When Was AT&T Founded?

AT&T’s story runs parallel to the emergence of the telecommunications industry in the United States. The firm has evolved in tandem with the growth of modern America, starting from its beginnings in the invention of the telephone to its monopolistic actions for much of the twentieth century, all the way to its current position as one of the world’s most prominent companies in telecommunications. Let us know When Was AT&T Founded?

When Was AT&T Founded?

Formerly known as the American Telephone and Telegraph Company (1899-1994) this multinational telecommunications conglomerate is headquartered in Dallas, Texas, USA. The company is responsible for the development of a majority of the United States’ telephone network, both local and long-range, and has been a household name in the industry for a long time.

The origins

The origin of this industry giant dates back to the 19th century in the year of 1877. In the year 1877, Alexander Graham Bell patented the telephone for the first time. In the same year, Bell along with his father-in-law, Gardiner Greene Hubbard, established the Bell Telegraph Company. This paved the foundations for the making of AT&T. The Bell Telegraph Company changed its name after a few years to the American Bell Telephone Co. 

Establishment of AT&T

American Bell instituted the American Telephone and Telegraph Co. in 1885 as its subsidiary. It was responsible for building long-distance telephone lines. This was the first time the name “AT&T” came into the equation. In 1889 AT&T was declared as the parent company of the Bell system.

The early years

The expiration of the Bell Company’s telephone patent in 1894, was met with increasing competition from independent companies in the telecommunications industry. Theodore N. Vail, who had served as the general manager from 1878 to 1887 for the company, returned to AT&T as president in 1907. He retired in 1919, and throughout his tenure, he was focused on establishing an AT&T monopoly in the telecommunications industry. In 1910, he merged the Bell-affiliated companies into state and regional organizations, acquired several formerly autonomous businesses, and took control of Western Union.

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The first antitrust lawsuit

Till 1913, it was smooth sailing as the company grew leaps and bounds. However, AT&T faced its first antitrust lawsuit in 1913. The corporation struck a settlement with the Justice Department known as the Kingsbury Commitment, in which it divested Western Union while simultaneously allowing other telephone businesses to utilize AT&T’s network. The agreement also stipulated that AT&T would need government clearance before purchasing competitors. One could argue that this acquisition helped AT&T maintain its monopoly status due to its sheer size and control of the telephone grid.

The AT&T monopoly

AT&T, as a “natural monopoly,” pledged to offer long-distance service to all independent telephone companies in a commitment originally made in 1913 and reaffirmed by the Graham-Willis Act of 1921. By 1939, AT&T had 83 percent of all telephones in the United States, 98 percent of all long-distance telephone lines, and 90 percent of all telephone equipment. The Justice Department filed a Sherman Antitrust Act complaint against AT&T in 1949. The attempt was mainly aimed at removing Western Electric from the AT&T System. The litigation ended in 1956 with the outcome of limited monopolistic rights but AT&T managed to retain Western Electric in the system.

The second antitrust lawsuit

The United States filed a second antitrust lawsuit in 1974 to dismantle the Bell System. In 1982, negotiations between AT&T and the US Department of Justice led to the verdict under which AT&T would divest itself of 22 regional operation companies that would operate local telephone networks as discrete organizations

AT&T remained the country’s leading long-distance telephone service provider despite the verdict of the second antitrust lawsuit. Bell Telephone Laboratories, the company’s research, and development department, and its Western Electric division, which manufactured telephones and other equipment, were also kept. Furthermore, the corporation was permitted to compete in previously prohibited industries such as data processing and computer communications. 

The aftermath of deregulation by the Federal Government

In 1996, AT&T split its operations into three distinct firms to compete more effectively in an American telecommunications industry that had just been deregulated by the federal government. The AT&T Corporation is the largest of these and continues to offer long-distance telecommunications services. Lucent Technologies Inc., a second firm, manufactured and sold telephones, network switching equipment, computer chips, and other hardware, as well as acquiring most of Bell Laboratories. The NCR Corporation was the third corporation. The self-imposed disintegration of AT&T was the world’s largest corporate breakup. 

Concluding Remarks

AT&T provided the USA with the world’s largest, most modern, and effective telecommunications network. During the twentieth century, the corporation was responsible for most of the significant technological improvements in the telecommunications industry. AT&T was a frontrunner in the development of transoceanic radiotelephone lines and telephone cable systems, as well as the development of early-warning radar systems for the US Department of Defense and the development of the Telstar satellite communications system. It has truly contributed immensely to the US as well as the telecommunications industry.

When Was AT&T Founded?

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