History of Telecommunications

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History of Telecommunications

• Chapter 3

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History of Telecommunications 1837 Samuel F. B.
Morse invents the telegraph 1838 Telegraph
demonstrated to government. Government declines
to use. 1845 Morse forms a company with private
money to exploit the telegraph. 1851 Fifty
telegraph companies in operation. 1856 Western
Union Telegraph Company formed 1866 Western Union
Telegraph Company was the largest communications
company in the United States. 1876 Patent issued
to Alexander Graham Bell for telephone.
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1876 Bell offers to sell telephone patents to
Western Union for 100,000. Western Union
declines. 1877 Bell Telephone Company
formed. 1878 First telephone exchange with
operator installed. Western Union Telegraph
Company sets up its own phone company, sued by
Bell for patent infringement, gets out of phone
business, and sells network to Bell. 1885
American Telephone and Telegraph Company (ATT)
formed to build and operate long distance lines
interconnecting regional telephone companies.
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1893-94 Original Bell patent expires independent
telephone companies enter market. 1907 First
state regulatory agencies established in New York
and Wisconsin. 1910 Mann-Elkins Act. Placed all
telephone companies doing interstate business
under the control of the Interstate Commerce
Commission (ICC). First step toward regulation
in telecommunication industry. 1911 Bell
Telephone franchise companies reorganize into
larger organizations known as the Bell Associated
Companies. Beginning of the Bell System.
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1913 Kingsbury Commitment. Independent companies
complained to federal government about ATTs
practices. ATT agreed to dispose of its Western
Union stock, get approval before acquiring
additional independent telephone companies, and
allow all independent telephone companies to
interconnect to its services. Importance set
the telecommunications system on a course to
universal service. 1913 Invention of the vacuum
tube.
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1921 Graham Act. Federal government recognized
and legitimized ATTs monopoly. Did the same
for independent telephone companies in their
geographical locations. This was to ensure the
building of a nationwide and nonoverlapping
telephone network covering the entire country.
1934 Communications Act of 1934. FCC was
established. Federal Communications
CommissionIts sole purpose was to regulate the
communications field.
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It has power to regulate all interstate
telecommunications facilities and services as
well as international traffic within the United
States. It also controls the radio and
television broadcasting industry. Tariffs All
regulated telecommunications services and the
rates to be charged are called tariffs. 1941
First marriage of computer and communication
technology. 1943 Development of submersible
amplifier/ repeaters. 1947 Invention of the
transistor.
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1948 Hush-a-Phone Case. Company developed a
device that could be placed over the transmitting
part (microphone) of a telephone handset to block
out background noise. ATT did not approve. FCC
voted in favor of ATT. In 1956 the appeals
court overturned FCCs decision indicating the
placement of the device would not harm ATTs
network. Significant impact because it opened the
door for other companies to attach devices to the
telephone network. 1949 US Dept. of Justice sued
ATT for violation of the Sherman Antitrust Act.
Wanted to separate Western Electric Company,
manufacturing arm of ATT, from the rest of ATT.

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1956 ATT Consent Decree. In 1956 suit was
settled which entitled ATT to keep Western
Electric with the restriction of producing only
communications equipment (telephone related).
This kept ATT and the Bell System companies out
of the computer industry. 1956 First
trans-Atlantic telephone cable installed. 1957
First satellite launched. 1968 Carterfone
Decision. Wanted to attach its Carterfone
product to the public telephone network. ATT
decline. Carterfone sued and won.
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Opened the door for the attachment of
nontelephone company devices to the telephone
network. This has become known as the
interconnect industry. 1969 MCI Decision.
Microwave Communications Incorporated was allowed
to provide intercity telecommunications links to
organizations that wanted to lease them on a
full-time basis of their exclusive use. Opened
the door to network services. Companies other
than ATT could create their own
telecommunications networks and attach to the
public networks where needed. Southern Pacific
was first company outside
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Bell System to offer coast-to-coast alternative
service. These companies became known as other
common carriers (OCCs) or specialized common
carriers (SCCs)these terms not used
anymore. 1971 Computer Inquiry I (CI-I).
Determined that the computer industry was not
subject to FCC control. 1971 Open Skies Policy.
FCC reversed previous decision and declared that
with few restrictions anyone could enter the
communications satellite business.
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1981 Computer Inquiry II (CI-II). FCC decreed
that 1. computer industry could transmit data on
an unregulated basis 2. the Bell System was
allowed to participate in the data processing
industry 3. Customer premise equipment and
enhanced services would be deregulated and
provided by fully separate subsidiaries of the
carriers and 4. Basic communications services
would remain regulated. The 22 Bell Operating
Companies (BOCs) and ATT organized new
subsidiary companies to handle unregulated
products and services.
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1982 Modified Final Judgment. Completion of
eight-year anti-trust suit against ATT by
federal government. It decreed the following.
1984. Divestiture. January 1, 1984, ATT would
divest itself of all 22 of its associated
operating companies in the Bell System, such as
Michigan Bell Telephone Company, Pacific Bell
Telephone Company, and Southwest Bell Telephone
Company. These companies became known as Bell
Operating Companies (BOC). The Bell name was
reserved for use of the divested operating
companies.
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Specifically prohibited cross-subsidization and
essentially stated that each service must pay for
itself. 1986 Computer Inquiry III (CI-III). FCC
conducted study to determine how and to what
extent the carriers could offer enhanced
services. FCC ordered that the BOCs and ATT
could offer unregulated, enhanced services if the
companies agree to a complex set of provisions
called open network architecture (ONA). Such
companies at GTE were exempt from this order.
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1996 Telecommunications Act of 1996. The first
comprehensive rewrite of the Communications Act
of 1934, changed the ground rules for competition
and regulation in virtually all sectors of the
communications industry. The 22 Bell companies
that had been divided into seven regional
corporations were now allowed to offer long
distance service outside of their regions
immediately, and inside their regions after
certain steps were taken to ensure competition.
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They were also allowed to manufacture
telecommunications equipment. ATT, MCI, and
Sprint were allowed to offer local telephone
service. Telephone companies were permitted to
offer cable television services. Relaxed the
rules regarding radio and telephone broadcasting
stations. Created criminal penalties for
knowingly transmitting material considered to be
indecent to minors over the Internet. Made it a
crime to make any computer network transmission
with intent of harassing the recipient.