A Multidisciplinary Approach
Chapter 7: American Telephone and Telegraph Company
BACKGROUND: THE BELL SYSTEM Since its foundation in 1885, the American Telephone and Telegraph Company (AT&T Corporation) had been owned by the American Bell Telephone Company, also called Bell System. Right from the start, AT&T had been an active player. It tried to strengthen its market position particularly by taking over smaller independent telephone companies. Other links in the chain also attracted AT&T’s interest. An important takeover was that of Western Electric Manufacturing Company by Bell System in 1882. Western Electric manufactured telegraph and telephone equipment and components.1 The takeover of Western Electric brought AT&T an important trump card, which it managed to play smartly. AT&T forbade its subscribers to use their own equipment. Instead, they were forced to rent telephones and, if necessary, other peripherals from AT&T, which, in turn, only offered products manufactured by Western Electric. Many phones made by Western Electric carried the following disclaimer permanently moulded into their housings: ‘Bell System property. Not for sale’. Telephones were also labelled with a sticker marking the Bell Operating Company that owned the telephone. AT&T leased out the phones at a fixed rate per month. In this way, AT&T collected an amount in rent many times higher than the production costs, while the advantage for AT&T increased the longer the rental agreement lasted. The prohibition to use phones of producers other than Western Electric had to be taken seriously. AT&T had inspectors monitor compliance with the prohibition by checking...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.