American Telephone & Telegraph
Encyclopedia
AT&T Corp., originally American Telephone and Telegraph Company, is an American telecommunication
Telecommunication
Telecommunication is the transmission of information over significant distances to communicate. In earlier times, telecommunications involved the use of visual signals, such as beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs, or audio messages via coded...

s company that provides voice, video, data, and Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...

 telecommunications and professional services to business
Business
A business is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit...

es, consumer
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...

s, and government agencies. AT&T is the oldest telecommunications company still in existence. During its long history, AT&T was at times the world's largest telephone
Telephone
The telephone , colloquially referred to as a phone, is a telecommunications device that transmits and receives sounds, usually the human voice. Telephones are a point-to-point communication system whose most basic function is to allow two people separated by large distances to talk to each other...

 company, the world's largest cable television
Cable television
Cable television is a system of providing television programs to consumers via radio frequency signals transmitted to televisions through coaxial cables or digital light pulses through fixed optical fibers located on the subscriber's property, much like the over-the-air method used in traditional...

 operator, and a regulated monopoly
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...

. At its peak in the 1950s and 1960s, it employed one million people and its revenue was roughly $300 billion annually in 2006 dollars.

In 2005, AT&T was purchased by Baby Bell SBC Communications for more than $16 billion ($ in present-day terms). SBC then rebranded itself as AT&T Inc.
AT&T
AT&T Inc. is an American multinational telecommunications corporation headquartered in Whitacre Tower, Dallas, Texas, United States. It is the largest provider of mobile telephony and fixed telephony in the United States, and is also a provider of broadband and subscription television services...

 Today, AT&T Corporation continues to exist as the long distance subsidiary
Subsidiary
A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...

 of AT&T Inc., and its name occasionally shows up in AT&T press releases.

Company formation and expansion

The formation of the Bell Telephone Company
Bell Telephone Company
The Bell Telephone Company, a common law joint stock company, was organized in Boston, Massachusetts on July 9, 1877 by Alexander Graham Bell's father-in-law Gardiner Greene Hubbard, who also helped organize a sister company — the New England Telephone and Telegraph Company...

 superseded an agreement between Alexander Graham Bell
Alexander Graham Bell
Alexander Graham Bell was an eminent scientist, inventor, engineer and innovator who is credited with inventing the first practical telephone....

 and his financiers, principal among them Gardiner Greene Hubbard
Gardiner Greene Hubbard
Gardiner Greene Hubbard was a U.S. lawyer, financier, and philanthropist. He was one of the founders of the Bell Telephone Company and the first president of the National Geographic Society.- Biography :...

 and Thomas Sanders
Thomas Sanders
Thomas Sanders may refer to:* Satch Sanders , retired American basketball player and coach* Thomas Sanders , American football player* Thomas Sanders , Quebec merchant and politician...

. Renamed the National Bell Telephone Company in March 1879, it became the American Bell Telephone Company in March 1880. By 1881, it had bought a controlling interest in the Western Electric
Western Electric
Western Electric Company was an American electrical engineering company, the manufacturing arm of AT&T from 1881 to 1995. It was the scene of a number of technological innovations and also some seminal developments in industrial management...

 Company from Western Union
Western Union
The Western Union Company is a financial services and communications company based in the United States. Its North American headquarters is in Englewood, Colorado. Up until 2006, Western Union was the best-known U.S...

. Only three years earlier, Western Union had turned down Gardiner Hubbard's offer to sell it all rights to the telephone for $100,000 ($ in 2009 dollars).

In 1880, the management of American Bell created what would become AT&T Long Lines. The project was the first of its kind to create a nationwide long-distance network with a commercially viable cost-structure. This project was formally incorporated into a separate company named American Telephone and Telegraph Company on March 3, 1885. Starting from New York, the network reached Chicago, Illinois, in 1892.

Bell's patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....

 on the telephone expired in 1894, but the company's much larger customer base made its service much more valuable than alternatives and substantial growth continued.

On December 30, 1899, the American Telephone and Telegraph Company bought the assets of American Bell; this was because Massachusetts corporate laws were very restrictive, and limited capitalization to ten million dollars, forestalling the growth of American Bell itself. With this transfer of assets, AT&T became the parent of the Bell System
Bell System
The Bell System was the American Bell Telephone Company and then, subsequently, AT&T led system which provided telephone services to much of the United States and Canada from 1877 to 1984, at various times as a monopoly. In 1984, the company was broken up into separate companies, by a U.S...

.

National long distance service reached San Francisco in 1915. Transatlantic services started in 1927 using two-way radio
Radio
Radio is the transmission of signals through free space by modulation of electromagnetic waves with frequencies below those of visible light. Electromagnetic radiation travels by means of oscillating electromagnetic fields that pass through the air and the vacuum of space...

, but the first trans-Atlantic
Transatlantic telephone cable
A transatlantic telecommunications cable is a submarine communications cable running under the Atlantic Ocean. All modern cables use fibre optic technology....

 telephone cable
Submarine communications cable
A submarine communications cable is a cable laid on the sea bed between land-based stations to carry telecommunication signals across stretches of ocean....

 did not arrive until 1956, with TAT-1
TAT-1
TAT-1 was the first submarine transatlantic telephone cable system. It was laid between Gallanach Bay, near Oban, Scotland and Clarenville, Newfoundland between 1955 and 1956. It was inaugurated on September 25, 1956, initially carrying 36 telephone channels.-History:The first transatlantic...

.

A national monopoly

As a result of a combination of regulatory actions by government and actions by AT&T, the firm eventually gained what most regard as monopoly
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...

 status. In 1907, AT&T president Theodore Vail made it known that he was pursuing a goal of "One Policy, One System, Universal Service." AT&T began purchasing competitors, which attracted the attention of antitrust
Antitrust
The United States antitrust law is a body of laws that prohibits anti-competitive behavior and unfair business practices. Antitrust laws are intended to encourage competition in the marketplace. These competition laws make illegal certain practices deemed to hurt businesses or consumers or both,...

 regulators. To avoid antitrust action, in a deal with the government, Vail agreed to the Kingsbury Commitment
Kingsbury Commitment
The Kingsbury Commitment of 1913 established AT&T as a government-sanctioned monopoly, as an out-of-court settlement of the government's antitrust challenge...

 of 1913. One of the three terms of the agreement forbade AT&T from acquiring any more independent phone companies without the approval of the Interstate Commerce Commission
Interstate Commerce Commission
The Interstate Commerce Commission was a regulatory body in the United States created by the Interstate Commerce Act of 1887. The agency's original purpose was to regulate railroads to ensure fair rates, to eliminate rate discrimination, and to regulate other aspects of common carriers, including...

.

G.W. Brock says in The Telecommunications Industry: The Dynamics Of Market Structure, "[The] provision allowed Bell and the independents to exchange telephones in order to give each other geographical monopolies. So long as only one company served a given geographical area there was little reason to expect price competition to take place." AT&T focused on purchasing companies within specific geographic areas that increased its effective control of the telephone system market, while selling its less-desirable and previously acquired companies to independent buyers. Also included in the Kingsbury Commitment was the requirement that AT&T allow competitors to connect through its phone lines. Economists point out that this reduced the incentive of these companies to build competing long-distance lines.

In 1913, after vacuum-tube inventor Lee De Forest
Lee De Forest
Lee De Forest was an American inventor with over 180 patents to his credit. De Forest invented the Audion, a vacuum tube that takes relatively weak electrical signals and amplifies them. De Forest is one of the fathers of the "electronic age", as the Audion helped to usher in the widespread use...

 began to suffer financial difficulties, AT&T bought De Forest's vacuum-tube patents for the bargain price of $50,000 ($ in 2009 dollars). In particular, AT&T acquired ownership of the '', the first triode (three-element) vacuum tube
Vacuum tube
In electronics, a vacuum tube, electron tube , or thermionic valve , reduced to simply "tube" or "valve" in everyday parlance, is a device that relies on the flow of electric current through a vacuum...

, which greatly amplified telephone signals. The patent increased AT&T's control over the manufacture and distribution of long-distance telephone services, and allowed the Bell System to build the United States's first coast-to coast telephone line. Thanks to the pressures of World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...

, AT&T and RCA
RCA
RCA Corporation, founded as the Radio Corporation of America, was an American electronics company in existence from 1919 to 1986. The RCA trademark is currently owned by the French conglomerate Technicolor SA through RCA Trademark Management S.A., a company owned by Technicolor...

 owned all useful patents on vacuum tubes. RCA staked a position in wireless communication; AT&T pursued the use of tubes in telephone amplifiers. Some patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....

 allies and partners in RCA were angered when the two companies' research on tubes began to overlap, and there were many patent disputes.

Around 1917, the idea that everyone in the country should have phone service and that the government should promote that began being discussed in government. AT&T agreed, saying in a 1917 annual report: "A combination of like activities under proper control and regulation, the service to the public would be better, more progressive, efficient, and economical than competitive systems." In 1918 the federal government nationalized the entire telecommunications industry, with national security as the stated intent. Rates were regulated so that customers in large cities would pay higher rates to subsidize those in more remote areas. Vail was appointed to manage the telephone system with AT&T being paid a percentage of the telephone revenues. AT&T profited well from the nationalization arrangement which ended a year later. States then began regulating rates so that those in rural areas would not have to pay high prices, and competition was highly regulated or prohibited in local markets. Also, potential competitors were forbidden from installing new lines to compete, with state governments wishing to avoid "duplication." The claim was that telephone service was a "natural monopoly
Natural monopoly
A monopoly describes a situation where all sales in a market are undertaken by a single firm. A natural monopoly by contrast is a condition on the cost-technology of an industry whereby it is most efficient for production to be concentrated in a single form...

," meaning that one firm could better serve the public than two or more. Eventually, AT&T's market share amounted to what most would regard as a monopolistic share.

AT&T, RCA, and their patent allies and partners finally settled their disputes in 1926 by compromise. AT&T decided to focus on the telephone business as a communications common carrier, and sold its broadcasting subsidiary Broadcasting Corporation of America to RCA. The assets included station WEAF
WEAF (AM)
WEAF is a gospel music formatted radio station in Camden, South Carolina. The station is currently owned by Colonial Radio Group and is licensed to CRG president Jeff Andrulonis. Much of the programing is featured from the Rejoice! Musical Soul Food satellite feed.-History:At one time, this...

, which for some time had broadcast from AT&T headquarters in New York City. In return, RCA signed a service agreement with AT&T, ensuring any radio network RCA started would have transmission connections provided by AT&T. Both companies agreed to cross-license patents, ending that aspect of the dispute. RCA, GE
General Electric
General Electric Company , or GE, is an American multinational conglomerate corporation incorporated in Schenectady, New York and headquartered in Fairfield, Connecticut, United States...

, and Westinghouse were now free to combine their assets to form the National Broadcasting Company
NBC
The National Broadcasting Company is an American commercial broadcasting television network and former radio network headquartered in the GE Building in New York City's Rockefeller Center with additional major offices near Los Angeles and in Chicago...

, or NBC network.

In 1925, AT&T created a new unit called Bell Telephone Laboratories, commonly known as Bell Labs
Bell Labs
Bell Laboratories is the research and development subsidiary of the French-owned Alcatel-Lucent and previously of the American Telephone & Telegraph Company , half-owned through its Western Electric manufacturing subsidiary.Bell Laboratories operates its...

. This research and development
Research and development
The phrase research and development , according to the Organization for Economic Co-operation and Development, refers to "creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of...

 unit proved highly successful, pioneering, among other things, radio astronomy
Radio astronomy
Radio astronomy is a subfield of astronomy that studies celestial objects at radio frequencies. The initial detection of radio waves from an astronomical object was made in the 1930s, when Karl Jansky observed radiation coming from the Milky Way. Subsequent observations have identified a number of...

, the transistor
Transistor
A transistor is a semiconductor device used to amplify and switch electronic signals and power. It is composed of a semiconductor material with at least three terminals for connection to an external circuit. A voltage or current applied to one pair of the transistor's terminals changes the current...

, the photovoltaic cell, the Unix
Unix
Unix is a multitasking, multi-user computer operating system originally developed in 1969 by a group of AT&T employees at Bell Labs, including Ken Thompson, Dennis Ritchie, Brian Kernighan, Douglas McIlroy, and Joe Ossanna...

 operating system
Operating system
An operating system is a set of programs that manage computer hardware resources and provide common services for application software. The operating system is the most important type of system software in a computer system...

, and the C programming language. However, its parent company did not always capitalize on these achievements. In 1949, the Justice Department filed an antitrust suit aimed at forcing the divestiture of Western Electric, which was settled seven years later by AT&T's agreement to confine its products and services to common carrier telecommunications and license its patents to "all interested parties." A key effect of this was to ban AT&T from selling computers despite its key role in electronics research and development. Nonetheless, technological innovation continued. For example, AT&T commissioned the first experimental communications satellite
Satellite
In the context of spaceflight, a satellite is an object which has been placed into orbit by human endeavour. Such objects are sometimes called artificial satellites to distinguish them from natural satellites such as the Moon....

, Telstar
Telstar
Telstar is the name of various communications satellites, including the first such satellite to relay television signals.The first two Telstar satellites were experimental and nearly identical. Telstar 1 was launched on top of a Thor-Delta rocket on July 10, 1962...

 I in 1962.

Public utility
Public utility
A public utility is an organization that maintains the infrastructure for a public service . Public utilities are subject to forms of public control and regulation ranging from local community-based groups to state-wide government monopolies...

 commissions in state and local jurisdiction
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...

s regulated the Bell System
Bell System
The Bell System was the American Bell Telephone Company and then, subsequently, AT&T led system which provided telephone services to much of the United States and Canada from 1877 to 1984, at various times as a monopoly. In 1984, the company was broken up into separate companies, by a U.S...

 and all the other telephone companies. The Federal Communications Commission
Federal Communications Commission
The Federal Communications Commission is an independent agency of the United States government, created, Congressional statute , and with the majority of its commissioners appointed by the current President. The FCC works towards six goals in the areas of broadband, competition, the spectrum, the...

 (FCC) regulated all service across state lines. These commissions controlled the rates that companies could charge, and the specific services and equipment they could offer.

AT&T increased its control of the telephone system through its leasing arrangements for telephones and telephone equipment made by its subsidiary, Western Electric
Western Electric
Western Electric Company was an American electrical engineering company, the manufacturing arm of AT&T from 1881 to 1995. It was the scene of a number of technological innovations and also some seminal developments in industrial management...

. Like most telephones of the time in the United States, Western Electric-made phones were owned not by individual customers, but by local Bell System telephone companies — all of which were in turn owned by AT&T, which also owned Western Electric itself. Each phone was leased from AT&T on a monthly basis by customers, who generally paid for their phone and its connection many times over in cumulative lease fees. This monopoly made millions of extra dollars for AT&T, which had the secondary effect of greatly limiting phone choices and styles. AT&T strictly enforced policies against buying and using phones by other manufacturers that had not first been transferred to and re-rented from the local Bell monopoly. Many phones made by Western Electric thus carried the following disclaimer permanently molded into their housings: "BELL SYSTEM PROPERTY — NOT FOR SALE." Telephones were also labeled with a sticker marking the Bell Operating Company that owned the telephone.

In 1968, the Federal Communications Commission
Federal Communications Commission
The Federal Communications Commission is an independent agency of the United States government, created, Congressional statute , and with the majority of its commissioners appointed by the current President. The FCC works towards six goals in the areas of broadband, competition, the spectrum, the...

 allowed the Carterfone
Carterfone
The Carterfone is a device invented by Thomas Carter. It manually connects a two-way mobile radio system to the public switched telephone network , making it a direct predecessor to today's autopatch....

 and other devices to be connected directly to the AT&T
AT&T
AT&T Inc. is an American multinational telecommunications corporation headquartered in Whitacre Tower, Dallas, Texas, United States. It is the largest provider of mobile telephony and fixed telephony in the United States, and is also a provider of broadband and subscription television services...

 network, as long as they did not cause damage to the system. This ruling (13 F.C.C.2d 420) created the possibility of selling devices that could connect to the phone system and opened up the market to numerous products, including answering machine
Answering machine
The answering machine or message machine, also known as the telephone answering machine in the UK and some Commonwealth countries) and previously known as an ansaphone, ansafone, or telephone answering device is a device for answering telephones and recording callers' messages.Unlike voicemail,...

s, fax machines, cordless phone
Cordless telephone
A cordless telephone or portable telephone is a telephone with a wireless handset that communicates via radio waves with a base station connected to a fixed telephone line, usually within a limited range of its base station...

s, computer modem
Modem
A modem is a device that modulates an analog carrier signal to encode digital information, and also demodulates such a carrier signal to decode the transmitted information. The goal is to produce a signal that can be transmitted easily and decoded to reproduce the original digital data...

s and the early, dialup Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...

.

In the 1980s, after some consumers began buying phones from other manufacturers anyway, AT&T changed its policy by selling customers the phone's housing, retaining ownership of the mechanical components — which still required paying AT&T a monthly leasing fee.

For most of the 20th century, AT&T subsidiary AT&T Long Lines thus enjoyed a near-total monopoly on long distance telephone service in the United States. AT&T also controlled 22 Bell Operating Companies which provided local telephone service
Local telephone service
Local telephone service is the provision of telecommunications networks and services within a limited geographic region.Traditionally, local telephone service was provided by small companies based in given cities and towns as opposed to larger, national or international companies...

 to most of the United States. While there were many "independent telephone companies", General Telephone being the most significant, the Bell System
Bell System
The Bell System was the American Bell Telephone Company and then, subsequently, AT&T led system which provided telephone services to much of the United States and Canada from 1877 to 1984, at various times as a monopoly. In 1984, the company was broken up into separate companies, by a U.S...

 was far larger than all the others, and widely considered a monopoly itself.

Erosion of "a natural monopoly"

For many years, AT&T had been permitted to retain its monopoly status under the assumption that it was a natural monopoly
Natural monopoly
A monopoly describes a situation where all sales in a market are undertaken by a single firm. A natural monopoly by contrast is a condition on the cost-technology of an industry whereby it is most efficient for production to be concentrated in a single form...

. The first erosion to this monopoly occurred in 1956 where the Hush-A-Phone v. United States ruling allowed a third-party device to be attached to rented telephones owned by AT&T. This was followed by the 1968 Carterfone
Carterfone
The Carterfone is a device invented by Thomas Carter. It manually connects a two-way mobile radio system to the public switched telephone network , making it a direct predecessor to today's autopatch....

 decision that allowed third-party equipment to be connected to the AT&T telephone network. The rise of cheap microwave communications equipment in the 1960s and 1970s opened a window of opportunity for competitors — no longer was the acquisition of expensive rights-of-way necessary for the construction of a long-distance telephone network. In light of this, the FCC permitted MCI
MCI Communications
MCI Communications Corp. was an American telecommunications company that was instrumental in legal and regulatory changes that led to the breakup of the AT&T monopoly of American telephony and ushered in the competitive long-distance telephone industry. It was headquartered in Washington,...

 (Microwave Communications, Inc) to sell communication services to large businesses. This technical-economic argument against the necessity of AT&T's monopoly position would hold for a mere fifteen years until the beginning of the fiber-optics revolution sounded the end of microwave-based long distance.

Break up, spinoffs and restructuring

The rest of the telephone monopoly lasted until January 8, 1982, the date of settlement of United States v. AT&T
United States v. AT&T
United States v. AT&T was the antitrust case in the United States that led to the 1984 Bell System divestiture, the breakup of the old American Telephone & Telegraph into the new, seven regional Bell operating companies s and the much smaller new AT&T.In the 1970s, the Federal Communications...

, a 1974 United States Department of Justice
United States Department of Justice
The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries.The Department is led by the Attorney General, who is nominated...

 antitrust
Antitrust
The United States antitrust law is a body of laws that prohibits anti-competitive behavior and unfair business practices. Antitrust laws are intended to encourage competition in the marketplace. These competition laws make illegal certain practices deemed to hurt businesses or consumers or both,...

 suit against AT&T
Bell System divestiture
The Bell System divestiture, or the breakup of AT&T, was initiated by the filing in 1974 by the U.S. Department of Justice of an antitrust lawsuit against AT&T. The case, United States v...

. Under the settlement AT&T ("Ma Bell") agreed to divest its local exchange service operating companies, in return for a chance to go into the computer business (see AT&T Computer Systems
AT&T Computer Systems
AT&T Computer Systems is the generic name for American Telephone & Telegraph's unsuccessful attempt to compete in the computer business. In return for divesting the local Bell Operating Companies , AT&T was allowed to have an unregulated division to sell computer hardware and software.Prior to the...

). AT&T's local operations were split into seven independent Regional Bell Operating Companies
Regional Bell Operating Company
The Regional Bell Operating Companies are the result of United States v. AT&T, the U.S. Department of Justice antitrust suit against the former American Telephone & Telegraph Company . On January 8, 1982, AT&T Corp. settled the suit and agreed to divest its local exchange service operating...

 known as "Baby Bells".

With the American consumer's new ability to purchase phones outright, AT&T and the Bell System lost the considerable revenues earned from phone leasing by local Bell companies. Forced to compete with other manufacturers for new phone sales, the aging Western Electric phone designs still marketed through AT&T failed to sell, and Western Electric eventually closed all of its U.S. phone manufacturing plants. AT&T, reduced in value by about 70%, continued to run all its long distance services through AT&T Communications
AT&T Communications
AT&T Communications - East, Inc. was a holding company for the 23 subsidiaries that provide interexchange carrier and long distance telephone services owned by AT&T.-AT&T Long Lines:...

 (the new name of AT&T Long Lines), although it lost some market share in the ensuing years to competitors MCI
MCI Communications
MCI Communications Corp. was an American telecommunications company that was instrumental in legal and regulatory changes that led to the breakup of the AT&T monopoly of American telephony and ushered in the competitive long-distance telephone industry. It was headquartered in Washington,...

 and Sprint.

A sign that hung in many Bell facilities in 1983 read:
Western Electric
Western Electric
Western Electric Company was an American electrical engineering company, the manufacturing arm of AT&T from 1881 to 1995. It was the scene of a number of technological innovations and also some seminal developments in industrial management...

 was fully absorbed into AT&T as AT&T Technologies
AT&T Technologies
AT&T Technologies, Inc., was created in 1983 in preparation for the Bell System Divestiture, which became effective as of January 1, 1984. It assumed the corporate charter of Western Electric Co., Inc.-Creation:...

, and was divided into several units focused on specific customer groups, such as AT&T Network Systems and AT&T Consumer Products.

After its own attempt to penetrate the computer marketplace failed, in 1991, AT&T absorbed NCR Corporation
NCR Corporation
NCR Corporation is an American technology company specializing in kiosk products for the retail, financial, travel, healthcare, food service, entertainment, gaming and public sector industries. Its main products are self-service kiosks, point-of-sale terminals, automated teller machines, check...

 (National Cash Register), hoping to capitalize on the burgeoning personal computer
Personal computer
A personal computer is any general-purpose computer whose size, capabilities, and original sales price make it useful for individuals, and which is intended to be operated directly by an end-user with no intervening computer operator...

 and Unix
Unix
Unix is a multitasking, multi-user computer operating system originally developed in 1969 by a group of AT&T employees at Bell Labs, including Ken Thompson, Dennis Ritchie, Brian Kernighan, Douglas McIlroy, and Joe Ossanna...

 networked server markets, but was unable to extract lasting financial or technological gains from the merger. After deregulation
Deregulation
Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or...

 of the U.S. telecom industry via the Telecommunications Act of 1996
Telecommunications Act of 1996
The Telecommunications Act of 1996 was the first major overhaul of United States telecommunications law in nearly 62 years, amending the Communications Act of 1934. This Act, signed by President Bill Clinton, was a major stepping stone towards the future of telecommunications, since this was the...

, NCR was divested again. At the same time, the majority of AT&T Technologies and the renowned Bell Labs
Bell Labs
Bell Laboratories is the research and development subsidiary of the French-owned Alcatel-Lucent and previously of the American Telephone & Telegraph Company , half-owned through its Western Electric manufacturing subsidiary.Bell Laboratories operates its...

 was spun off as Lucent Technologies
Lucent Technologies
Alcatel-Lucent USA, Inc., originally Lucent Technologies, Inc. is a French-owned technology company composed of what was formerly AT&T Technologies, which included Western Electric and Bell Labs...

. The industry as a whole had many other reorganizations since the 1990s, both due to deregulation
Deregulation
Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or...

 and because of technological advances reducing demand and pricing power in telecommunications.

In 1994, AT&T purchased the largest cellular carrier, McCaw Cellular, for $11.5 billion and kick-started its cellular division with 2 million subscribers.

In 1995, AT&T purchased long-distance provider Alaska Communications System. FCC approval required the company be run as an AT&T subsidiary rather than a more likely absorption into AT&T Communications
AT&T Communications
AT&T Communications - East, Inc. was a holding company for the 23 subsidiaries that provide interexchange carrier and long distance telephone services owned by AT&T.-AT&T Long Lines:...

, giving the company the AT&T Alascom
AT&T Alascom
Alascom, Inc. d/b/a AT&T Alascom is an Alaskan telecommunications company; specifically, an interexchange carrier . AT&T Alascom is currently a wholly owned subsidiary of AT&T. AT&T Alascom, previously known as Alascom and many other names, was the first long-distance telephone company in Alaska...

 name.

In 1997, AT&T hired former IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...

 executive C Michael Armstrong
C Michael Armstrong
C Michael Armstong is the former AT&T chairman and CEO, who tried to reestablish AT&T as an end-to-end carrier. Unfortunately, due to the dot.com bust and various other issues, he was forced to break the group up in 2001...

 as its chief executive officer
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...

. Armstrong's vision was to change AT&T from a long-distance carrier into a global "telecommunications supermarket
Supermarket
A supermarket, a form of grocery store, is a self-service store offering a wide variety of food and household merchandise, organized into departments...

", eying Internet services for the booming dot-com industry
Dot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...

.

Armstrong's most prominent strategy was buying significant cable television
Cable television
Cable television is a system of providing television programs to consumers via radio frequency signals transmitted to televisions through coaxial cables or digital light pulses through fixed optical fibers located on the subscriber's property, much like the over-the-air method used in traditional...

 assets. After acquiring John Malone's TCI
Tele-Communications Inc.
Tele-Communications, Inc. or TCI was a cable television provider in the United States, for much of its history controlled by Bob Magness and John Malone....

 and Media One (gaining through the latter a 25% share of Time Warner Cable
Time Warner Cable
Time Warner Cable is an American cable television company that operates in 28 states and has 31 operating divisions...

), AT&T was the largest provider of cable television
Cable television
Cable television is a system of providing television programs to consumers via radio frequency signals transmitted to televisions through coaxial cables or digital light pulses through fixed optical fibers located on the subscriber's property, much like the over-the-air method used in traditional...

 in the United States. It intended to use these assets to bridge the so-called "last mile
Last mile
The "last mile" or "last kilometer" is the final leg of delivering connectivity from a communications provider to a customer. The phrase is therefore often used by the telecommunications and cable television industries. The actual distance of this leg may be considerably more than a mile,...

" and break the Regional Bell Companies' access-monopoly of the consumer household for data and telephony services, but the wager was costly, substantially increasing the company's debt. AT&T acquired TCI in a $48 billion all-stock transaction including the assumption of $16 billion of debt. AT&T acquired MediaOne for $54 billion in cash and stock, after a bidding war with Comcast
Comcast
Comcast Corporation is the largest cable operator, home Internet service provider, and fourth largest home telephone service provider in the United States, providing cable television, broadband Internet, and telephone service to both residential and commercial customers in 39 states and the...

.

In 1998, AT&T announced a US$1 billion alliance with BT to offer global voice over IP
Voice over IP
Voice over Internet Protocol is a family of technologies, methodologies, communication protocols, and transmission techniques for the delivery of voice communications and multimedia sessions over Internet Protocol networks, such as the Internet...

 (VoIP) services, called Concert
Concert Communications Services
Concert Communications Services was a $1 billion joint venture, originally launched June 1994 by BT Group and MCI Communications. Portugal Telecom became a partner in 1997....

, sparking rumors of a potential merger. But the parties fought for control of the project and could not even agree on the alliance's name. By mid-2001, customers were being directed to sign contracts with the parent companies, and Concert Communications Services
Concert Communications Services
Concert Communications Services was a $1 billion joint venture, originally launched June 1994 by BT Group and MCI Communications. Portugal Telecom became a partner in 1997....

, as the venture was eventually known, was scrapped in October that year.
In 1999, AT&T acquired the Olivetti & Oracle Research Lab
Olivetti Research Laboratory
The Olivetti Research Laboratory was a research institute in the field of computing and telecommunications founded in 1986 by Hermann Hauser and Andy Hopper.-History:...

, from Olivetti
Olivetti
Olivetti S.p.A. is an Italian manufacturer of computers, printers and other business machines.- Founding :The company was founded as a typewriter manufacturer in 1908 in Ivrea, near Turin, by Camillo Olivetti. The firm was mainly developed by his son Adriano Olivetti...

 and Oracle Corporation
Oracle Corporation
Oracle Corporation is an American multinational computer technology corporation that specializes in developing and marketing hardware systems and enterprise software products – particularly database management systems...

. In 2002, it closed down the research part of the lab.

Also in 1999, AT&T paid US$5 billion to purchase IBM's Global Network business, which became AT&T Global Network Services, LLC. As part of the purchase agreement, IBM granted AT&T a five-year, US$5-billion contract to handle much of IBM's networking needs, and AT&T outsourced some of its applications processing and data management work to IBM. IBM also committed to billing and installation for AT&T's long-distance customers in a 10-year deal valued at US$4 billion; and assumed management of AT&T's data processing centers.

With long-distance rates falling and the market for telecommunications services overall weakening, AT&T could not sustain the debt it had incurred in these ventures. Moreover, the cost of upgrading TCI's equipment to handle two-way communications proved far higher than pre-merger estimates. AT&T undertook a major reorganization in October 2000, moving its mobile phone and broadband units into separate companies, to allow each unit to raise capital independently.
On July 9, 2001, it spun off AT&T Wireless Services
AT&T Wireless Services
AT&T Wireless Services, Inc., founded in 1987 as McCaw Cellular Communications, Inc., and now legally known as New Cingular Wireless Services, Inc., formerly part of AT&T Corp., is a wireless telephone carrier in the United States, based in Redmond, Washington, and later traded on the New York...

 in what was then the world's largest initial public offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...

 (IPO). Later that year it spun off AT&T Broadband
AT&T Broadband
AT&T Broadband was the name of AT&T's cable operations, which were composed of the assets of TCI and MediaOne, Prime Cable, as well as two Comcast cable systems AT&T acquired later in a system swap. Formed in 1999, AT&T Broadband was the largest provider of cable television services...

 and Liberty Media
Liberty Media
Liberty Media Corporation is an American media conglomerate and the control is exercised by company Chairman John C. Malone, who owns a majority of the voting shares....

, which comprised its cable TV
Cable television
Cable television is a system of providing television programs to consumers via radio frequency signals transmitted to televisions through coaxial cables or digital light pulses through fixed optical fibers located on the subscriber's property, much like the over-the-air method used in traditional...

 assets. AT&T Broadband was subsequently acquired by Comcast
Comcast
Comcast Corporation is the largest cable operator, home Internet service provider, and fourth largest home telephone service provider in the United States, providing cable television, broadband Internet, and telephone service to both residential and commercial customers in 39 states and the...

 in 2002, and AT&T Wireless merged with Cingular Wireless
Cingular Wireless
AT&T Mobility LLC is a wholly owned subsidiary of AT&T that provides wireless services to 100.7 million subscribers in the United States, Puerto Rico and the U.S. Virgin Islands...

 LLC in 2004. The merged wireless phone company operated as Cingular until 2007, when it became AT&T Mobility.

In 2004, the U.S. government eliminated equal access regulations that allowed long-distance phone companies to access the networks owned by the regional Bell carriers at fixed rates. This ultimately caused AT&T to move away from the residential telephone business — declaring in the process that it would no longer market residential telephone service. Instead, its residential focus shifted to offering a voice service over a broadband Internet connection called AT&T CallVantage
AT&T CallVantage
AT&T CallVantage was a VoIP telephone service first offered in 2004 by AT&T Corp., upon the heels of its announcement that it would stop seeking traditional local- and long-distance land-line customers....

.

Acquisition by SBC

On January 31, 2005, the "Baby Bell" company SBC Communications announced its plans to acquire "Ma Bell" AT&T Corp. for $16 billion. SBC announced in October 2005 that it would shed the "SBC" brand and take the AT&T brand along with the "T" NYSE
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...

 ticker symbol.

Merger approval concluded on November 18, 2005; SBC Communications began rebranding the following Monday, November 21 as "AT&T Inc." and began trading as AT&T
AT&T
AT&T Inc. is an American multinational telecommunications corporation headquartered in Whitacre Tower, Dallas, Texas, United States. It is the largest provider of mobile telephony and fixed telephony in the United States, and is also a provider of broadband and subscription television services...

 on December 1 under the "T" symbol.

The AT&T headquarters buildings

From 1885 to 1910, AT&T was headquartered at 125 Milk Street in Boston. With its expansion it moved to New York City, to a headquarters on 195 Broadway
195 Broadway
195 Broadway is a 29-story building on Broadway in the Financial District of the New York City borough of Manhattan. It was the longtime headquarters of American Telephone and Telegraph, as well as Western Union for a time. It occupies an entire block on one side of Broadway, running from Dey...

 (close to what is now the World Trade Center
World Trade Center
The original World Trade Center was a complex with seven buildings featuring landmark twin towers in Lower Manhattan, New York City, United States. The complex opened on April 4, 1973, and was destroyed in 2001 during the September 11 attacks. The site is currently being rebuilt with five new...

 site). The property originally belonged to Western Union
Western Union
The Western Union Company is a financial services and communications company based in the United States. Its North American headquarters is in Englewood, Colorado. Up until 2006, Western Union was the best-known U.S...

, of which AT&T held a controlling interest until 1913 when AT&T divested its interest as part of the Kingsbury Commitment
Kingsbury Commitment
The Kingsbury Commitment of 1913 established AT&T as a government-sanctioned monopoly, as an out-of-court settlement of the government's antitrust challenge...

. Construction of the current building began in 1912. Designed by William Welles Bosworth, who played a significant role in designing Kykuit
Kykuit
Kykuit , also known as John D. Rockefeller Estate, is a 40-room National Trust house in Westchester County, New York, built by the oil businessman, philanthropist and founder of the prominent Rockefeller family, John D. Rockefeller, and his son, John D...

, the Rockefeller mansion north of Tarrytown, New York
Tarrytown, New York
Tarrytown is a village in the town of Greenburgh in Westchester County, New York, United States. It is located on the eastern bank of the Hudson River, about north of midtown Manhattan in New York City, and is served by a stop on the Metro-North Hudson Line...

, it was a modern steel structure clad top to bottom in a Greek-styled exterior, the three-story-high Ionic columns of Vermont granite forming eight registers over a Doric base. The lobby of the AT&T Building was one of the most unusual ones of the era. Instead of a large double-high space, similar to the nearby Woolworth Building
Woolworth Building
The Woolworth Building is one of the oldest skyscrapers in New York City. More than a century after the start of its construction, it remains, at 57 stories, one of the fifty tallest buildings in the United States as well as one of the twenty tallest buildings in New York City...

, Bosworth designed what is called a "hypostyle hall," with full-bodied Doric columns modeled on the Parthenon, marking out a grid. Bosworth was seeking to coordinate the classical tradition with the requirements of a modern building. Columns were not merely the decorative elements they had become in the hands of other architects but created all the illusion of being real supports. Bosworth also designed the campus of MIT as well as Theodore N. Vail's mansion in Morristown, New Jersey
Morristown, New Jersey
Morristown is a town in Morris County, New Jersey, United States. As of the 2010 United States Census, the town population was 18,411. It is the county seat of Morris County. Morristown became characterized as "the military capital of the American Revolution" because of its strategic role in the...

.

In 1978, AT&T commissioned a new building at 550 Madison Avenue
Madison Avenue (Manhattan)
Madison Avenue is a north-south avenue in the borough of Manhattan in New York City, United States, that carries northbound one-way traffic. It runs from Madison Square to the Madison Avenue Bridge at 138th Street. In doing so, it passes through Midtown, the Upper East Side , Spanish Harlem, and...

. This new AT&T Building
Sony Building (New York)
The Sony Tower, formerly the AT&T Building, is a tall, 37-story highrise skyscraper located at 550 Madison Avenue between 55th Street and 56th Street in the New York City borough of Manhattan. It was designed by architect Philip Johnson and partner John Burgee, and was completed in 1984...

 was designed by Philip Johnson
Philip Johnson
Philip Cortelyou Johnson was an influential American architect.In 1930, he founded the Department of Architecture and Design at the Museum of Modern Art in New York City, and later , as a trustee, he was awarded an American Institute of Architects Gold Medal and the first Pritzker Architecture...

 and quickly became an icon of the new Postmodern
Postmodern architecture
Postmodern architecture began as an international style the first examples of which are generally cited as being from the 1950s, but did not become a movement until the late 1970s and continues to influence present-day architecture...

 architectural style. The building was completed in 1984, the very year of the divestiture of the Bell System. The building proved to be too large for the post-divestiture corporation and in 1993, AT&T leased the building to Sony
Sony
, commonly referred to as Sony, is a Japanese multinational conglomerate corporation headquartered in Minato, Tokyo, Japan and the world's fifth largest media conglomerate measured by revenues....

, which now owns it.

Divisions

AT&T, prior to its merger with SBC Communications, had three core companies:
  • AT&T Alascom
    AT&T Alascom
    Alascom, Inc. d/b/a AT&T Alascom is an Alaskan telecommunications company; specifically, an interexchange carrier . AT&T Alascom is currently a wholly owned subsidiary of AT&T. AT&T Alascom, previously known as Alascom and many other names, was the first long-distance telephone company in Alaska...

  • AT&T Communications
    AT&T Communications
    AT&T Communications - East, Inc. was a holding company for the 23 subsidiaries that provide interexchange carrier and long distance telephone services owned by AT&T.-AT&T Long Lines:...

  • AT&T Laboratories
    AT&T Laboratories
    AT&T Laboratories, Inc. was the research & development division of AT&T Corporation. It was founded in 1925 as Bell Telephone Laboratories, Inc., following the merger of the research & development divisions of American Telephone & Telegraph and Western Electric.-History:In 1996, most of Bell Labs...



AT&T Alascom
AT&T Alascom
Alascom, Inc. d/b/a AT&T Alascom is an Alaskan telecommunications company; specifically, an interexchange carrier . AT&T Alascom is currently a wholly owned subsidiary of AT&T. AT&T Alascom, previously known as Alascom and many other names, was the first long-distance telephone company in Alaska...

 continues to sell service in Alaska. AT&T Communications
AT&T Communications
AT&T Communications - East, Inc. was a holding company for the 23 subsidiaries that provide interexchange carrier and long distance telephone services owned by AT&T.-AT&T Long Lines:...

 was renamed AT&T Communications - East, Inc. and sold long distance telephone service and operated as a CLEC outside of the borders of the Bell Operating Companies that AT&T
AT&T
AT&T Inc. is an American multinational telecommunications corporation headquartered in Whitacre Tower, Dallas, Texas, United States. It is the largest provider of mobile telephony and fixed telephony in the United States, and is also a provider of broadband and subscription television services...

 owns. It has now been absorbed into AT&T Corp. but its 23 subsidiaries still exist. AT&T Laboratories
AT&T Laboratories
AT&T Laboratories, Inc. was the research & development division of AT&T Corporation. It was founded in 1925 as Bell Telephone Laboratories, Inc., following the merger of the research & development divisions of American Telephone & Telegraph and Western Electric.-History:In 1996, most of Bell Labs...

 has been integrated into AT&T Labs
AT&T Labs
AT&T Labs, Inc. is the research & development division of AT&T, where scientists and engineers work to understand and advance innovative technologies relevant to networking, communications, and information. Over 1800 employees work in six locations: Florham Park, NJ; Middletown, NJ; Austin, TX;...

, formerly named SBC Laboratories.

Nicknames and Branding

AT&T was also known as "Ma Bell" and affectionately called "Mother" by phone phreaks. During some strikes by its employees, picketers would wear t-shirts reading, "Ma Bell is a real mother." It is worth noting too that, before the break-up, there was greater consumer recognition of the "Bell System" name, in comparison to the name AT&T. This prompted the company to launch an advertising campaign after the break-up to increase its name recognition. Spinoffs like the Regional Bell Operating Companies
Regional Bell Operating Company
The Regional Bell Operating Companies are the result of United States v. AT&T, the U.S. Department of Justice antitrust suit against the former American Telephone & Telegraph Company . On January 8, 1982, AT&T Corp. settled the suit and agreed to divest its local exchange service operating...

 or RBOCs were often called "Baby Bells". Ironically, "Ma Bell" was acquired by one of its "Baby Bells", SBC Communications, in 2005.

The AT&T Globe Symbol, the corporate logo
Logo
A logo is a graphic mark or emblem commonly used by commercial enterprises, organizations and even individuals to aid and promote instant public recognition...

 designed by Saul Bass
Saul Bass
Saul Bass was a Jewish-American graphic designer and filmmaker, best known for his design of motion picture title sequences....

 in 1983, has been nicknamed the "Death Star
Death Star
The Death Star is a fictional moon-sized space station and superweapon appearing in the Star Wars movies and expanded universe. It is capable of destroying a planet with a single destructive super charged energy beam.-Origin and design:...

" in reference to Star Wars
Star Wars
Star Wars is an American epic space opera film series created by George Lucas. The first film in the series was originally released on May 25, 1977, under the title Star Wars, by 20th Century Fox, and became a worldwide pop culture phenomenon, followed by two sequels, released at three-year...

. In 1999 it was changed from the 12-line design to the 8-line design. Again in 2005 it was changed to the 3D transparent "marble" design used by the parent company AT&T Inc.
AT&T
AT&T Inc. is an American multinational telecommunications corporation headquartered in Whitacre Tower, Dallas, Texas, United States. It is the largest provider of mobile telephony and fixed telephony in the United States, and is also a provider of broadband and subscription television services...

  This name was also given to the iconic Bell Labs facility
Bell Labs Holmdel Complex
The Bell Labs Holmdel Complex functioned for forty-four years as a research laboratory in basic physics research and was the home of several Nobel Prize winners. The centerpiece of the campus is an Eero Saarinen designed structure that served as the home to over 6,000 researchers...

 in Holmdel, New Jersey, now vacant.

See also

  • International Bell Telephone Company
    International Bell Telephone Company
    The International Bell Telephone Company of Brussels, Belgium, was created in 1879 by the National Bell Telephone Company of Boston, Massachusetts, United States, initially to sell imported telephones and switchboards in Continental Europe....

    , sister company to American Bell Telephone, with its headquarters in Brussels, Belgium

External links

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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