The AT&T Story - Part One

first starts off with a couple of earlier companies. Now this is not something that's, you know, unusual. We've had other discussions about other companies that you know, you have to start with, like a like Seed Company and parents 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 true, it's very tricky to narrow it down to a single person, and 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 vocal 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 all you're 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 us. 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 action. Yep, you just hitch a team of horses to a boat and say giddy up. I mean, we didn't really research that part, so we

might be a little inaccurate. Make sure you tweet us and let us know. But no, no, I mean, you know, because the 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 file 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 patent, or technically Bell's lawyer filed the patn 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 goes 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 proposed to her that we actually cover the content the topic of Alexander Graham Bell and Elishah 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 scrawl 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 complete. So Bell's patent application goes in ahead of Gray's, 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 a few years. And so moving ahead on in that same year March tenth, eighteen seventy six. 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 uh, corey to the story, Alexander Graham Bell had accidentally 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, eighteen seventy six, they had the first two way telephone call between Watson and Bell. Now, before it was a

one way thing. 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, Hoy hoy, hoy, which is what Mr Burns says when he picks up the phone on on The Simpsons. That's delightful. Yeah, Alexander Gham 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. It was important with a capital I. But so in eight 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, that 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 d 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 que 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. All 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 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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Bob's Burgers, which is a favorite of mine. I really enjoy 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 may 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 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, interesting 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 loood for him. Yeah,

it's kind of interesting. I just thought it was neat So eight 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 patent 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 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 Elishah Gray, and that became a T and T s manufacturing division. 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 customer, 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 electrical 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, yeah, they're they're pretty much. 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 reach, 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're you can't do that. We have the 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 shot, hey, Jeb, so I don't know why his name is Jeb short Jebediah. 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 establish 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 proud. Go we're talking a little bit about how expensive these phone calls were too, 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 gonna 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. Yeah, sorry, and um, it would be a couple of years before they would come 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 that's that's that's pretty awful. Yeah. Yeah, well with without actually looking at the financial books and knowing that the company did operate in debt for a while, it's hard to say, although you know at the time they were positing themselves as sort of a public service, 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. Yep, that that was directly I think in due to his frustration with the board was saying earlier. And there was a dispute with some Boston financial backers as well, and all of that kind of fed into VAL's resignation. He just decided that that was not where he needed to be. So, uh 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. Grand Bell would make that one as well. Yep, Alexander Graham Bell's on the call. Uh,

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 us 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 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 minutes. 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 it happened, the columns at Bell System trembled and 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 eighteen four 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 you tell the operator where you want your call

to go. The operator 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 so when you think about that six thousand companies and seven thousand customers and then one company in 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 eight was that, uh, 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. D n 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 and 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 in getting around just a practical problem that existed with the technology. So several other advancements would be made later on. Yeah, and we'll talk a lot about those before we do. Let's take

another quick break to thank our sponsor. Alright, So back to a T and T. In nineteen o four, we start seeing some states begin 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 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 or 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 nineteen o six there were nearly forty thod coin operated telephones

in Chicago. And now you don't see them hardly anywhere. Yeah. I love seeing them in movies these days. 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. No. Seven

was big. That is the year that Theodore veil Um became president of A. T and T again again, well, he had technically been president of Bell I think, yeah, that's true. He was. He was president of Bell, and now he's president 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. And J P. JP Morgan specially like because he was still alive at the time, and he 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's hat up a challenge to have a line, a single line stretching from New York to Standford, Cisco in the next seven years. It's pretty again ambitious, It's very ambitious considering the technology

at the time. So night he starts to kind of spearhead and 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 this 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, 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 nt some important, very important thing in the history of the

phone industry happen. 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. 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 blurred out, Hello, Hello, who am I talking to? No one should open conversations with phrases such as Mr Wood of curdson Son'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 ahoyhoy uh. There's all kinds 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,

like 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. Nineteen, A 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 self 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,

all 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 nineteen and veiled it not continue to 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, everyone's network, 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 uh, and some would argue, well beyond well yeah, well it is 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 nine 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 ample amplify the signal, it just wasn't going to work. And dr lead to Forest 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 nine 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. Listen 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 a very generous um. And 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 nineteen 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. Watson. So yeah, this was 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. 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 Jackyll 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 dollars 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. Wow. 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 literally 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 nine um and it was also so that the United States wouldn't be played with hundreds of networks that had no inter connectivity. But it also meant that it gave A. T and T the ability to really submit 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 to

college football game Princeton beat University of Chicago. On August two, nineteen twenty two, Alexander Graham Bell died and on August fourth, 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 in your Yeah. Yeah, so that's a

pretty powerful stuff. Um. All right, Well that wraps up our first part on A T and T now, and we only got to nine two, so you see why we had to divide it up. But when we come back for the next episode, we'll talk more about how A T and T began to consolidate its power and some efforts on the part of the US government to maybe uh shake things up a little bit a couple of times as much as they could. Yeah, well, we'll

get into that next time. So if you have any suggestions for topics you would like to hear more about, send us a message. Our email addresses tech stuff at Discovery dot com or drop us a line on our social media. You can find us on Facebook, Twitter, and Tumbler with the handle of text Stuff hs W and Lauren and I will tell to you again really soon, but not on the phone for more on this and thousands of other topics because it has staff works dot com. Yes,