Telephone. In 1876, Alexander Graham
Bell devised the
technology for the electronic communication of the human voice between two points—a technology involving variations in an electric current responding to the sound waves created by human speech.By 1878, a “switchboard” permitted any telephone user to reach any other user in the same network. Further advances in the nineteenth century extended the effective distance of the telephone to hundreds of miles, reduced electrical interference, simplified the instrument, and expanded the number of telephones that could be connected through one exchange. Early twentieth‐century innovations permitted cross‐country and global calls, direct customer dialing unassisted by switchboard operators, and a system that allowed many calls to occupy the same wire simultaneously. Later developments liberated long‐distance calls from wires, first by microwave transmission and then by
satellite communication. Wireless local calling became common near the end of the twentieth century with cellular telephone systems.
Telephone production and service in the United States, unlike elsewhere, remained in the hands of private companies but under government regulation. Bell and his associates formed the ancestral company of American Telephone and Telegraph (AT&T) immediately after the invention of the telephone. By 1880, AT&T had established a patent‐based monopoly. Its Western Electric subsidiary had exclusive rights to manufacture telephones, which AT&T then leased to customers. Only its local subsidiaries could provide telephone service, an expensive luxury used largely by urban businessmen.
In 1893, when AT&T's patents expired, there were four telephones per thousand Americans, with two‐thirds of those in businesses. Shortly afterward, thousands of new enterprises, including small cooperatives, formed to provide local telephone service. Prices dropped sharply and telephone subscription expanded rapidly, particularly in rural areas. By 1907, homes with telephones had multiplied about tenfold, but AT&T now served fewer than half the nation's three million customers. Acquired by the financier J.P.
Morgan in 1907, AT&T bought or bankrupted many competitors. To fend off federal antitrust action, the corporation agreed in 1913 to cease aggressive takeovers and to interconnect its lines with those of competitors. Ultimately, a national system emerged, consisting of a dominant AT&T controlling all long‐distance service and most local service; many small “independents” providing local service in isolated places; and regulatory agencies, state and federal, charged with keeping telephone rates affordable.
In 1984, new antitrust challenges led a federal court to divide AT&T into separate regional companies. It also introduced competition to telephone manufacturing and long‐distance service. Deregulation brought expanded telephone services and reduced the costs of long‐distance calling; basic telephone service, however, now less subsidized, increased in cost.
Telephone companies initially promoted their service as an aid to commerce. Phoning saved trips, sped up transactions, and linked field representatives to central offices. Early telephone marketers paid less attention to home subscribers. In 1900, fewer than 10 percent of American families had telephones, but lower prices had raised that figure to almost 40 percent by 1930. The rate of household‐telephone subscription dropped during the depression of the 1930s but then rebounded to almost 80 percent in 1960 and 94 percent in 1994.
Some commentators have speculated that the telephone may have changed how Americans think and act. However, the best evidence is that the telephone enabled Americans to pursue their characteristic ways of life more efficiently.
See also
Antitrust Legislation;
Business;
Economic Regulation;
Gilded Age;
Internet and World Wide Web;
Telegraph.
Bibliography
John Brooks , Telephone: The First Hundred Years, 1976.
Claude S. Fischer , America Calling: A Social History of the Telephone to 1940, 1992.
Claude S. Fischer
