The Telephone And Its Corporation

.. he Bell System charging monopolization and conspiracy to monopolize the supply of telecommunications service and equipment in America. Thus began the divestiture of AT&Ts 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.

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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 restructuring. 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 operate. 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 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 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. (1) How a Telephone works now is pretty much the same as I did in the 1920s. 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 Companys 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 ever. 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. (2) 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 Grays 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 and Bell and they never lost a case. There is so much information on AT that I would not be able to quantify it in a mere sentence. Im awe struck that a corporation can be so influential on the way Americans do normal everyday activities.

AT will surely be around for a long time. Bibliography (1)Bell System History http://www. (2)HowStuffWorks A Capsule History of the Bell System history of the bell system.html Who really invented the telephone? ribute/telephone inventors.html Bill’s 200-Year Condensed History of Telecommunications