind of obvious following their huge investment of the indianaphone.

In hindsight, we can definitely say it's obvious, but keep in mind that before the iPhone, and while wireless was definitely becoming important because everyone was adopting cell phones, smartphones had not really taken off in the United States and the consumer market at all, and no one could have predicted how big they would become so shortly, right, so that that was a very wise kind of move on

their part. You know, some people might say it was a little late on their part, but I think considering that there was no way of knowing at that time what was going to happen, it was it was the right move. And and you know, they would spend seventy billion on acquiring Spectrum and on building out wireless networks in the next three years alone, so they were pretty

serious about it. Yeah, although if you lived in New York or San Francisco, you had a lot to say about that A T and T service in those early days on the iPhone. I don't live there, but since we work in technology and a lot of our peers work in San Francisco and New York, we were bombarded

with complaints. Heard heard a bunch about that one. Um. Also in two thousand and seven, as a side note, at At At Whittaker announced his retirement from A T and T. He would go on to basically turn General General Motor

Company around from its bankruptcy in two thousand nine. I always find it very admirable to see people who are just incredible leaders move on from one position to another, not even necessarily for for profit, but because they like the challenge of taking a company that's struggling perhaps or maybe just not performing up to expectations and really turning

it around. I always find those stories interesting, especially I kind of I kind of want to look more into into this, into this dude, because he was you know, he started as an industrial engineer and and worked in engineering before he moved all the way up through the company to become its as CEO. That's also a phenomenal story because what we oo could and we hear all those stories about people who just come out of business schools and go into leadership roles without having actually worked

in the rank and file of various companies. It's always fun to have. Maybe we'll put that analyticer down as a potential person to cover in a future episode. We're in the home stretch, about to finish out our three partner on A T and T. But first let's take another quick break. Alright, So two thousand seven, we've got that A T and T with the iPhone. They have the exclusivity deal, which would not last uh five years. It wouldn't be two thousand twelve before the iPhone was

available on other carriers in the United States. It would actually be two thousand eleven. Do you have anything between twenty Alright, So nothing happened in two thousand eight nine or universe ceased to exist briefly. We all just took a break, you know, we're all you know, they're watching television or something. Two thousand eleven rolls around at A T and t s exclusive hold in the iPhone in the United States ends, uh, And also a T and T makes a move to acquire a rival cellular company,

T Mobile. Yeah, and that one, in fact, would get the strong attention of the f c C. Yeah, and the Department of Justice, as it turns out, and so so I remember hearing about that, and immediately my response was please, no, no, no, no, never. Why But as a T and T and T mobile, While you know, A T T is the second largest cellular service company in the United States, the first being Verizon, the third

is Sprint, and the fourth is T Mobile. Now, a T and T and T Mobile both work on the same general technology for cellular service, whereas Verizon and Sprint work on the other one. So the one that a T and T and T mobile uses is the one that most of the world uses. And I thought, well, that means that while it looks like your choice is only going down from from one and four to one and three for the major carriers, keep in mind they're

smaller carriers in the US. When the major carriers, your choices go down from one and four to one and three. In effect, it really meant that if you wanted that particular type of technology where you could theoretically be able to use your phone in other parts of the world depending on how your plan worked that out, Um, you only had one choice if A T and T were to acquire T Mobile at least one major choice that had a lot of support in the United States. So

I was very much against it. I was not the only one. There were lots of people that were just leading the charge against this potential merger. A T and T and T Mobile would meet with the United States government multiple times to kind of give testimony as to

why they thought this was a great idea. A T and T claimed that this would create thousands of new jobs, whereas the company, the organizations and parts of the government that were opposed to this said exactly the opposite that it was going to end up eliminating jobs, um particularly in various regions of the United States where they had major operating centers that they were afraid would shut down as a result of this this merger. So yeah, it

was a big deal. The approximately thirty nine billion dollar deal. UH Sprint launched a project called No Takeover so Sprint Sprints like, you know, guys, I know we're not directly involved in this merger, but we would be directly affected by it. So that's why they launched a campaign to raise awareness and to to get some more traction against the move, and the U s Department of Justice and

the FCC opposed the deal. A T and T would eventually withdraw the deal right around the end of twenty eleven the beginning of and the Department of Justice actually said, we feel the combination of A T and T and T Mobile would result in tens of millions of consumers facing higher prices, fewer choices, and low quality products for wireless services, which, uh, I think in the tech bis we call a sick burn. Uh. Yeah, So the merger

does not go through, it it falls through. Now this was a big deal because we also were talking about T Mobile's parent company in dire financial straits and so, but T Mobile was operating independently pretty much already at that point anyway. It was just a question of who was going to buy it up or was it going to just continue to be um, you know, sort of a self sustaining entity. In two thousand and twelve, H A T. T gets sued again by the United States

Department of Justice. The Department of Justice alleged that the carrier intentionally neglected to authenticate users of the IP relay service. That's a tool that was used by or it is used by people who have hearing impairment. Uh. The way it works as they can type in messages and a communications assistant reads the message out loud to a caller. So it's kind of a you know, it's a service so that someone who might be deaf or unable to communicate in a way that that most people could understand

could contact a middle person who would relay the information. Well, the problem with this approach was that scammers were starting to use it as a means of getting getting around um write laws that that would prevent them, like they would end up like let's say you've heard, of course

of the Nigerian scam. The idea of this person who is has shares your last name but does not have a direct relation to you, has died and there's all this money that I want to get out of the country and just for a small cut of the money, I will let you have the lion's share of it. I just need to transfer it, but but put forth a little bit first. Yeah, so that I can I

can do the thing. It's all scam, right. So it turns out scammers were using the the IP relay service to try and target people, and so the f c c UH and the d o J both had kind of what A. T. T said, we're conflicting um directives because the f c C said, if you're a carrier, you have to support this service because otherwise you are

not servicing the hearing impaired community. The Department of Justice said, you have to verify the identity of the people who want to use this service so that you aren't allowing scam artists to target victims. And A T and T said, what are we supposed to do. We're stuck in between these two directives where we have to give this, but we also have to do that, And Department of Justice was sent saying essentially, we don't buy it. You just have to figure out a way to verify this. Yeah,

you gotta you gotta have a verification system. UM and from one, I haven't seen any resolution to that, so I don't know that that particular case may still be ongoing as of the recording of this podcast. If it

has resolved, I could not find any information. That's one of the problems of following up on on reporting about these Yeah, you'll you'll hear about it when the lawsuit is leveled, But then there's not a lot of follow US resolutions to lawsuits are occasionally considered less news worthy. That's unfortunate. That same year, in two thousand twelve, A T and T made a hundred twenty six point four

billion dollars in revenues. That's according to their two thousand twelve financial report, which I looked up just before we came in here. That was a two point four percent growth over two thousand eleven revenues. And in that same report, A T and T VP of Consumer Product Planning and Research said that A and T was looking at mobile payments, as in using your smartphone as your payment way, Like if you go to a restaurant, you tap your smartphone

against that whole NFC wallet kind of stuff. I think that's great. I really look forward to the to being able to use my smartphone to pay for stuff as long as it's secure. But the biggest issue I have is, I mean beyond security, which clearly that needs to be number one, but number two is my concern that there are all these different systems that are being proposed that different companies are behind, Like Google has Google Wallet, A T. T has this other one, and then you've got these

other companies that are looking at it too. If all of them are using proprietary language for their systems, that means that the merchants have to choose which system are they going to support, because you know, I doubt that most of them are going to have some sort of multiple support that would be expensive for them to be

part of all these different programs. So a merchant has to make it kind of a decision like which one is likely to be the most popular, That's the one I'm going to support, Which means that as a consumer, your choices are limited. You may have no choice at all. You may have to use a specific type of phone if you want to take advantage of that kind of service.

I don't like that. I like it when everybody is using using the same basic set of language, so that the merchant can have a single device and no matter what phone you use, you can use it as long as it's compatible with that device. I think that most m app creators these days realize the efficiency that the profit in making things available to multiple platforms, so or I guess multiple um devices right right. Yeah, It's just it's tough when the the service provider is also the

one who creates the hardware as is the case. Well, A T and T does not directly create the hardware, but they create a layer of firmware and software that that hardware carries. So it definitely again, it's something to watch. Maybe a few years the Department Justice will step in and say, hey, I know that we keep talking to you guys, and I'm really sorry. I didn't bring this up last time, but we didn't know that it existed.

Then yeah, we'll see if that happens. But there's also some other interesting stuff mentioned in that report that A T and T is working on stuff that I find really exciting. Again, the whole proprietary network stuff is that it could be an issue, but it's still exciting technologies like vehicle to vehicle communications. A T and T labs are looking into that vehicle to road communications. We've talked about that on tech stuff, We've talked about it on

forward thinking. We you know the idea of having these communicating vehicles and communicating infrastructure. Yeah, A T and T is actually working with several auto manufacturers from A Tesla to BMW, Nissan and Ford um to to provide that Internet Internet connectivity to new automate automobiles. Yeah, which is fantastic. I mean when you think about it, that means that cars can communicate with one another, traffic can smooth out over time, you can have that sort of collision detection

techno oology built in there. In other words, you can make driving safer, uh slightly more automated, not to the point where the car is taking over for you, but the car at least is able to alert you to things that otherwise you would not know or even help the the infrastructure, the traffic infrastructure respond to dynamic changes, so or to you know, just get just get the music that you want to listen to from Pandora, Spotify

or something like that to play in your car. What I want I want them to develop a technology where when my car pulls up next to another car and I can see that the driver in that other car is really rocking out to something, but I can't hear it, I can find out what music they're listening to and then listen to that myself just to find out. You know, is that really worth it? They just could I rock out there? They would just they would just get J pop for me all the time. As you have revealed

to everybody on Forward Taking. Speaking of Forward Thinking, if you are interested in automated automobiles, we just did a their episode on that, so that should be coming out soon. Yeah, so definitely go check out that podcast. We have a lot of fun on that show. So if you enjoy tech stuff, I'm sure you would love Forward Thinking. Yeah. So does that brings us up? It does? Yes. That's when A T and T announced it would acquire Leap

Wireless for one point two billion dollars. It's also when you Verse, which is a T and T S broadband television and internet service, had its first billion dollar revenue month, a billion dollars in one month I think. I think in two thousand and twelve. They made ten billion dollars over the course of the year, so one billion dollar month that that was. That's huge growth. That's that's pretty enormous. You know. Um, that's exciting for A T and T. Yeah.

A T and T is currently because we are recording this podcast in October, they are currently the second largest wireless provider after Verizon Um. According to Forbes, one of A T and t s growing businesses is in providing data plans for tablet owner right, which is you know. That's they're just seeing that more and more tablet owners are are subscribing to these these data plans through a T and T, which is both good news and bad news. It's good news because it's a growing industry, it's a

growing business, and it's growing market. The bad news is it's not as profitable as some of their other businesses. So while it's growing, it's not creating the same revenue generation as some of their other businesses. And that's also partially due to the fact that smaller wireless companies like T Mobile and Sprint are providing really steep competition through the price competitions. That remind me competition through competitions. Yes,

that was very competitive pricing. I mean it's it's the kind of price wars that remind me of that long distance exactly. It's like like A T T had a quick uh head start with the iPhone and iPad stuff, and then uh, now the other companies, in order to make up for that that head start, have offered really competitive pricing, which means A T and T either has to follow suit or find some other way of making their service so attractive that the the higher prices feels

worthwhile to the consumer right um. Also, just this month, the FCC adopted an agreement between A T and T Dish Network Corporation, and a bunch of other smaller wireless

companies to help regulate more wireless bandwidths. And that's because A T and T currently owns a band of frequencies in in a one of those powerful signal like seven hurts kind of kind of bands, and their their concession to this plan will let smaller local providers get better access to the to the band, which should encourage manufacturers to make and sell more phones for that range and

also give customers more options. And which wireless provider to adopttcha, So A T and T owns a band that's adjacent to this other one and it's sort of an interoperability kind of approach absolutely, And and addition, network is related to that because they are also trying to um decrease the strength of the signal that they are using in order to allow other carriers to horn in on it here and there. So I mean, this could be a deal that could work out really well for everyone, and

I'm looking forward to seeing where it goes. And that wraps up this classic episode of tech Stuff. Hope you guys enjoyed it. If you have any suggestions for topics I should cover on current episodes of tech Stuff, reach out to me on Twitter. The handle is tech stuff h s W and I'll talk to you again really soon. Y text Stuff is an I Heart Radio production. For more podcasts from my Heart Radio, visit the i Heart Radio app, Apple Podcasts, or wherever you listen to your favorite shows.