The Telephone And Its Corporation


The Telephone And Its Corporation Essay, Research Paper

The phone is easily one of man?s most important,

useful and taken for granted inventions. The telephone has outgrown the

ridicule with which it first received, now in most places taken for granted,

it is a part of many people?s daily lives. It marvelously extended the

ways man converses that it is now an indispensable help to whoever would

live the convenient life. All disadvantage of being deaf and mute to any

persons, which was universal before the advent of the telephone, has now

happily been overcome. Before I tell of the history of how the telephone

was constructed and put in to place I will tell of the past of communications.

Ever since the ability of language

and written language the most popular form of communication was done through

a letter. Others were as documented in 1200 BC in Homer?s Illiad were signal

fires. Carrier pigeons were used in the Olympic games to send messages

from 700 BC to 300 AD. In 1791 the Chappe brothers created the Semaphore

system; they were two teens in France who wanted to be able to contact

each other from their different school campuses. This system consisted

of a pole with movable arms, which the positions took the place of letters

of the alphabet. Two years later this idea had caught on and was being

used in France, Italy, Russia, and Germany. Two semaphore systems were

built in the U.S. in Boston and on Martha?s Vineyard; soon Congress was

asked to fund a project for a semaphore system running from New York City

to New Orleans. Samuel Morse told Congress that not to fund the project

because he was developing the electric telegraph. Soon Samuel Morse developed

his electric telegraph he demonstrated it in 1844 it caught on and by 1851

51 telegraph companies were in operation. And it continued to grow to 2250

telegraph offices nationwide. In 1876 Alexander Graham Bell patented the


Alexander Graham Bell was born on

March 3, 1847 in Edinburgh. He grew up deeply involved in the study of

speech due to his father and grandfathers work. He was also a talented

musician able to play by ear from a very early age, and, had he not been

more interested in what his father was doing to help people speak, he might

have ended up as a professional musician. He and his two brothers built

a model human skull and filled it with a good enough reproduction of the

human vocal apparatus, which worked with a bellows, so it would be able

to say, “Ma-ma.” Alexander became a Professor and taught visible speech

he was greatly appreciated for this. Soon he went to work for Thomas Sanders

a successful leather merchant from Salem who had a five-year old deaf son.

Sanders also became a friend and admirer of Bell and his work. At his time

at the Sanders house he was able to do his experiments in the basement

until it became a tad bothersome to Sanders and told him to find a new

place to experiment. So Alexander moved his lab to Charles Williams’ electrical

shop in Boston and employed Thomas Watson together they worked for weeks

to figure out this enigma. Finally after tightly tying a copper string

and plucking it caused a distinct sound on both ends. He applied for a

patent on February 14, 1876 3 hours before Elisha Gray filed a patent for

a similar device. March 7, 1876 the patent was issued three days later

Alexander spoke the famous words after spilling acid on his pants ?Mr.

Watson come here I want you!? In order to distribute this new technology

to the world and humanity a corporation needed to be created.

The business venture to start this

new corporation began before the invention with an agreement between Thomas

Sanders, Gardiner G. Hubbard, and Bell dated February 27, 1875. Formed

as a basis for financing Bell’s experiments, the agreement came to be called

the Bell Patent Association. The only tangible assets of this association

were an early Bell patent, “Improvements in Transmitters and Receivers

for Electric Telegraph,” his basic telephone patent, No. 174,465, an “Improvement

in Telegraphy” (March 7, 1876), and two additional patents that followed.

Publicity was needed Hubbard urged Bell to demonstrate his new instrument

as well as the further improvements Thomas Watson had produced at the Philadelphia

Centennial Exposition that summer. It was hot and muggy in Philadelphia

and not many people were attracted the complex scientific experiment setup.

But Bell had seen an old friend in the party it was Dom Pedro do Alcontara,

the Emperor of Brazil, whom Bell had met several weeks before at the School

of the Deaf in Boston. The emperor was delighted to see an old friend,

for he stopped the entire judging group and lured them over to Bell’s exhibit

just as the group was disbanding for the day. This was most fortunate event

since Bell planned on leaving to Boston to continue his work at the Deaf

school and no one could explain how the phone worked. The judges listened

in amazement as Bell recited all of Hamlet’s soliloquy, and Dom Pedro exclaimed

in wonder, “My God! It talks!?

Just before Mr. and Mrs. Bell left

for Europe for their Honeymoon, on August 4, 1877, the three members formed

the Bell Telephone Company to look after the telephone’s interests. Thomas

Watson was the only full time employee, who was paid $3.00 a day in wages,

and, While Bell sailed to Europe to promote his invention and work with

the deaf, Watson stayed at home. He was the first research and development

arm of the Bell System-forerunner of the vaunted Bell Telephone Laboratories.

Bell Telephone Company worked hard leasing phones but hopes dipped and

Hubbard offered to sell all the Bell patents to William Orton, president

of Western Union Company, for just $100,000. This letter was sent to Hubbard

in response to the offer:

In 1876, Alexander Graham Bell and his

financial backer, Gardiner G. Hubbard, offered Bell’s brand new patent

(No. 174,465) to the Telegraph Company – the ancestor of Western Union.

The President of the Telegraph Company, Chauncey M. DePew, appointed a

committee to investigate the offer. The committee report has often been

quoted. It reads in part:

The Telephone purports to transmit the

speaking voice over telegraph wires. We found that the voice is very weak

and indistinct, and grows even weaker when long wires are used between

the transmitter and receiver. Technically, we do not see that this device

will be ever capable of sending recognizable speech over a distance of

several miles.

“Messer Hubbard and Bell want to install

one of their “telephone devices” in every city. The idea is idiotic on

the face of it. Furthermore, why would any person want to use this ungainly

and impractical device when he can send a messenger to the telegraph office

and have a clear written message sent to any large city in the United States?

“The electricians of our company have

developed all the significant improvements in the telegraph art to date,

and we see no reason why a group of outsiders, with extravagant and impractical

ideas, should be entertained, when they have not the slightest idea of

the true problems involved. Mr. G.G. Hubbard’s fanciful predictions, while

they sound rosy, are based on wild-eyed imagination and lack of understanding

of the technical and economic facts of the situation, and a posture of

ignoring the obvious limitations of his device, which is hardly more than

a toy….

“In view of these facts, we feel that Mr.

G.G. Hubbard’s request for $100,000 of the sale of this patent is utterly

unreasonable, since this device is inherently of no use to us. We do not

recommend its purchase.”

Western Union in 1878 created their

own telephone company after finding out the telephone had uses such as

eliminating the ticker tape machine. This company was called American Telephone

and Telegraph they bought Elisha Gray’s patents and commissioned Thomas

A. Edison to get busy and invent some better telephones. Thomas Edison

invented a telephone transmitter that was far better than anything in use

by the Bell Companies did. It was a very good selling point for the American

Speaking Telephone Company. So Bell Telephone Company needed a man who

could stop Western Union in their tracks. Theodore Newton Vail was hired

by Hubbard to serve as general manager, organizer and promoter. Vail took

action immediately and sent letters to the baby bells saying to keep fighting

for customers and that they had the original patents. Soon Vail attacked

Western Union with Patent Infringement suits and Western Union retreated.

They sold all their phones in 55 cities and stayed out of the telephone

business indefinitely. Later American Telephone and Telegraph was created

once again to become a subsidiary that sold long distance service. In 1899

AT&T took control and became the owner of the Bell Telephone Company.

AT&T started to mature and was constantly changing they way Americans


After Jay Gould of Western Union

died the company started to break apart so AT&T bought Western Union.

Ironically they took control of the company that years before refused to

buy their company. So AT&T became larger and larger then in 1912 entered

Charles Mackay who complained about anti-trust violations in fear that

AT&T had become a monopoly. When WWI came many people cried that the

government should take over the communications and AT&T couldn?t stop

it. This hurt AT&T but by the end of the war they were able to get

out of this most severe regulation. After the Great Depression AT&T

was able to supply many jobs to people as operators and maintenance workers.

Changes had always affected AT&T some good and bad.

The man responsible for the ?dial telephone

system? had a very good reason for getting rid of all the operators who

controlled what calls went out and in. Amon Strowger, the St. Louis undertaker,

became upset on finding that the wife of a competitor was a telephone operator

who made his line busy and transferred calls meant for him to her husband.

“Necessity is the mother of invention” so Strowger developed the dial telephone

system to get the operator out of the system. Many other inventions were

tied to the telephone like the fax machine, the early computer, calculator,

hearing aids, modems and many other valuable items of today. In the

1960?s Bell Labs technologists had been growing increasingly concerned

about the limitations of the national numbering plan which had been adopted

earlier to make Direct Distance Dialing possible. In brief, the numbering

plan divided the United States and Canada into areas, each area equipped

with a different three-digit number which could be recognized by automatic

switching equipment because the second digit was either a one or a zero.

When the numbering plan was first devised it appeared that telephone numbers

would go on forever, without any possible shortage developing. But the

American and Canadian populations began growing at such a rate that the

numbers would run out unless something was done. Since the area codes must

have either a one or a zero in the middle, they could not be added to without

great expense in changing the recognizing equipment. It looked as if something

should be done about individual telephone numbers. Further, others at Bell

Labs had found that push-button telephones, when introduced would be much

easier to use if the numbers could appear all alone on the buttons without

being confused by the addition of letters. A group of very vocal people

hated it. They felt, they said, that they and everyone else were being

reduced to numbers, that computers were dehumanizing American life, that

their heritage was being destroyed and that the Bell System was behind

the whole plot. On November 20, 1974, the Justice Department filed an antitrust

suit against the Bell System charging monopolization and conspiracy to

monopolize the supply of telecommunications service and equipment in America.

Thus began the divestiture of AT&T?s

benevolent domination in the telecommunications market. In December 1981,

after 2 years of attempts to rid ourselves of the antitrust case and to

get appropriate legislation, we started discussions with US. Assistant

Attorney General William F. Baxter about settling the lawsuit. The negotiations

went quickly. Our positions were clear, and we both knew that regardless

of the result, we had to maintain a strong and viable communications industry

for the United States. On January 8, 1982, we jointly announced that the

Justice Department’s lawsuit had been resolved through the Bell System’s

agreement to divest itself of the local exchange portions of its 22 operating

telephone companies. The Justice Department agreed to dissolve the previous

(1956) consent decree and replace it with a new agreement, thereby freeing

AT&T from restrictions on the businesses and the markets it could enter.

I had evaluated the situation in the following way:

A major duty of corporate management is

to make certain the business conforms to public policy. If not, in the

long run, it will not survive. Public policy at that time, however arrived

at, was searching for a change.

The Bell System was perceived by some part

of the public as too big, too powerful, or too pervasive.

The new public policy was intended to make

competition in long-distance services the rule, not the exception.

Time was not in the Bell System’s favor

- opportunities would be missed and it was impossible to plan for the future

until legal, legislative, and regulatory problems were resolved.

To gain access to new markets and retain

access to current markets, the Bell System would have to agree to radical


Acceptance of the Justice Department’s

major demand, the divestiture of local operations via a relatively simple,

broad decree, would leave AT&T free to reorganize on a business basis

as opposed to reorganization detailed by a court or a legislative body.

Of the three options-continuing litigation,

agreeing to crippling legislation or an injunctive decree, or accepting

divestiture of our local telephone companies – the last was the best course

to follow for the public and the stockholders (14,15).

The Justice Department’s goal was to separate

the Bell System’s competitive operations from those that were in the realm

of natural monopoly, that is, the local-exchange businesses. This was a

clean but painful procedure. To retain its vertical structure and gain

freedom to compete and follow its technology into new markets, AT&T

would have to give up its nationwide partnership of companies providing

total, end-to-end communications service. Only then could we lift the cloud

of uncertainty that had hung over the business for most of the past decade.

AT&T thus having agreed to divest three-fourths

of its assets, the Bell System set about the task of restructuring. Seven

regional companies were organized to take over the local exchange operations.

A central services organization, later named Bell Communications Research,

or Bellcore, was created. Owned and operated by the regional companies,

it would provide technical and support services and coordination for national

defense purposes. I set four basic principles to guide the restructuring:

To the extent humanly possible, our service

to all segments of the public win be provided at the same high levels which

have been the hallmark of the Bell System service.

The integrity of the investment of the

3,200,000 owners of the business will be preserved.

The reorganization will be carried out

in such a way as to ensure that the people of the Bell System will have

as much employment security and continued career opportunity as possible.

The divested companies will be launched

with all the management, financial, technical and physical resources necessary

to make them flourishing enterprises in the regions in which they will


I believe we honored all four principles.

At divestiture, which took place January

1, 1984, the date the Bell System ceased to exist, the seven regional companies

handled all local calling, some intrastate long-distance business, customer

access to long-distance networks, as well as directory advertising. They

were permitted also to compete in the provision of new customer premise

equipment. The regional Bell companies were restrained from manufacturing

telephone equipment and entering the bulk of the long-distance business

and some “information” services, but they could, with the permission of

the court, enter other businesses. The “new” AT&T’s business consisted

of long-distance services, services for all customer-terminal equipment

then in place, research and development, and the Western Electric manufacturing

company. AT&T was in competition with every company that chose to enter

its markets, and it was free to enter nearly any new markets it desired.

At this writing, each of the new companies,

divested with a common heritage and common culture, is finding its own

way in the new and exciting age of information. Over time they will establish

individual cultures and heritages while continuing as a part of the network

of communications services for the entire United States. The agreements,

business and personal relationships, and standardized procedures built

up over a century under the integrated Bell System have been replaced by

new, arms-length business contracts.

Some changes have occurred at both levels

of the telecommunications regulatory scheme: states have deregulated certain

services either partially or wholly; the FCC has eliminated the difficult

business separation requirements placed on AT&T in the early 1980s

and moved to replace the unwieldy rate-of-return constraints with price

caps. However, federal and state regulation is still pervasive and is applied

to the telephone companies’ monopoly local exchange business and to AT&T’s

competitive telecommunications services but not to its long-distance rivals.

Moreover, the federal judge who presided

over the trial and the consent agreement regularly makes major decisions

pertaining to compliance with the decree. These decisions sometimes affect

the structure and performance of the industry and the services the American

public receives.

In the relatively short period since the

new companies emerged, many changes in company organization, markets, and

products have taken place. New technologies are being employed to provide

new products and still better service. Change and adaptation – long-standing

characteristics of the Bell System – continue to be central aspects of

the telecommunications industry today.


How a Telephone works now is pretty much

the same as I did in the 1920?s. This is how the handset looks like inside.

As you can see, it only contains 3 parts

and they are all simple:

 A switch to connect and disconnect

the phone from the network. This switch is generally called the hook switch.

It connects when you lift the handset.

 A speaker, which is generally

a little 50 cent 8-ohm speaker of some sort

 A microphone. In the past,

telephone microphones have been as simple as carbon granules compressed

between two thin metal plates. Sounds waves from your voice compress and

decompress the granules, changing the resistance of the granules and modulating

the current flowing through the microphone.

That’s it! You can dial this simple phone

by rapidly tapping the hook switch – all telephone switches still recognize

“pulse dialing” like this. If you pick the phone up and rapidly tap the

switch hook 4 times, the Phone Company?s switch will understand that you

have dialed a 4, for example.

The only problem with the phone shown

above is that when you talk you will hear your voice through the speaker.

Most people find that annoying, so any real phone contains a device called

a duplex coil or something functionally equivalent to block the sound of

your own voice from reaching your ear. A modern telephone also includes

a bell so it can ring and a touch-tone keypad and frequency generator.

A “real” phone looks like this:

Still, it’s pretty simple! In a modern

phone there is an electronic microphone, amplifier and circuit to replace

the carbon granules and loading coil. A speaker and a circuit to generate

a pleasant ringing tone often replace the mechanical bell. But a normal

$6.95 telephone that you buy at Wal-Mart remains one of the simplest devices


The telephone network starts in your house.

A pair of copper wires runs from a box at the road to a box (often called

an “entrance bridge”) at your house. From there the pair of wires is connected

to each phone jack in your house (usually using red and green wires). If

your house has two phone lines, then two separate pairs of copper wire

run from the road to your house. The second pair is usually colored yellow

and black inside your house.

Along the road runs a thick cable packed

with 100 or more copper pairs. Depending on where you are located, this

thick cable will run directly to the phone company’s switch in your area,

or it will run to a box about the size of a refrigerator that acts as a

digital concentrator. The concentrator digitizes your voice at a sample

rate of 8,000 samples per second and 8-bit resolution. It then combines

your voice with hundreds of others and sends them all down a single wire

(usually a coax cable or a fiber-optic cable) to the phone company office.

Either way, your line connects into a line card at the switch so you can

hear the dial tone when you pick up your phone. If you are calling someone

connected to the same office, then the switch simply creates a loop between

your phone and the phone of the person you called. If it’s a long-distance

call, then your voice is digitized and combined with millions of other

voices on the long-distance network. Your voice normally travels over a

fiber-optic line to the office of the receiving party, but it may also

be transmitted by satellite or by microwave towers.


Alexander Graham Bell is known as the

inventor of the telephone in Canada, U.S. and Scotland. Yet other countries

that have no ethnic relation to him try to find inventors in their country.

There is an on going dispute on who invented the telephone first and when

it was put into place. Even in our own country many legal battles have

occurred to show whom the real inventor of the telephone was. At both times

Gray and Bell applied for patents neither phone carried voices Gray?s patent

was just a caveat a work in progress. There are many historians who firmly

believe that Gray, and not bell, invented the telephone. Gray certainly

thought he had invented it. Other suits were filed for the Reis machine,

which was just a primitive device that made weird sounds and unless beaten

it would never carry a voice. 582 lawsuits were filed against AT&T

and Bell and they never lost a case. There is so much information on AT&T

that I would not be able to quantify it in a mere sentence. I?m awe struck

that a corporation can be so influential on the way Americans do normal

everyday activities. AT&T will surely be around for a long time.


(1)Bell System History



A Capsule History of the Bell System

Who really invented the telephone?

Bill’s 200-Year Condensed History of Telecommunications

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