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AT&T: The Company Behind the Telephone


Undoubtedly, one of the greatest inventions
of the 19th century was the telephone, and it is safe to say that the world would not
be the same without it. That’s why today we’ll be exploring the
company that built the American telephone system and that remains the world’s largest
telecom business to this day, AT&T. This video is brought to you by Tab for a
Cause, a free browser extension that donates money to charity with every new tab open without
costing you a single dime. While there is some controversy over the true
inventor of the telephone, it is Alexander Graham Bell that was awarded the patent and
it was his company that would go on to spread it across America.
The phone came to life on March 10, 1876 and the first phrase ever whispered down the wires
was “Mr. Watson, come here. I want to see you”, spoken by Bell to his assistant.
Just a year later, he had already found several financiers to back his invention, including
J. P. Morgan, and thus in 1877 they set up the Bell Telephone Company and then the New
England Telephone company in 1878. Their model was to license the telephone to
local operating companies around Chicago, Boston and New York.
Bell himself was much more focussed on his work as an inventor and by 1879, he had sold
his share in both companies to a group from Boston, who consolidated the two parts into
the National Bell Telephone Company. If all these different names sound confusing,
well, I see your point, but the real history of AT&T is all about whether it’s one company
or many. If you look at the largest telecom businesses
in the world, you’ll see that most of them were state-run telephone operators.
China Mobile, Deutsche Telekom, Telefonica; all these and others started out as government
entities that were originally run by the post office.
But the US never had a state run phone operator, partly because it goes against the nature
of American values, but also because, for America, the telephone service was a business
first and utility second. So, why did the Bell company license out the
operating service rather than building it’s own networks and having complete control?
It’s not like they had any rivals and they did own the patent.
In short, it was simply a matter of time and capital.
Bell’s patents weren’t indefinite, so the Bell company had a limited time to cover
as much area as possible, before competitors could pop up.
By licensing, it could avoid spending the millions of dollars necessary to set up the
telephone service in a new area. Instead, it gave 5- to 10-year contracts to
independent operators, who would pay the Bell company $20 per phone per year and then also
give it the right to buy the operator’s property once the contract was over.
It was actually a pretty sweet deal: the company didn’t have to invest a single dime in telephone
lines and would get a fixed income, with which to buy out the operator in less than a decade.
But Bell had a more important place to spend its money, so in the end the company only
bought about a 30-50% stake in most operators. So what was this other project Bell was investing
in? Well, part of the deal with the operators
was that they could expand in their own territory, but could not link up with other operators,
regardless of whether they were a part of the Bell system.
This meant that there was no effective way to make long-distance calls, and this is what
the Bell company was interested in. It was the only company rich enough to build
its own network of long-distance telephone lines, and although in doing so it ended up
with a ton of debt, it now had a complete monopoly on the long-distance phone service.
The Bell company set up a subsidiary to manage this new network in 1885, and it called it
the American Telephone and Telegraph Company, or AT&T for short.
Over time, the long-distance network would become the backbone of the Bell company.
Even after all of Bell’s patents had expired, AT&T were the only company that could provide
service across the whole nation. Of course, local independent operators started
popping up left and right and by 1907, they actually ran just over half of America’s
telephones. By that point, around 20% of American homes
had a telephone, so there was a lot of demand for the service.
But while you could use your local operator to call your boss or shout complaints at the
mayor, but the only way to make calls outside the city, was through AT&T.
Of course, this early network wasn’t particularly good: the service quality was downright abysmal,
not to mention the customer support. Because of this public relations crisis and
AT&T’s immense debt, J. P. Morgan was able to take control of the company and to instate
his own man, Theodore Newton Vail, as president. He set about restoring AT&T’s image, and
also decided to invest heavily in research and development, setting up the now-famous
Bell Laboratories in 1925. Bell Labs, by the way, is now owned by Nokia
and it’s been one of the world’s leading scientific institutes for almost a century.
It is responsible for 8 Nobel Prize winning works, including the creation of the transistor,
the “C” programming language, and the discovery of cosmic background radiation,
one of the key pieces of evidence for the Big Bang Theory.
But back to AT&T. By the start of the Second World War, they
had $5 billion in assets, which was light years ahead of any other competitor.
Thanks to aggressive acquisition tactics, they controlled a huge majority of US phones
and ran 98% of long distance lines. They played a big part in the war effort,
thanks to the research done through Bell Labs and Western Electric, an early phone manufacturer
who they had purchased in 1881. The war effort paid off for them too, since
it caused a big jump in long distance calls, which continued even after the fighting was
over. After the war came the space race, where Bell
Labs was once again a major player, this time with satellite technology.
Their communications satellite Telstar 1 was the first to relay television and telephone
calls through space, as well as giving the first transatlantic live feed.
They worked hand in hand with NASA, but despite their heavily involvement with the government
on research and development, there were some big question marks over their business practices,
especially around how they controlled the telecoms market.
An agreement was signed in 1956 that limited AT&T to the telephone business alone and that
also required it to license its patents to anyone who was interested.
In 1968, a further ruling by the FCC forced AT&T to allow third parties to connect to
their network, in an aim to stop their monopoly over the long-distance telephone lines.
This eventually lead to the creation of the answering machine, the fax machine and the
modem so, see, the FCC wasn’t always bad. But even after giving away access like that,
AT&T still had huge power over the network, and so the government fought a long and bitter
battle in the courts that would take 8 years to settle.
Finally, in 1982, United States v. AT&T ended with the breakup of the AT&T network, or Bell
System as it was called, on antitrust grounds. A total of seven independent companies were
carved out of the former AT&T, leaving it a shell of its former self.
These new companies came to be known as the Baby Bells.
Two of them went on to become Verizon. Another one, called Southwestern Bell Corporation,
eventually bought up three of the other Baby Bells and the weakened AT&T itself.
In the end, although most of the Baby Bells ended up back together, the breakup did give
them a unique opportunity. You see, the 1956 agreement that made AT&T
stick to telephone business had prevented them from entering the computer market.
So, after 1982, while AT&T did lose power over regional networks, they kept the long
distance operations and, most importantly, could finally take a bite at computers…no
pun intended. Of course, it wasn’t easy and the next 20
years saw the company constantly changing strategies in order to keep up with the lightning
pace of development happening in the computer industry.
Its long distance operations were slowly eroded, partly through new legislation, but also thanks
to the development of fibre optics, which, coincidentally, was inspired by Alexander
Graham Bell’s photophone that had transmitted a voice message using light, all the way back
in 1880. By 2005, when Southwestern Bell Corporation
finally bought its former parent for $16 billion, AT&T was like roadkill picked apart by buzzards.
Only their consumer and business services had remained; their Wireless, Broadband and
telephone systems were gone, not to mention Bell Labs.
So, the AT&T we know today is really the work of SBC, simply rebranded under this more famous
name. Today, the company’s new direction is wireless.
Through a series of acquisitions, AT&T became the second largest cellular provider in the
US, just barely behind Verizon. In 2015 they also acquired DirecTV, a satellite
television service providing some of the biggest channels such as ESPN, HBO, and numerous major
news networks. They spent almost $50 billion to get it, but
of course the real elephant in the room is AT&T’s planned acquisition of Time Warner.
It’s not very clear whether US regulators are gonna approve it, but if they do, the
combined company would be the second largest broadband provider in the US.
On top of that it would also have ownership of Warner Bros, DC Comics, CNN and a bunch
of other major properties. Naturally, monopoly concerns have been raised
by pretty much everyone, but this time around AT&T have definitely learnt their lesson.
Since 2015, they have spent close to $30 million on political donations and today they have
over a hundred registered lobbyists. It’s pretty obvious that AT&T really want
this deal to go through, but for now we’ll just have to wait and see what happens.
Now, before you click off this video and open a new tab, I want you to check out Tab for
a Cause. It’s a free browser extension that modifies
your new tab page so that every time you open a new tab, you raise between a tenth and a
third of cent for your favorite charity. That might not seem much, but it actually
adds up. In fact, so far Tab for a Cause has raised
almost $400,000 for charity. This week they’re focusing on Puerto Rico,
which as you know was hit very badly by Hurricane Maria and will likely remain without power
for months to come. With Tab for a Cause you can help the recovery
of Puerto Rico, and numerous other charities across the world, by simply browsing the web
as you’ve always done. When it comes to charity, every little bit
helps, and collectively we can make a big difference.
That’s why I want you to visit the link in the description and to download their free
browser extension. I’d love to hear which charities you’ll
be supporting, so do let me know on Reddit, Twitter or Facebook.
Thanks for watching, and a big thank you to all our patrons for supporting us, and as
always: stay smart.

Robin Kshlerin

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100 COMMENTS

  1. GoodDay Posted on October 8, 2017 at 4:24 am

    7:01 omg same modem I use now with my dial up aol

    Reply
  2. mustard roshi Posted on October 8, 2017 at 1:16 pm

    Do mercedes

    Reply
  3. mustard roshi Posted on October 8, 2017 at 1:16 pm

    Do bugatti

    Reply
  4. mustard roshi Posted on October 8, 2017 at 1:16 pm

    Do koinsseg

    Reply
  5. Basit Saliu Posted on October 11, 2017 at 2:39 am

    Great Video. I cannot wait for AT&T owning Warner Brothers. Long Live AT&T!

    Reply
  6. Finndus Posted on October 12, 2017 at 2:47 pm

    ehm Philipp Reis invented the telephone😅

    Reply
  7. RoScFan Posted on October 16, 2017 at 7:47 am

    Those lobbyists are not something to just present with cute music in the back ground… they are THE thing making the US and the world crap. Death to corporate lobbying! Death to mergers! Death to oligopolis!

    Reply
  8. steven ha Posted on October 17, 2017 at 9:23 pm

    Just clarify that China mobile are the biggest telecoms provider in the world

    Reply
  9. Shitty Anime Lover Posted on October 19, 2017 at 6:57 pm

    .. why was there a felis at 2:21

    Reply
  10. Blake Buell Posted on October 20, 2017 at 10:55 pm

    Didn't spectrum buy TimeWarner?

    Reply
  11. Mr. Krabs Choking to Death Posted on October 30, 2017 at 5:36 am

    TimeWarner is a media company. Time Warner Cable was merged into Charter Communications and would not be acquired by AT&T.

    Reply
  12. Joseph Lucas Posted on November 1, 2017 at 6:27 pm

    This video gave me motion sickness.

    Reply
  13. The Bright Pixel Posted on November 29, 2017 at 12:39 pm

    Watched the whole video and still had to google what AT&T stands for at the end lol

    Reply
  14. Rizonzzz Dux Posted on December 11, 2017 at 3:38 pm

    Well done on 200k sub m8

    Reply
  15. J Briones Posted on December 13, 2017 at 12:53 pm

    Awesome work man! Make one about bimbo

    Reply
  16. Straightail Posted on March 6, 2018 at 4:33 pm

    actually the reason Att is in wireless is becauae they purchased Cingular Wireless in 2007, the aqquisition caused Controversy in their NASCAR sponsorship becauae Cingular was grandfathered in, at the time Sprint-Nextel sponsored the cup series and blocked competitors, its gone now because Monster Energy drink took over title sponsorship a year ago

    Reply
  17. jm Morgenstern Posted on March 26, 2018 at 10:47 pm

    Hello I think you're wrong because my bell in the olden days I'm talking about the My Bell everything until the Monopoly got broken up here in the United States my bell or Bell systems are known by many people everything everything and that was known to many people as my bell

    Reply
  18. jm Morgenstern Posted on March 26, 2018 at 10:48 pm

    This person who made this video made this video obviously didn't do their homework and should do their homework and redo the entire video from scratch because again my bail back in the day own the entire telephone system in the United States back in the day

    Reply
  19. Jonathon Gillis Posted on April 7, 2018 at 12:38 pm

    Until I stumbled on this video, I never knew what AT&T stood for.

    Reply
  20. Maen Marashdeh Posted on April 11, 2018 at 3:43 pm

    What they need to do is split google and Facebook into
    Facebook= Instagram, what’s app, and Facebook
    Google= Android, Youtube, and google

    Reply
  21. Hazel Eyes Posted on April 11, 2018 at 8:09 pm

    I left spectrum for At&t and I truly regret doing so. My wifi doesn't work have the time. My cable is constantly freezing. Movies that I recorded won't play because the modem needs rebooted most of the time. WHAT THE HELL IS GOING ON? And im in the contract for a year and I can't just get out of it. SMH!

    Reply
  22. Tobin Ford Posted on April 12, 2018 at 6:49 pm

    The most anti consumer company in America.

    Reply
  23. QTee Posted on April 24, 2018 at 8:12 pm

    They suck! Always trying rip your ass off

    Reply
  24. kgonepostl Posted on May 3, 2018 at 3:07 am

    These huge acquisitions have me very concerned.

    Reply
  25. CRAFT IT Posted on May 3, 2018 at 8:07 pm

    We want a video on Mars…..and TATA

    Reply
  26. Mental Dissabled Weeaboo Posted on May 13, 2018 at 7:43 am

    Never heard of ot

    Reply
  27. Mohammad Shali Posted on May 18, 2018 at 1:31 pm

    Do one on jp Morgan pls

    Reply
  28. Hello World Posted on May 20, 2018 at 12:23 am

    And, I got a T-Mobile ad before the video

    Reply
  29. jose cruz Posted on May 20, 2018 at 1:58 pm

    pert-toe rico lol

    Reply
  30. Seb Santiago Posted on May 22, 2018 at 10:13 pm

    Just found this channel when I googled Monsanto. Keep up the great work

    Reply
  31. UnrealProductions Posted on May 31, 2018 at 10:46 pm

    Too bad Verizon is faster

    Reply
  32. American guy Posted on June 4, 2018 at 11:49 pm

    AT&T sucks completely. All that terrorist AT&T do is mistreat me by not letting me use my iPhone for absolutely any purpose when it’s not connected to a WiFi, try to dominate the phone and internet industry, get lawsuits launched against AT&T, and finally take over America in order to destroy t-mobile and sprint just to rule with an iron fist. I can’t wait to see AT&T die and ill be at their funeral dancing and laughing at their demise for mistreating me too many times.

    Reply
  33. Panchito Posted on June 7, 2018 at 3:44 am

    At&t sucks ass

    Reply
  34. RekoMatic Posted on June 9, 2018 at 4:58 am

    My dad was a higher up for bellsouth and I remember when at&t bought them back he was pissed because they wanted to completely get rid of the district he was in charge of (central florida)

    Reply
  35. Spongetanious The PBS Fanatic Posted on June 14, 2018 at 1:54 am

    June 12th happened…..the merger is a reality

    Reply
  36. Jody Eades Posted on June 18, 2018 at 12:58 pm

    Will be canceling AT&T and direct tv. Do not want to be affiliated with the embarrassing CNN.

    Reply
  37. Kang Xi Posted on June 20, 2018 at 9:27 am

    Message from the Future, the deal was approved!!!!!

    Reply
  38. John Johnson Posted on July 15, 2018 at 3:27 pm

    Donate to charities like 3rd world countries, so the Jews that run AT&T, can use this charitable money to build and rebuild infrstructure, which will make it easier for them to exploit, rob & pillage, using public donations/taxes, etc.

    Reply
  39. Felix Bruyns Posted on July 15, 2018 at 3:31 pm

    The Company that STOLE the Telephone. Read how Bell stole Elisha Gray's liquid transmitter idea AND Bell's lawyer rigged the patent office to boot. You could say it was Gray, or possibly give an honorable shout out to Meucci, who probably would have done it if he hadn't been broke, but there's nothing honorable about the great Bell swindle.

    Reply
  40. Bjswac Posted on July 17, 2018 at 8:21 pm

    I can't believe someone who knows so much about the history of government regulations would still use Ajit Pai as a bad example of the FCC. First time in history that the FCC cut regulations and you people still think the indian is the bad guy…

    Reply
  41. Don Walker Posted on July 19, 2018 at 2:28 pm

    Sirs, You method of scanning the picture around made me dizzy and I have spot watching your video. Your content is very interesting but the cost of watching is too high for me. Sorry

    Reply
  42. mystiquemetal Posted on July 23, 2018 at 5:57 pm

    so far there isn't any Tmobile history videos anywhere

    Reply
  43. Larry David Posted on August 19, 2018 at 6:59 am

    Were taught in Canada that Alexander Graham Bell is from up here not the US😁

    Reply
  44. Margaret Robert Posted on August 27, 2018 at 6:43 am

    Make thousands if you use Verizon, Sprint or AT&T. (Text: 813-815-4196) or ([email protected])

    Reply
  45. Devin Giles Posted on August 28, 2018 at 2:56 am

    Hey, Business Casual, can you please do a video on Viacom?

    Reply
  46. Marco Castro Bosque Posted on September 9, 2018 at 11:05 pm

    About to start working for this company its story is incredible thank you very much for the information

    Reply
  47. jim s Posted on September 27, 2018 at 10:31 pm

    Very good, I subbed to your channel.
    We know how it ended, we’re screwed.

    Reply
  48. sevi zezou Posted on October 16, 2018 at 7:14 pm

    Great video.. well done 👍

    Reply
  49. s v me me Posted on October 26, 2018 at 7:48 am

    Jp Morgan owns chase bank wow he is an old player till now too

    Reply
  50. CopperXLUIron 1KERA Posted on November 3, 2018 at 6:16 pm

    AT&T is the company that created the telephone and lobbied against Net Neutrality. One of the majour companies and one of the worst companies.

    Reply
  51. V M Posted on November 7, 2018 at 7:21 pm

    These clerks are very stupid.
    I call several times and they never correct the problem🤣🤣

    Reply
  52. Cookie Posted on November 17, 2018 at 1:09 am

    They sealed and distributed the chakra into 9 equally powered beasts and thats how naruto story line started

    Reply
  53. Yagi Karoo Posted on November 18, 2018 at 3:54 am

    Great great video! Very informative!

    Reply
  54. Soviet Dogmmunist Posted on November 20, 2018 at 9:04 am

    If Telephones never existed, smartphones will never exist

    Reply
  55. Swastik Mohapatra Posted on November 23, 2018 at 9:36 pm

    5:30 waifu spotted

    Reply
  56. What Is Mastermind 47 Posted on November 24, 2018 at 10:19 pm

    It is also the largest provider of fixed telephones.

    Reply
  57. cyndn Posted on November 29, 2018 at 5:32 pm

    What about Phillip Reiss? Didn't he invent the telephone?

    Reply
  58. Finn THE B3ST Posted on December 14, 2018 at 2:43 am

    See? Canada is useful after all.

    Reply
  59. Jo Pao Posted on December 17, 2018 at 7:07 pm

    "The FCC wasn't always bad"… queues an image of Pai…. hahaha! I support that.

    Reply
  60. DBS3844 Posted on December 27, 2018 at 11:33 am

    What is the name of the intro song plz?

    Reply
  61. The Slavic immigrant Posted on December 28, 2018 at 11:04 am

    so basically, capitalism being communism and forcing a company to give its patents to anyone, not letting a company do anything other than telephones and then destroying a company because..no reason. k. america is a fucked up place.

    Reply
  62. Love J Beene Posted on January 1, 2019 at 9:04 pm

    Don't ever buy a at&t prepaid phone it's a rip off $45 dollars for internet that's runs out get straight talk.

    Reply
  63. Appeldorn Posted on January 2, 2019 at 4:26 pm

    Fun fact: Calling someone in dutch means: Bellen (Maybe after Graham Bell ?)

    Reply
  64. Don’tGetScaredTV Posted on January 3, 2019 at 1:55 am

    The narrator sounds like Christopher Waltz.

    Reply
  65. LilZebra Posted on January 21, 2019 at 3:00 am

    Elon Musk (SpaceX, Tesla) is a modern day Alexander Graham Bell.
    God bless Elon Musk.

    Reply
  66. James Dailey Posted on January 27, 2019 at 8:21 pm

    I have had AT&T for 3 yrs and recently I wanted to upgrade my phone. I have internet, direct tv and cellphone. Their prices and plans are not even close to their competitors. Went to Sprint for my phone and drooped cell service and kept internet & DTV . Got my bill in NOV and the drop was very little. My internet is est $55 , my DTV is $40 but they billed me $173.06 2mos in a row. So i contacted customer service 3 times and they seam to not know how to add & subtract. So dont think because they say you are a valued customer that they wont cheat you.

    Reply
  67. KRYMauL Posted on February 1, 2019 at 6:59 pm

    What if AT&T buys out Comcast and Nokia…

    Reply
  68. EMMANUEL EMORUWA Posted on February 3, 2019 at 4:22 pm

    If you have at&t chat me up so we can talk about business +19377709328

    Reply
  69. Stephen Receveur Posted on March 6, 2019 at 11:35 am

    AT&T can suck a big one I hope they lose everything and require the company to be sold off

    Reply
  70. Happy Malik Posted on March 18, 2019 at 12:16 pm

    Please replace PLDT because of it slow ww service ,here in Philippines

    Reply
  71. Tư Vấn Quang Minh Posted on March 20, 2019 at 3:30 am

    Establishment of companies, services established companies

    Reply
  72. William Collins Posted on April 11, 2019 at 8:20 am

    What I don't understand is how is it at and t was the first phone company yet there cell phone service sucks and everyone I know that's had it has complained?

    Reply
  73. Johnz Doez Posted on April 13, 2019 at 7:37 pm

    AT&T bought SBC, not the other way around

    Reply
  74. Mark Gigiel Posted on April 26, 2019 at 6:22 pm

    My dad worked on a plastics molding and assembly line for Western Electric. Pretty much a sweatshop. No A/C and plastic fumes. His pension sucked after the breakup. He died of cancer, no surprise.

    Reply
  75. marco garza Posted on May 23, 2019 at 3:01 am

    😎🦁🐯📡💘🌏😇

    Reply
  76. moses simwinga Posted on May 29, 2019 at 7:01 am

    What happened to Symbian OS?

    Reply
  77. Hideika Posted on June 9, 2019 at 3:19 am

    I still love AT&T, always get amazing service everywhere I go. I was with T-Mobile for 6 years but I regret not switching before.

    Reply
  78. Zebra Dun Posted on June 12, 2019 at 1:12 am

    I cannot use my cell phone due to spam constantly and ATT will not or cannot stop it, what am I paying for? Nothing!

    Reply
  79. Aaron Chan Posted on June 24, 2019 at 4:42 pm

    Actually, the first words ever whispered into the telephone were "U up?"

    Reply
  80. Daniel Black Posted on June 30, 2019 at 1:47 pm

    What's that random animé character popping up everywhere?

    Reply
  81. Classified Posted on July 11, 2019 at 5:07 am

    Do Napster and Peer to peer sharing /torrent

    Reply
  82. Samsng Device Posted on August 18, 2019 at 6:45 am

    Where do you learn all this stuff? Wikividia? 📹

    Reply
  83. Richard Martin Posted on August 19, 2019 at 2:50 am

    They give nothing but shity service They don't care they don't give a dam the charge out the ass for crappie service

    Reply
  84. Ethanpowergamer X Posted on August 20, 2019 at 12:31 am

    I have problems with my AT&T ruma_telecom on whazzap+17814297492 help me out, you can also text him

    Reply
  85. wildtexan Posted on August 20, 2019 at 1:00 am

    AT&T how the US government destroyed a business

    Reply
  86. Cheeto theWicked Posted on September 15, 2019 at 6:08 am

    You should do a video on how Verizon overtook att as the biggest phone company

    Reply
  87. IAN DUCAO Posted on October 18, 2019 at 10:21 am

    "ATT Sucks" – most american customers

    Reply
  88. IAN DUCAO Posted on October 18, 2019 at 10:21 am

    "ATT Sucks" – most american customers

    Reply
  89. Aleo Aninda Posted on November 3, 2019 at 11:24 am

    The federal government ruining private businesses as usual 🙁

    Reply
  90. Dayton Stockwell Posted on December 15, 2019 at 1:01 pm

    And bell

    Reply
  91. Mustakim Rahman Posted on December 16, 2019 at 9:37 am

    Yeah, that Time Warner acquisition was one of the reasons why WB executives let the Justice League become such a shitshow!!!

    Reply
  92. Jae Geun Yun Posted on December 30, 2019 at 4:34 pm

    Man, SBC. I havent heard that name in a long time

    Reply
  93. Business Casual Posted on January 18, 2020 at 12:02 am

    Download the Tab for a Cause extension to help charities across the world.
    At no cost to yourself, you'll be raising funds with every new tab you open 👉 https://tab.gladly.io/bc

    Reply
  94. simone boxler Posted on February 12, 2020 at 4:14 pm

    the telephone was invented by Meucci

    Reply
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