Telco Origins – Part 5

The year is almost over and, at this point, I’ll still be telling the history of telco well into 2014.  Bear with me though. It’s an interesting story and I think it helps to explain one of the reasons why the industry now moves so slowly.  It’s as if it has forgotten about its own roots and consistently rapid historical evolution and settled into a monopolistic rut that it can’t seem to shake.

One of the things I hear from customers all the time is about the cost of connections.  As the profit margins for businesses shrink, folks look for their suppliers to respond in kind to help meet the bottom line.  In the early 1900’s, as many of these small telephone companies would veer toward bankruptcy, AT&T would buy them out in order to increase their overall customer base but intentionally refuse to link them as part of its national network.

This increased the costs of an individual call and the company’s profits as well.  By 1914 the United States was the world leader in the number of installed telephones with approximately seven million units.  Only Sweden was anywhere close, finishing a close second.  By 1930 that figure had swelled to almost 20 million units.  Did you know that, in order to make a three minute call between the United States and England in the late 1920's, it required the services of at least eight operators and close to fifteen minutes in order to make the connection?  The true surprise occurred a month later when the caller received a $75 bill for making the call.

It’s hard for those of us with unlimited calling packages and texting to imagine such an expensive proposition and it clearly thwarted many a cross continent romance back in the day.  There's an immediacy in connecting in today's global market and that capability is possible thanks to the advances of telco that followed both the telephone and radio.  More to come….