Speaker 1: Welcome to Tech Stuff, a production from I Heart Radio.
Speaker 1: Hey there, and welcome to tech Stuff. I'm your host,
Speaker 1: Jonathan Strickland. I'm an executive producer with iHeart Radio and
Speaker 1: a lot of all things tech. It is time for
Speaker 1: a classic episode and we are going to have a
Speaker 1: three partner in a series of classics. So this is
Speaker 1: going to be part one of three, and it's all
Speaker 1: about A. T and T, a huge company that has
Speaker 1: more than a century worth of history to it. So
Speaker 1: that's why I ended up being a three partner. And
Speaker 1: of course I could easily record another part to this.
Speaker 1: Just the amount of stuff that's happened in the past
Speaker 1: seven years alone would warrant such a thing, and maybe
Speaker 1: I will. But first let's listen back to where it
Speaker 1: all began with the A. T. And T story Part one.
Speaker 1: We've had other discussions about other companies that, you know,
Speaker 1: you have to start with like a like the company
Speaker 1: appearance General General Electric. You know, you have to go
Speaker 1: back way before General Electric to really talk about the company.
Speaker 1: So in this case, we have to talk about a man,
Speaker 1: a man who has been credited officially and through other
Speaker 1: sources as the inventor of the telephone although as we
Speaker 1: all know, when it comes to inventions, it's a lot trick.
Speaker 1: It's very tricky to narrow it down to a single person.
Speaker 1: It takes a research society to make a technology, and
Speaker 1: turns out that there are a lot of people who
Speaker 1: are working on things all at the same time, and
Speaker 1: sometimes it's just the person who gets the first. In
Speaker 1: the case of Alexander Graham Bell, Uh, not that he
Speaker 1: didn't work very hard and make great contributions. It's just
Speaker 1: that there were other people doing the same sort of stuff. Right,
Speaker 1: So in February, on February eighteen seventy six, that is
Speaker 1: when he filed this first pattern yep to a way
Speaker 1: to electronically transmit speech by quote causing electrical undulations similar
Speaker 1: informed to the vibrations of the air accompanying the said
Speaker 1: voke or other sounds substantially as set forth end quote. Now. Uh,
Speaker 1: it's interesting he had already written the patent out earlier
Speaker 1: in January of that year, but there was a peculiar
Speaker 1: sort of legal loophole that he had to leap through
Speaker 1: in order for him to get this patent recognized in
Speaker 1: not just the United States, but also the United Kingdom.
Speaker 1: See the UK had a rule that stated if you
Speaker 1: wanted to patent something in the UK, it could not
Speaker 1: first have been patented anywhere else. So Graham Bell writes
Speaker 1: up this patent he wants to get patented. He's ready
Speaker 1: to submit it, except that he first has to get
Speaker 1: over to the UK. And uh, guys, who don't know
Speaker 1: if you're familiar with this. In eighteen seventy six, there
Speaker 1: were very few options on how to get from say
Speaker 1: the United States to England that didn't involve a really
Speaker 1: long journey, right. It was basically swimming a horse right
Speaker 1: across that. Yep, you just hitch a steam of horses
Speaker 1: to a boat and say, giddy up. I mean, we
Speaker 1: didn't really research that part, so we'd be a little inaccurate.
Speaker 1: Make sure you tweet us and let us know. But no, no,
Speaker 1: I mean, you know, because a telecommunications were not a
Speaker 1: thing at this point, because he hadn't patented it yet,
Speaker 1: all right, So it was it was taken a while,
Speaker 1: and so as it turned out, that very same day,
Speaker 1: another electrician began the filing process. I don't think actually
Speaker 1: filed what he what he did. We're talking about Elisha
Speaker 1: Gray and Elishah Gray or or We'll just call him
Speaker 1: Gray because first of all, I assume it's Elisha. I
Speaker 1: did not look up at the pronunciation of his first name.
Speaker 1: But Mr Gray had submitted a preliminary application for a
Speaker 1: similar apparatus. It was also called a caveat. That was
Speaker 1: the technical name for the preliminary application. He submitted a
Speaker 1: caveat for consideration for a patent the very same day
Speaker 1: that Graham Bell posted it filed his pen or technically
Speaker 1: Bell's lawyer filed the pattern right here in the United
Speaker 1: States we're talking about, yes, exactly. So Gray applied for
Speaker 1: a pattern with a very similar idea, and the story
Speaker 1: go and I don't know the truth of this, And
Speaker 1: in fact, I have proposed to Lauren, not romantically, I
Speaker 1: mean an episode title. I've proposed to her that we
Speaker 1: actually cover the content the topic of Alexander Graham Bell
Speaker 1: and Elisha Gray, because the story about who got that
Speaker 1: patent is really interesting and I think could merit its
Speaker 1: own episode at any rate. Uh. The story is that
Speaker 1: Bell's lawyer got a look at Gray's application, which included
Speaker 1: an element that was not in Bell's work. But then
Speaker 1: when the patent was filed, there was a little scroll
Speaker 1: in the margin that covered the same idea. So the
Speaker 1: story is that Bell's lawyer, or perhaps Bell himself, It
Speaker 1: all depends upon the account you read, lifted an idea
Speaker 1: directly from Gray's work in order to essentially beat him tempt.
Speaker 1: So Bell's patent application goes in ahead of raise, and
Speaker 1: so Bell is at least initially awarded the patent, although
Speaker 1: it was not uncontested. There was actually quite a vigorous
Speaker 1: battle in the legal system of that was gone for
Speaker 1: a few years. And so moving ahead on in that
Speaker 1: same year March tenth, eighteen seventy six, and remember he's
Speaker 1: already filed the patent, But it was only on March tenth,
Speaker 1: eighteen seventy six that we had the famous message from
Speaker 1: Alexander Graham Bell to his assistant Thomas Watson. Mr Watson
Speaker 1: being in another room in the same building. Yeah, and
Speaker 1: and he heard it over this device what would what
Speaker 1: would become the telephone, and the message, of course was
Speaker 1: Mr Watson, come here, I want you. And it turns
Speaker 1: out that Corey to the story, Alexander Graham Bell had
Speaker 1: acidentally spilled some acid and needed Thomas Watson to come
Speaker 1: over and help him clean it up before it did
Speaker 1: any damage to the surroundings. So not only was March tenth,
Speaker 1: eighteen seventy six the first phone call, it was the
Speaker 1: first emergency phone call. So yeah, that's a fun little
Speaker 1: little side note about this. And we are leading up
Speaker 1: to the company, but we have to lay this groundwork. Yeah,
Speaker 1: and I find all of this pretty fascinating overall. So,
Speaker 1: so on October eighth of that year, eighty six, they
Speaker 1: had the first two way telephone call between Watson and Bell. Now,
Speaker 1: before it was a one way thing. You you could
Speaker 1: have a transmitter and receiver essentially. Now there was one
Speaker 1: on either side. You could actually have this communication. And
Speaker 1: this is where Bell introduced his idea of what the
Speaker 1: perfect telephone salutation was, Hoi hoi, yeah, which is what
Speaker 1: Mr Burns says when he picks up the phone on
Speaker 1: on the Simpsons, Hoy hoy, that's delightful. Yeah, Alexander Graham,
Speaker 1: Bell and everyone involved in phone companies hated the word hello.
Speaker 1: They did, and we've got some notes about that. In
Speaker 1: just a little bit. There was there was a very
Speaker 1: serious and an intense contention about this. Do you wonder
Speaker 1: it was important with a capital I? But so in
Speaker 1: Bell was getting financial backing from the fathers of two
Speaker 1: of his students at Boston University, Thomas Sanders and um
Speaker 1: Gardner Hubbard, and wound up forming the Bell Telephone Company right.
Speaker 1: In fact, at first he tried to sell the telephone
Speaker 1: patents to a rival company called Western Union. You may
Speaker 1: have heard of that company. At the time, it was
Speaker 1: the largest corporation in the world, and he offered to
Speaker 1: sell it to them for the princely sum of one
Speaker 1: hundred thousand dollars, and Western Union told him to take
Speaker 1: a long walk off a short pier. Yeah, they didn't
Speaker 1: at that particular point in time understand what this whole
Speaker 1: telephone thing was about. They were like, that's a toy.
Speaker 1: We don't get it right. If you wanted to send
Speaker 1: a message to someone, why would you go through all
Speaker 1: this bother when you could just telegraph it to them.
Speaker 1: We've got perfectly good telegraph lines and swimming horses, why
Speaker 1: exactly So, so they they poo pooed the idea, and
Speaker 1: that's when Bell decided to go the other route and
Speaker 1: form this company. And with that financial backing that Lauren
Speaker 1: talked about, the Bell Telephone Company came into being. UM
Speaker 1: and UH at first, it was a pretty modest affair
Speaker 1: in the early days. They were seven seventy eight telephones
Speaker 1: in existence period, and the company had a grand total
Speaker 1: of one employee, and that one employee was Thomas Watson,
Speaker 1: the former assistant to Alexander Graham Bell, and he was
Speaker 1: He was paid the salary of three dollars per day
Speaker 1: and also had one tenth interest in the company, which,
Speaker 1: as it turns out, would probably be worth a little
Speaker 1: bit more than his salary. Yeah, so Bell goes ahead
Speaker 1: with his company. Uh. Meanwhile, Gray, who had done some
Speaker 1: work for Western Union and had founded a company called
Speaker 1: Western Electric that was acquired by Western Union, began to
Speaker 1: compete against Bell, and uh, it got pretty nasty. Bell
Speaker 1: started to look into how he wanted to well, really
Speaker 1: the company was looking into how they wanted to form
Speaker 1: the business, and they took a queue off the Morse
Speaker 1: Company Telegraph Company and went with a franchise model. The
Speaker 1: idea being that they would they would license out technology
Speaker 1: and telephones and things of that nature to companies that
Speaker 1: wanted to oversee the administrative efforts of handling this kind
Speaker 1: of local regionalized phone system. And so Bell would end
Speaker 1: up getting a company Bell would end up getting a
Speaker 1: portion of that revenue uh in return for the fact
Speaker 1: that they're licensing the technology to this other company. Right right,
Speaker 1: because until Bell's patents would expire, the company was the
Speaker 1: exclusive manufacturer and provider of telephones. UM. Those those patents
Speaker 1: would expire in and that was a date that everyone
Speaker 1: in Bell was very very anxious about. They were cognizant
Speaker 1: of it, they were anxious about it. There were other
Speaker 1: companies that did attempt to spring up despite this um
Speaker 1: this legal uh monopoly that the Bell system had because
Speaker 1: of the patents. UH. But we'll talk about that in
Speaker 1: a second before we get too far into this, because
Speaker 1: there's a lot to talk about. Let's take a quick
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Speaker 1: and movies that you can see on Hulu Plus. One
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Speaker 1: go check that out. Okay, so we're now up to
Speaker 1: eighteen seventy eight. Now, in eight seventy eight, that's when
Speaker 1: we saw the first regional telephone company actually launched. Not
Speaker 1: this was one operated by Bell Telephone, right, it was
Speaker 1: a franchise called New Haven District Telephone Company and uh
Speaker 1: in New Haven, Connecticut. And Bell and Western Union began
Speaker 1: to compete even more viciously. They were both launching franchises
Speaker 1: across the United States. Western Union began to use leverage
Speaker 1: by saying that they would not install any telegraph lines
Speaker 1: in any locations that were using Bell systems. So any
Speaker 1: region that relied heavily upon telegraph services wouldn't do business
Speaker 1: with Bell because they were afraid that they did, they
Speaker 1: would never have any improvements or repair or maintenance of
Speaker 1: the telegraph systems or even operation of the telegraph system.
Speaker 1: So it's kind of you know, holding Bell Systems hostage thing.
Speaker 1: You don't you know, if you don't uh, you don't
Speaker 1: get to play in this game because I own this game. Um. Now,
Speaker 1: Western Union's telephones were based on the work of two inventors,
Speaker 1: one of them Elisha Gray and the other Thomas Edison. Yeah,
Speaker 1: so some big names here. And on September twelve, that's
Speaker 1: when Bell Telephone Company sued Western Union, which is a
Speaker 1: big story because Bell had a small fortune at his disposal.
Speaker 1: Western Union was the largest corporation in the world at
Speaker 1: that time. It worth more than forty one million dollars
Speaker 1: and had the backing of a certain powerful family in
Speaker 1: the United States, the Vanderbilts, And so it was a
Speaker 1: big deal that Bell would go up against this corporate giant.
Speaker 1: And that same year Gardner Hubbard, one of those financiers
Speaker 1: who backed the Bell system in the very early days,
Speaker 1: hired on a man named Theodore Newton Vale to act
Speaker 1: as general manager slash president of Bell Telephone. Right. Veil
Speaker 1: had previously worked for the US Postal Service and and
Speaker 1: he was very key in orchestrating this legal battle. Yeah,
Speaker 1: it's also interesting because Veil will play another important role
Speaker 1: a bit further down the line. Veil had kind of
Speaker 1: on again off again relationship with Bell Telephone. Not necessarily
Speaker 1: all by choice, no, no, but but he did help
Speaker 1: shape the company and absolutely and even as early as this,
Speaker 1: he had this vision of building a national long distance
Speaker 1: telephone network um and doing it before Bell's patents ran out,
Speaker 1: so which was hugely ambitious, incredibly ambitious, a little too
Speaker 1: ambitious it might turn out to be. In eighteen eighty,
Speaker 1: Alexander Graham Bell decided to resign from the Bell Telephone
Speaker 1: Board of directors um and the next year one Thomas
Speaker 1: Watson would also resign. So at this point the two
Speaker 1: inventors who gave the company the very basic invention that
Speaker 1: it was all centered around, had left the board of
Speaker 1: directors at that time, I believe was putting a lot
Speaker 1: of pressure on. They didn't really see the immediate monetary
Speaker 1: purpose of this whole nationwide network thing, and so they
Speaker 1: were they were really getting down people's throats about like,
Speaker 1: we kind of want to make money, we kind of
Speaker 1: put some money in, we kind of want a little
Speaker 1: bit back, And this is digging your heels in. Yeah,
Speaker 1: this is a whole lot of us giving you money
Speaker 1: and not a whole lot of us getting anything back. Right. Yeah,
Speaker 1: there were there were many years when this company was
Speaker 1: operating in debt because they were setting this stuff up. Also,
Speaker 1: interest seeing little side note, Thomas Watson had a second
Speaker 1: career after his work with telephone systems. He would begin
Speaker 1: a career as a ship builder. He built ships him. Yeah,
Speaker 1: it's kind of interesting, I just thought it was neat two.
Speaker 1: This is about when Western Union and Bell Systems settle
Speaker 1: this lawsuit. That's this ongoing dispute that had been pretty
Speaker 1: much taking up all their time over the last couple
Speaker 1: of years um because the pen infringement lawsuits were something
Speaker 1: that was just nasty on all parts. Well, in that settlement,
Speaker 1: Western Union ended up selling its telephone network to Bell,
Speaker 1: so that was a network that was what there was. Like,
Speaker 1: that's significant, So fifty five more cities go to Bell Systems.
Speaker 1: Bell in return promised Western Union of its telephone rental revenue.
Speaker 1: So Bell Telephone also acquired from Western Union the company
Speaker 1: Western Electric that was the one that was founded by
Speaker 1: Elisha Gray and that became a T and T s
Speaker 1: manufacturing division. Hey guys, it's Jonathan from twenty. We are
Speaker 1: going to take a quick break, but we will be
Speaker 1: right back. So here's just a little information about how
Speaker 1: the phone system used to work in the United States.
Speaker 1: It used to be that you would go to a
Speaker 1: store to get a phone and you leased it. You
Speaker 1: didn't own that phone, so you actually that phone remained
Speaker 1: the property of the parent company, which at this time
Speaker 1: is Bell Systems, and shortly will become a T and T,
Speaker 1: and so you would pay a leasing fee, and in turn,
Speaker 1: the company that you got it from was likely not
Speaker 1: directly a T and T. It was probably some regional
Speaker 1: office that also was leasing that same phone from a
Speaker 1: T and T. Certainly at this point it was Bell Systems.
Speaker 1: But yeah, so Bell Systems leases out a phone to
Speaker 1: a regional office, the regional office leases the phone out
Speaker 1: to the custom So you didn't you never actually owned
Speaker 1: that phone, which I think some people might find a
Speaker 1: little unusual today because they think, well, I bought this
Speaker 1: piece of electrically. I mean, you turn off the service. Fine,
Speaker 1: I understand that, but that's my phone. Um, yeah not
Speaker 1: back then, Nope, you were just renting it. Really, So
Speaker 1: Western Union gets out of the way. So Bell system
Speaker 1: effectively becomes a monopoly. And according to research terms of
Speaker 1: telephone network capacity, yeah, they're they're pretty much the There
Speaker 1: are other competing telephone networks, but they're all they're all
Speaker 1: technically illegal at this time because this is still exactly so.
Speaker 1: According to researcher John Brooks, Bell Telephone would have a
Speaker 1: level more than six hundred patent infringement lawsuits against other
Speaker 1: companies over the course of a decade, and they won
Speaker 1: every single one of them. Because anytime a company would
Speaker 1: come up, like there were companies that were trying to
Speaker 1: create telephone systems in rural areas that Bell just had
Speaker 1: not reached, and so they wanted to give people the
Speaker 1: benefit of this technology. Bell did not have either the
Speaker 1: ability or interest to go into that market. So they
Speaker 1: would go ahead and do it themselves, and then Bell
Speaker 1: would soothe them because they you can't do that. We
Speaker 1: have the exclusivity rights to this technology, um, and you know,
Speaker 1: and there's like, We're gonna get there and just give
Speaker 1: us time. Meanwhile, everyone's like, but I wanted to call
Speaker 1: my buddy. There's no nothing to call them on other
Speaker 1: than sticking ahead out the window and shotting, hey, Jeb,
Speaker 1: so I don't know why his name is Jeb short
Speaker 1: for Jebediah eighty five. That is when a T and
Speaker 1: T is officially formed as a subsidiary of Bell. Yeah,
Speaker 1: and this is the the formal implementation of VAL's vision
Speaker 1: of creating a long distance network. That's the main purpose
Speaker 1: of a T and T. So a T and T
Speaker 1: is all about building out a long distance network so
Speaker 1: that people can call each other across states and across countries.
Speaker 1: Right by the end of eighty five, the company would
Speaker 1: established the very first long distance connection between New York
Speaker 1: and Philadelphia. It was capable of hand handling a huge
Speaker 1: one call at a time, one call capacity. So I
Speaker 1: can just imagine the circuits being busy over and over
Speaker 1: and thinking they need to just wrap this up. Those
Speaker 1: people in Philly are chatter boxes. Uh yeah, So that
Speaker 1: was but it was really more of a proof of
Speaker 1: concept obviously at that point, not necessarily something that was
Speaker 1: going to be terribly practical. We're talking a little bit
Speaker 1: about how expensive these phone calls were too. Oh yeah, yeah,
Speaker 1: they got a little little dear. Um So that same
Speaker 1: year was when the state of Indiana passed a law
Speaker 1: restricting the price of telephone rental fees. So remember I
Speaker 1: was saying, you rent your telephone, both the regional offices
Speaker 1: do it and then the customers do it. But because
Speaker 1: Bell was the only game in town, they could pretty
Speaker 1: much dictate what those rental prices were going to be. Uh.
Speaker 1: This this lawsuit said, well, you need to cut back
Speaker 1: on those costs. So um Bell's response, The company's response
Speaker 1: was saying, well, you know, we have to have these
Speaker 1: prices because the service is expensive to to build out,
Speaker 1: to administer, to maintain. We cannot operate at a lower cost.
Speaker 1: We if we were to lower these this amount of money,
Speaker 1: we would not make a profit. We would lose money
Speaker 1: on the deal. We can't do it. So your phones
Speaker 1: are off and they shut off the phones in Indiana. Yeah,
Speaker 1: no more calls India. Yeah sorry, and um it would
Speaker 1: be a couple of years before they would when service
Speaker 1: was restored for one corporation to have. Yeah. Some people
Speaker 1: said the A. T and T statement was that this
Speaker 1: was an example of quote the futility of public action
Speaker 1: and ignorance end quote, saying that you know, you guys
Speaker 1: were all upset and you told us that we had
Speaker 1: to do this thing, but you didn't understand that we
Speaker 1: were doing it because that's financially what we have to do.
Speaker 1: Other people said, no, A T and T held the
Speaker 1: state hostage by saying you don't get phone calls until
Speaker 1: you play ball, which I think is a fair that's
Speaker 1: that's that's pretty awful. So well, without actually looking at
Speaker 1: the financial books share and knowing that the company did
Speaker 1: operate in debt for a while, entirely it's hard to say,
Speaker 1: although you know at the time they were positing themselves
Speaker 1: as sort of a public service almost that's right, akin
Speaker 1: to something like the post Office, which would become much
Speaker 1: more their their message in a few years. So seven
Speaker 1: that was the first year that Theodore Vale resigned as president. Yea,
Speaker 1: that that was directly, I think in due to his
Speaker 1: frustration with the board, like he was saying earlier. And
Speaker 1: there was a dispute with some Boston financial backers as well,
Speaker 1: and all of that kind of fed into Veil's resignation.
Speaker 1: He just decided that that was not where he needed
Speaker 1: to be, so that he leaves. Don't worry, He's part
Speaker 1: of the story is not over yet without him. Meanwhile,
Speaker 1: in eighteen eighty nine, the Bell system would adopt the
Speaker 1: first official Bell logo. Yeah what it looked like a bell? Yeah, okay,
Speaker 1: that makes sense alright. That was when the first long
Speaker 1: distance connection was established between New York and Chicago. And
Speaker 1: this was the real display of long distance. You know,
Speaker 1: New York to Philadelphia was impressive. New York to Chicago
Speaker 1: was a much greater distance. So this was marked by
Speaker 1: a ceremonial phone call. Graham Bell would make that one
Speaker 1: as well, yep, Alexander Graham bells on the call. I
Speaker 1: did not see who he was calling. Maybe it was
Speaker 1: just you know, prank calls, and he was making prank
Speaker 1: calls to Chicago and ordering pizza and then saying, our
Speaker 1: pizza is better than your pizza. I can only hope,
Speaker 1: I would really hope. So, I mean you think prank
Speaker 1: called pizza, it fits so the after all, the very
Speaker 1: first call on a mobile phone was a prank call.
Speaker 1: But the capacity of this line was just like the
Speaker 1: one from Philadelphia, one at a time, and it cost
Speaker 1: nine dollars for the first five minutes, which you you
Speaker 1: did the math on inflation, yeah, I used in the
Speaker 1: inflation calculator. Now, normally I would use the Bureau of
Speaker 1: Labor Statistics calculator, which factors in the consumer price index,
Speaker 1: but that only goes back to n So I used
Speaker 1: the inflation calculator. I honestly don't know where they pulled
Speaker 1: their their figures from. So, but based upon the inflation calculator,
Speaker 1: that nine dollars would translate into sixty dollars today. So
Speaker 1: sixty dollars for five minutes of a phone call. So,
Speaker 1: if you think your cell phone bill is high. Yeah,
Speaker 1: that's no talk about how I'm almost all the minute.
Speaker 1: Well those minutes are precious. Look how much they cost
Speaker 1: back in the eighties. Uh so that was when those
Speaker 1: patents that we were talking about expired. Yeah, and uh
Speaker 1: the day had happened. The columns at Bell System tremble.
Speaker 1: Then there was a great whaling. Over the next ten years,
Speaker 1: six thousand independent telephone companies would open across the United States.
Speaker 1: Now these were legal at this point because the patents
Speaker 1: no longer gained exclusivity rights to Bell Systems. So you
Speaker 1: had all these companies that suddenly could operate legally within
Speaker 1: the United States and offer a competing product or service. Rather,
Speaker 1: there are some problems here. So let's say, Lauren, that
Speaker 1: you and I both live in the same city back
Speaker 1: in eight and it's a small city that Bell System
Speaker 1: really hasn't gotten into. But there's this regional company that
Speaker 1: has introduced a telephone system, and a second regional company
Speaker 1: that competes and also sets up a telephone system. You
Speaker 1: become a customer of one of those companies, I become
Speaker 1: the customer of the other company. And then one night
Speaker 1: you realize, Hey, I left my notes at work. I
Speaker 1: need you to grab them and bring them home. Uh,
Speaker 1: and you know, can you swing by my place and
Speaker 1: you try and call me, but you can't because you're
Speaker 1: on one system and I'm on the other, and there's
Speaker 1: no interconnectivity. Right, And this was partially because you know,
Speaker 1: those those lines might literally not have been connected, and
Speaker 1: even if they were, you're talking to The way that
Speaker 1: telephones worked at the time is is you would you
Speaker 1: would pick it up, and you would get an operator
Speaker 1: and tell the operator where you want your call to
Speaker 1: go to operation or would manually switch you through, manually
Speaker 1: look at a system of switches and figure out the
Speaker 1: route to get your call to that house or that
Speaker 1: other phone, right or as long as the line wasn't engaged,
Speaker 1: they could try the line, but if it's not on
Speaker 1: their system, then you couldn't call them. So so there
Speaker 1: there were speaking of these these numbers of customers, there
Speaker 1: were some seven hundred thousand customers using these other services
Speaker 1: and about a million using Bell. Yeah, so around that
Speaker 1: so when you think about that six thousand companies and
Speaker 1: seven hundred thousand customers and then one company and a
Speaker 1: million customers, that shows you that they were still they
Speaker 1: were still effectively a monopoly because there was no other
Speaker 1: single company that could compete with them. So while they weren't,
Speaker 1: by the letter of the law, a true monopoly as
Speaker 1: in the only game in town, effectively that's what they were.
Speaker 1: And one of the things that happened in was that well,
Speaker 1: the Pacific Telephone and Telegraph Company, which later became Pacific Telesis,
Speaker 1: opened the first exchange operated entirely in a language other
Speaker 1: than English within the United States, operated in Chinatown in
Speaker 1: San Francisco, and it was all in Chinese. All the
Speaker 1: customers spoke Chinese, and all the operators spoke Chinese. Eight
Speaker 1: that's when A. T and T acquired its former rival,
Speaker 1: Western Union. And I sure probably some people said ha
Speaker 1: ha when it happened. So remember Western Union was the
Speaker 1: company that had they purchased those patents from Bell, this
Speaker 1: would be a totally different story. There would not have
Speaker 1: been an A T and T. But instead they had
Speaker 1: decided to fight against Bell and Bell Systems, and now
Speaker 1: they became a property of A T and T itself.
Speaker 1: Um So A T. T acquires the assets of the
Speaker 1: American Bell Telephone Company, which means that A T and
Speaker 1: T the subsidiary, now becomes the parent company. Yeah, so
Speaker 1: A T and T was now the big company. The
Speaker 1: student has become the teacher. So eight is when we
Speaker 1: can say the company of A. T and T really
Speaker 1: came into being. It was no longer a subsidiary or division.
Speaker 1: It was it was in charge. So by this time
Speaker 1: the company's size was pretty big. You know. Keep in
Speaker 1: mind when it was founded there was one employee. Now
Speaker 1: there were a million, three two thousand phones in the
Speaker 1: system and more than forty five thousand employees. And that
Speaker 1: same year, researchers independently developed a theory about something called
Speaker 1: loading coils. The loading coils are a part of technology
Speaker 1: that was very important in the early days of the
Speaker 1: telephone system. It actually would reduce the rate at which
Speaker 1: a traveling telephone signal would weaken, which made it possible
Speaker 1: to build longer phone lines and build out this long
Speaker 1: distance network. Right that That loss of signal is called attenuation,
Speaker 1: and it right, it's it's a loss of intensity of
Speaker 1: a signal as it travels through any medium, right Yeah,
Speaker 1: So this was a huge help and getting around just
Speaker 1: a practical problem that existed with the technology. So several
Speaker 1: other advancements would be made later on. We have more
Speaker 1: to say about the early days of A T and T.
Speaker 1: But first let's take another quick break. Al right, So
Speaker 1: back to A T and T. In nineteen oh four,
Speaker 1: we start seeing some states began to pass laws requiring
Speaker 1: the interconnection between phone networks. And it's still a state
Speaker 1: by state case basis at this point, so it's not like, um,
Speaker 1: it's not like this is a national movement yet, but
Speaker 1: it's starting to kind of develop into that. And remember
Speaker 1: A T and T. There, they were taking a pretty
Speaker 1: nasty competitive approach. Nasty might be the wrong word, how
Speaker 1: about enthusiastic. Yeah, So, but technically this is what everyone
Speaker 1: had to do. Everyone was building out their networks and
Speaker 1: not connecting with other networks. A T and T had
Speaker 1: the most power here because they had the largest number
Speaker 1: of customers among any single telephone company. So by not
Speaker 1: playing ball by not allowing connectivity with these other networks.
Speaker 1: If you know that A T and T is the
Speaker 1: big telephone company and that the majority of the people
Speaker 1: you would want to get in touch with are going
Speaker 1: to be connected to that company, that's the company you
Speaker 1: go with, even if there's a regional company that ends
Speaker 1: up having a better deal for you financially. If no
Speaker 1: one you know is on that service then and you
Speaker 1: can't get a call from another service, right, So just
Speaker 1: imagine for you cell phone users out there that if
Speaker 1: you're an a T and T customer, you would be
Speaker 1: unable to call anyone using Verizon, Sprint, or T Mobile,
Speaker 1: and the same would be true for each of those companies.
Speaker 1: No one would be able to call anyone cross company.
Speaker 1: Then you see how how this becomes a problem. But
Speaker 1: this is still in the early days. So we get
Speaker 1: to nineteen o six, right, Yeah, it was around that
Speaker 1: time that the head of the Chicago Bell Exchange instituted
Speaker 1: coin operated telephones to prevent people from freeloading in in shops,
Speaker 1: you know, drug stores something might have a telephone in them,
Speaker 1: and since it was still relatively expensive to place calls,
Speaker 1: this was a way they you know, it was a
Speaker 1: nickel perk hall and um. By by six, there were
Speaker 1: nearly forty coin operated telephones in Chicago, And now you
Speaker 1: don't see them hardly anywhere. Yeah, I love seeing them
Speaker 1: in movies these days, because once in a while, like
Speaker 1: maybe an airport or something, you might see some, but
Speaker 1: otherwise they're you know, they used to be everywhere heck,
Speaker 1: I remember where they were everywhere. Oh yeah, yeah, I
Speaker 1: remember that too. I'm not that young. Was big. That
Speaker 1: is the year that Theodore Veil became president of A
Speaker 1: T and T again again, Well, he had technically been
Speaker 1: president of Bell I think, yeah, that's true. Previously he
Speaker 1: was president of Bell and now he's first of the
Speaker 1: time president of A T and So he was brought
Speaker 1: back on when the JP Morgan group had gained a
Speaker 1: majority control of A T and T and said, you
Speaker 1: know this Veil guy, we like what he has to say.
Speaker 1: We're going to put him back on the top of
Speaker 1: the company. Yeah, j P. JP Morgan especially like because
Speaker 1: he was still alive at the time, and he's specifically
Speaker 1: I'm possibly even called up Veil. I think Veil was
Speaker 1: in South America at the time doing stuff and you know,
Speaker 1: had been retired, and he convinced him to come out
Speaker 1: of retirement. Yep. And Veil again started to really laid
Speaker 1: down the vision of A T and T and started
Speaker 1: an ad campaign in nineteen o eight, and Veil would
Speaker 1: really be responsible yet again for setting the vision of
Speaker 1: A T and T. He' set up a challenge to
Speaker 1: have a line, a single line stretching from New York
Speaker 1: to San Francisco in the next seven years. It's pretty
Speaker 1: again ambitious, it's very ambitious considering the technology at the time.
Speaker 1: So en eight he starts to kind of spearhead an
Speaker 1: ad campaign that set the A, T and T corporate policy. Yeah,
Speaker 1: that this was this was the other really big important
Speaker 1: part of his vision, and and it was connected to
Speaker 1: this a single line concept. Yeah, it was one policy,
Speaker 1: one system, universal service. The idea here being that in
Speaker 1: order to guarantee that you could that every person in
Speaker 1: America would have access to telephones, you had to essentially
Speaker 1: take the stance of we're the only game in town,
Speaker 1: because if there's none of this interconnectivity through different companies,
Speaker 1: that's the only option you have is you have to
Speaker 1: have someone come out and become the dominant player so
Speaker 1: that everyone has access to the phone and can call
Speaker 1: anyone else. He also Vail had this very kind of
Speaker 1: pro monopoly stance of competition is what turns consumers away
Speaker 1: from brands. It's this this kind of cutthroat thing that
Speaker 1: happens is bad publicity for everyone. So if you know,
Speaker 1: just it's kind of that doctor horrible sort of thing
Speaker 1: like where the world is terrible place, and I just
Speaker 1: need to rule it. Yeah. Now, it's exactly that kind
Speaker 1: of approach. In fact that I had read several things
Speaker 1: about how the the telegraph companies had entered an era
Speaker 1: of competition and they all decided they did not like
Speaker 1: that very much. And so the telephone company was following
Speaker 1: the same route. They weren't so crazy about competition. And
Speaker 1: to be fair, this is a case where competition wasn't
Speaker 1: really helpful to the consumer simply because of that lack
Speaker 1: of interconnectivity. It wasn't that you know, the problem with
Speaker 1: is that without the competition, you don't have the benefit
Speaker 1: of the consumer being able to choose the right kind
Speaker 1: of plan or price or whatever. But on the downside
Speaker 1: is you know, if there's no interconnectivity, then it really
Speaker 1: gets you stuck. Yeah, and in these early days that
Speaker 1: was the bigger issue. So, um, some important, very important
Speaker 1: thing in the history of the phone industry happens. Well,
Speaker 1: phones were still new enough that we didn't really have
Speaker 1: phone etiquette. Yeah, And so Bell would publish a a
Speaker 1: little Bell Engineer magazine would would sponsor contest for the
Speaker 1: best essay about the proper telephone etiquette, and they published
Speaker 1: the best essay um and this was kind of when
Speaker 1: the war on hello began. Yeah, so hello was being
Speaker 1: adopted as the salutation of choice by a lot of people,
Speaker 1: and phone executives and other people thought that this was
Speaker 1: a vulgar means of greeting someone on the phone. I
Speaker 1: have a quote from that winning essay. It is, would
Speaker 1: you rush into an officer up to the door of
Speaker 1: a residence and blurt out, Hello, Hello, who am I
Speaker 1: talking to? No one should open conversations with phrases such
Speaker 1: as Mr Wood of Carson Sun's wishes to talk with
Speaker 1: Mr White without any unnecessary and undignified hello's. Huh. Now.
Speaker 1: I remember hearing once upon a time an apocryphal tale
Speaker 1: that the telephone is what gave rise to the word hello,
Speaker 1: But in fact, the word hello pre dates the telephone
Speaker 1: by a few decades. I think the earliest written examples
Speaker 1: date from the eighteen thirties. However, I will say that
Speaker 1: the telephone gave rise to the popularity of the word hello.
Speaker 1: And obviously, you know, any any sensible civilized human being
Speaker 1: would use ahyhoy uh. There's all ends of other etiquette
Speaker 1: notes in these manuals that were coming out at the time,
Speaker 1: one from California instructed speakers to speak directly into the mouthpiece,
Speaker 1: keeping the mustache out of the opening. Yes, and that
Speaker 1: would come into play again in the late two thousand's,
Speaker 1: like the two thousand ten era, when hipsters would come
Speaker 1: back and the mustache got out of control again. Come on, guys, seriously,
Speaker 1: candlebar mustaches are amazing. It's not anyone's one before. So
Speaker 1: what you're saying is that you had one before it
Speaker 1: was cool. Uh. T and T becomes a government sanctioned
Speaker 1: monopoly as the result of an antitrust lawsuit, he said,
Speaker 1: ignoring her appointedly. It's documented in something that's called the
Speaker 1: Kingsbury Commitment. So at that time, A T and T
Speaker 1: divested itself of controlling interest in Western Union, so you
Speaker 1: know they had acquired it earlier. Now they divested their
Speaker 1: control of it and also allowed competing telephone services to
Speaker 1: connect to the A T and T long distance network.
Speaker 1: They had to do so with a fee. There was
Speaker 1: a toll fee every time they would connect to A
Speaker 1: T and T S line. So that's how A T
Speaker 1: and T could gain revenue through this this relationship. A
Speaker 1: right JP Morgan was still a partial owner of A
Speaker 1: T and T at the time, and he was fighting
Speaker 1: with the lawmakers known as trustbusters, who were trying to
Speaker 1: uh trying to break up A T and T right
Speaker 1: up until he passed away in this year in ninet
Speaker 1: and Veil did not continue the fight the way that
Speaker 1: Morgan really wanted to. He he chose to dominate through
Speaker 1: this kind of terrifically sneakily backhanded cooperation with these smaller
Speaker 1: independent companies, and because it meant that he still made
Speaker 1: money from them, a lot of money. Yeah, I mean,
Speaker 1: you know this, this worked out really well for everyone
Speaker 1: except the independence because you know, the the arrangement helps
Speaker 1: allow customers of different telephone companies connect with each other
Speaker 1: because it mandates that A T and T has to
Speaker 1: play with everyone's uh so the network interconnectivity is now
Speaker 1: no longer a problem. But it gave A T and
Speaker 1: T permission to function like a national utility, and and
Speaker 1: it would dominate the telephone market until ninety uh And
Speaker 1: some would argue, well beyond that, Well, yeah, well it's
Speaker 1: certainly into the eighties two, you could argue, and so
Speaker 1: so right, So, if independent companies wanted to use the
Speaker 1: widespread bell system. They had to agree to use Bell's equipment,
Speaker 1: they had to adhere to their standards, and they had
Speaker 1: to again pay fees. So if you use of those wires.
Speaker 1: If you're thinking that this antitrust story sounds familiar, it
Speaker 1: will get increasingly familiar as this series goes on. Yes,
Speaker 1: one competitor wrote that that this entire ordeal was like
Speaker 1: trying to fight an octopus, which I just think is
Speaker 1: terrifically like, I want that steampunk comic book about that.
Speaker 1: I'm moving on into nineteen fourteen, we see another technological development,
Speaker 1: the three element vacuum tube, which was an amplifier that
Speaker 1: enabled the first transcontinental line to exist, which didn't exist yet,
Speaker 1: it hadn't been laid down yet, but this technology is
Speaker 1: what made it possible. All right, This is an important
Speaker 1: advancement because of that aforementioned attenuation. And you know, unless
Speaker 1: people could come up with a better material than copper
Speaker 1: to transmit a signal with, or or a way to
Speaker 1: amp amplify the signal, it just wasn't going to work.
Speaker 1: And Dr leed to Forrest created this audion uh three
Speaker 1: element vacuum tube, and it would be really big, and
Speaker 1: lots of other industries that enabled the development of radio, radar, television,
Speaker 1: and computers right up until transistors became a thing in
Speaker 1: the nineteen sixties. Yeah. Yeah, you have to go all
Speaker 1: the way. Remember that the first transistor isn't even invented
Speaker 1: in the prototype stage until the late forties. So from
Speaker 1: this point until the late forties, just in the in
Speaker 1: the lab, not not let alone out in the real world.
Speaker 1: This is this is the best the technology could offer
Speaker 1: us at the time, right, Yeah, I think nineteen sixties
Speaker 1: was a number that was incorrect listening to Jonathan Well,
Speaker 1: by the nineteen sixties it was certainly common, and the
Speaker 1: fifties it wasn't common because they still had they still
Speaker 1: had to refine the design. Certainly, the first transistor looks terrible.
Speaker 1: That's very generous. Um. And meanwhile, via eighteen ties manufacturing
Speaker 1: subsidiary that we have previously mentioned, Western Electric Company International
Speaker 1: affiliates were starting to sell equipment around Europe, South America
Speaker 1: and also in Japan and Australia. Yeah. Yeah, we could
Speaker 1: not call them yet, but that would that would change shortly,
Speaker 1: relatively speaking. January fifteen, that's when the first long distance
Speaker 1: call is between Alexander Graham Bell in New York and
Speaker 1: Thomas Watson all the way in San Francisco Thomas Watson.
Speaker 1: So this was this is that promise about getting that
Speaker 1: that long distance connection all the way from coast to
Speaker 1: coast in the United States. It also had two other
Speaker 1: connections on that one call. There was the President of
Speaker 1: the United States who was in Washington, d C. And
Speaker 1: Thomas Vale, who at the time was in Jekyl Island,
Speaker 1: Georgia's there. I've been there as well, so yeah, it's
Speaker 1: kind of interesting. I think I've even seen a historic
Speaker 1: plaque that referenced this. But then again, I have a
Speaker 1: feeling that Jackyl Island must be the place where they
Speaker 1: make those historic plaques because they are everywhere. So the
Speaker 1: cost for those first three minutes of phone time on
Speaker 1: a typical long distance call between New York and San
Speaker 1: Francisco is twenty dollars and seventy cents in nineteen fifteen dollars. Now,
Speaker 1: in this one, I used the Bureau of Labor Statistics
Speaker 1: because that was late enough for me to do that.
Speaker 1: That's based on the consumer Price Index, so that's the
Speaker 1: general price of goods and services in one year versus
Speaker 1: another year. So based on that twenty and seventy cents
Speaker 1: is about four hundred seventy nine dollars. So that's how
Speaker 1: much it would cost you for three minutes of phone
Speaker 1: time on a call between New York and San Francisco. Yikes.
Speaker 1: Uh So nineteen sixteen was the first year that they
Speaker 1: started testing phone service to Europe. It would not work
Speaker 1: for another little bit. Yeah, and so this phone service,
Speaker 1: you might think, oh, did they lay a really long cable. No,
Speaker 1: the early phone service that would become the Transatlantic phone
Speaker 1: service was based on radio waves, not on a physical cable.
Speaker 1: Nineteen seventeen, that's the beginning of the US involvement in
Speaker 1: World War One. Employees start to volunteer for service during
Speaker 1: World War One, and A T and T develops the
Speaker 1: first air to ground ground to air radio communications systems.
Speaker 1: And that was also in the U S. Government took
Speaker 1: control of a nation's telephone services. They would not give
Speaker 1: it back to its proprietary owners until nineteen nineteen. Yeah,
Speaker 1: it was considered a wartime resource. So getting to nineteen nineteen,
Speaker 1: that's when Bell System first dial telephones. There they are
Speaker 1: released in Norfolk, Virginia. And so before this, like we
Speaker 1: said before, you would pick up a phone, and you
Speaker 1: would speak to an operator who would make the physical
Speaker 1: switching to let you complete your call. The dialing, of course,
Speaker 1: is more what we're familiar with today, unless we've all
Speaker 1: just used the automated settings on our smartphones and don't
Speaker 1: even remember how to dial anymore. But in general, it's
Speaker 1: where you type in the series, or in this case
Speaker 1: they were rotary phones, you would dial literal around the dial.
Speaker 1: Did you ever use a rotary phone? Okay? Just checking.
Speaker 1: That was also the year that Vale retired for the
Speaker 1: second time. He would he would die the following year.
Speaker 1: So in nineteen twenty one, the United States government passed
Speaker 1: the Willis Graham Act, which removed antitrust restrictions to the
Speaker 1: telephone industry. So it's essentially saying open game for for
Speaker 1: a T and T and would acquire over two hundred
Speaker 1: and seven thousand telephones worth of exchanges within the next
Speaker 1: six years after this was passed. It was really again
Speaker 1: to help facilitate that interconnected network of telephone systems, so
Speaker 1: this is continuing the work that was done back in
Speaker 1: nineteen um and it was also so that the United
Speaker 1: States wouldn't be played with hundreds of networks that had
Speaker 1: no inner connectivity. But it also meant that it gave A.
Speaker 1: T and T the ability to really cubment itself as
Speaker 1: a monopoly in the United States. So nineteen twenty two
Speaker 1: was a big year for multiple reasons, and that's the
Speaker 1: year we're gonna end this first episode on A T
Speaker 1: and T launched the w e a F radio station
Speaker 1: in New York, which was the very first radio station
Speaker 1: to broadcast a commercial. It's also the very first radio
Speaker 1: station to broadcast a college football game. Princeton beat University
Speaker 1: of Chicago. On August two, nineteen twenty two, Alexander Graham
Speaker 1: Bell died and on August four, nineteen twenty two, during
Speaker 1: Alexander Graham Bell's funeral, all telephone service was suspended for
Speaker 1: a full minute in memory of Bell. So you know
Speaker 1: you're important when an entire country's communication system shuts down. Yeah.
Speaker 1: So that's a pretty powerful stuff. That wraps up the
Speaker 1: A T and T story. Part one originally published on
Speaker 1: November four, two thousand thirteen. We will be back next
Speaker 1: week to continue this with Part two, and until then,
Speaker 1: if you guys have any suggestions for future topics I
Speaker 1: should cover on tech stuff, send me a message via Twitter.
Speaker 1: The handle is tech stuff h W and I'll talk
Speaker 1: to you again really soon. Y text Stuff is an
Speaker 1: I Heart Radio production. For more podcasts from I Heart Radio,
Speaker 1: visit the i heart Radio app, Apple Podcasts, or wherever
Speaker 1: you listen to your favorite shows.