The People’s Telephone:
by Robert MacDougall
Historians of technology have made the study of systems central to their work, yet rarely have we in-terrogated the idea of system itself. We should not adopt systems as organizing concepts before first investigating systems history and its implications. In the case of the telephone, it is quite clear that popular ideas about technological systems shaped the early development of the phone, and the telephone, in turn, altered the public understanding of systems.
The companies that formed to exploit Bell’s patents—the companies that would become AT&T and its regional subsidiaries—enjoyed a patent monopoly in the United States until 1894, when Bell’s patents expired. The Bell companies now faced a double threat: competition and hostile political action. In response, they audaciously appropriated their enemies’ rhetoric, and, in due time, the “technological populism” that they embraced changed the way Americans thought about networks and networked technology.
The system idea embraced all sorts of activities, organizations, and processes, and construed them as consisting of discrete but interlocking components. By the start of the twentieth century, Frederick W. Taylor and his followers had spread the gospel of system and systematic management to factory, farm, and home. They imagined workers, farmers, and housewives all working together as human cogs in a single, efficient machine.
It is hardly surprising, then, that AT&T and its subsidiaries came to call themselves “the Bell System,” using the term interchangeably to refer to both the physical networks of phones and wires and the corpo-rate system that controlled them. This elision of distinc-tion between the physical and the corporate is impor-tant, because it points to the fact that technological systems, and the idea of systems in general, had political and social implications.
In the late nineteenth century, people invaria-bly associated systems and networks with order, hier-archy, and centralized control. The whole thrust of Tay-lorism shifted authority away from workers and lower-ranking managers toward standard operating proce-dures and predefined rules. Of course, reality did not always live up to the ideal. Undoubtedly there was a lot of ad hoc improvisation and jerry-built organization, and assuredly too, in some ways technologies decen-tralized authority and disrupted existing hierarchies. But the perception and public understanding of these organizations and machines was always one of order and efficiency.
The men who built the Bell System initially embraced this same vision of hierarchy and centralized control. By renting, rather than selling, telephones, the Bell System was willing from the start to forego imme-diate revenue in order to maintain ownership and control of the network. The more than six hundred patent infringement suits the company filed between 1877 and 1893 also demonstrated their will to control the network. Bell also devoted considerable effort into training and controlling its customers.
During the four years after the expiration of the Bell patents in 1894, over a thousand inde-pendent telephone companies sprang up everywhere, often in small towns or rural areas that the Bell compa-nies did not serve, but many more competed directly with Bell.
“The Bell Trust,” as its rivals called it, proved to be a fierce competitor. It slashed prices and expanded rapidly. But the competition expanded too, and by the first decade of the twentieth century, the Bell System was in genuine trouble. AT&T was financially over-extended and hemorrhaging business to its independ-ent competitors. By 1907, Bell’s market share had fallen from 100% to just 49%. In Midwestern states, such as Indiana and Illinois, independent phones out-numbered Bell phones by a factor as high as four or five to one.
Even more frightening to AT&T than competi-tion was the specter of antitrust action and nationaliza-tion. Already, nearly every European state had nationalized its telephone system, and Canada too came close to doing so. In the United States, the American Populist Party platforms of 1892 and 1896 called for nationalizing the telephone. The next decade saw a flurry of state regulation and move-ment by both major parties towards government con-trol. This was the era of muckraking and trust-busting; the threat of political action against AT&T appeared very real.
In 1907, at the nadir of Bell’s financial for-tunes, J.P. Morgan and other Wall Street financiers wrested control of AT&T from the Boston bankers that had owned the company since the 1880s. The new owners installed Theodore Vail, one of Bell’s first general managers, as president. Although the reasons for Morgan’s coup were financial, Vail and his colleagues understood the political and cultural aspects of the firm’s woes. Much of the country distrusted, if not actively despised, the company.
The assault on Bell’s legitimacy had its roots in the Midwest, nourished by hostility to monopoly and Eastern capital. Bell’s competitors gave themselves populist appealing names such as the “People’s Tele-phone,” casting themselves as local Davids against a foreign Goliath. Unease with the classic nineteenth cen-tury ideal of systems also drove hostility toward Bell. To them, AT&T was a sinister concentration of power, “a wire spider, stretching his deadly tentacles” across the plains.
Such was the dilemma that Theodore Vail faced in 1907. He had to promote the Bell System and fight off competitors, while Bell’s major advantages—its size and ubiquity—also were its biggest political liabili-ties. Vail proceeded to streamline Bell’s corporate organization, encourage more scientific innovation within the company, and reverse AT&T’s policy against interconnecting with other networks. However, his first major action as president was the launch of an exten-sive public relations campaign at the heart of which was a long and influential series of magazine ads created by the N.W. Ayer & Son advertising agency.
Walter Gifford, Vail’s successor, observed that the company’s old ways of lecturing and even berating its customers had failed. “We have got not only to be efficient, but we have got to be liked,” he declared.
The campaign that AT&T launched after 1907, however, achieved something fundamentally more important and more powerful than simply portraying the company as being nice. They appropriated the populist rhetoric of some of its most resolute foes.
From trying to control its customers, Bell now talked about empowerment. The ads stressed how the telephone network gave power to all its users. Early Bell executives were openly skeptical that rural or working-class Americans had any real or valid use for telephone service. Now Bell embraced the notion that every American could and should have a telephone. From arguing that an efficient telephone system demanded a single centralized authority, the firm now declared: “Every Bell Telephone is the Center of the System.”
This was a new way of talking about the telephone, as well as a new way of talking about techno-logical networks. It differed manifestly from the classic late-nineteenth-century idea of system. Admiration of order, hierarchy, and control gave way to praise for flexibility, decentralization, and individual empowerment.
This strategy is so common today that one might not recognize how audacious it was in 1907. Inadvertently, AT&T succeeded in promoting a new view of technological systems as flexible, decentralized, and empowering to the individual. This view became the default rhetoric for talking about communication technology in the twentieth century. As rhetoric, it became as influential in its time as the old ideals of hierarchy and control once were. It became the lan-guage amateur operators used to describe wireless and radio during the 1910s and 1920s. It was how RCA and NBC spun television in the 1940s. It also is how we think about computers and the internet today.
In the early twentieth century, AT&T built something besides a continental telephone network. It built a new understanding of networks and systems, and a language of technological populism that has survived and thrived for almost a century to block alternatives to private monopoly and co-opt public criticism of corporate control.