Up until the early 80s, American Telephone and Telegraph enjoyed a monopoly providing telephone service (and products?) in the United States, where by court order the monopoly was broken up into AT&T providing Long Distance, a handful of “Baby Bells” providing local service, and the Bell System, providing maintainence and repair to the infrastructure.
I assume Western Electric was a company subcontracted by AT&T to make the telephones that went into people’s houses, but how did the companies called International telephone and telegraph and General Telephone and Electric figer in prior to the Bell Breakup?
I believe Western Electric was a wholly owned subsidiary of AT&T.
GT&E was an independent phone company. Although AT&T covered most of the US, some areas had their own phone companies even before the breakup. (Not far from here, the Pattersonville Phone Company still servic es a few thousand phones in the 518-887-xxxx exchange). One phone company would provide local service, unless AT&T bought them up, and would connect to AT&T to talk to their customers.
ITT, as its name implied, mostly was involved in international telecommunications. GTE was an independent telecommunications carrier and AT&T’s major competitor for communications services in the US. Western Electric was, as you said, owned by AT&T.
All of Connecticut was serviced by the independent SNET (Southern New England Telephone up until 1998 AT&T only had a minority stake in the co. SBC bought them at that time – or I believe bought the parent company actually. Of course now SBC is AT&T
Old telephone person here, who started his working life at Western Electric.
When AT&T bought up local telcos at the beginning of the 20th century, there were some that they never got to. GTE owned some of them, and some were independent. There was a Rochester telco, IIRC.
IT&T might have been involved with telephony at one time, but by the time of the divestiture they were a conglomerate with little or no telephone content. GTE had a bit more, and manufactured equipment. They actually had a research center in Waltham Mass. as of the early '80s.
The operating companies (and AT&T Long Lines, I suppose) were theoretically free to buy from anyone, but that would not have gone over too well. Western had a culture of absolute quality and reliability. Western was very limited in selling outside of AT&T, due to the consent decree from the '50s.
And everything was done with one eye on the regulators. I took a tour of the Long Distance control room in Bedminster, which used to be a famous scene. It was built to be just fancy enough to impress the regulators, but not so fancy as to make them think money was being wasted.
The OpCos were given a certain rate of return on their capital base. I worked at a research center (the only one in Western Electric) whose goal was to make manufacturing more efficient. It was paradise, since our budget went into the price of equipment, which jacked up capital costs and increased the profit of the OpCos, but regulators could hardly object to Western spending on ways of making equipment cheaper. Once a year the board of Western Electric came to hear what we were doing. They listened to talks in the morning, signed off on the budget, and played golf in the afternoon.
The old Bell System was an interesting place to work for.
Before the breakup, AT&T Subsidiaries (Bell Operating Companies) had monopolies on telephone service in most of the economically significant areas of the United States, but there were actually hundreds, if not thousands of small, independent for-profit telephone companies and non-profit cooperatives operating in mostly rural areas – Ohio, for example, had (and still has) dozens of smaller incumbent local exchange carriers (ILECs), such as the Chillicothe Telephone Co. and the Minford Telephone Co.
And some large metropolitan areas were operated by non-AT&T companies, such as Los Angeles (GTE) and Cincinnati (Cincinnati Bell).
So while AT&T had a legally significant monopoly throughout the country, it wasn’t an absolute monopoly.
That’s local service. There were a few other aspects of the monopoly. For one, other carriers could not resell long distance from the AT&T long lines network. MCI (which stood for Microwave communications) built their own microwave network.
Second, and this was a big part of the trial, third party equipment could not be connected to the network without expensive interfaces, supposedly to protect the network. I’m not aware of any significant problems when third party equipment was finally allowed, after a court decision, IIRC. One could argue that local service was a natural monopoly, but the equipment monopoly really hurt customers. Since equipment was rented to customers, there was an incentive to not churn the market, and to hold down innovation in order to keep customers from turning in their old stuff for new stuff.
GTE, in 1980 at least, owned Sylvania, and made consumer electronics also. I interviewed with a defense branch, and one of the perks was getting the consumer stuff cheap.
Rochester New York (which is something like the third largest city in the state – although a LOOOONG way after NYC) always had its own independent telephone company – Rochester Telephone. Their logo looks nothing like any of the other telephone companies I’ve seen across the US. And they’re not exactly rural.
