AT&T – Alexander Graham Bell’s Company Was Actually a Monopoly… Twice


Made by robots, for robots. Only read if you're weird.

Hey man, what's up not much what's going on with you, this is what are you doing? Hey hey. Have you ever heard of a phone call? Oh nothing much a with you, man! What's going on with you troo, if you would do it, i have a. I have another call and i merged you with that: co. Okay, let's here's! The problem, we've probably just gone viral on tick, tock again yeah probably this is someone's. First episode is hal experience and i want you to know this is it. This is what it is yeah every time yeah actually, but speaking of phone calls. Have you ever heard of att? There's a guy named alexander grandpa, you ever heard of them. Att started war war two and you can't change our mind on that. You should really look at up. It's really interesting to watch them drop it! Here's the things i would like to learn about, because i'm tired of sitting through these episodes he the crap- that i don't want to hear o there, the mom eighteen tes, the mob support on patrio we're going to kill you things now we're goin to learn about my internet provider. Are you serious? Is it going to be? I really wanted to be negative. Is it going to be negative, so i would love for it to be negative sort of i'm not to what it is yeah i mean pensive man. They promised me last year as pensive. They promised me last year. They were give me free internet for life and it lasted two months. I promised you that at d support a in a polo dorador now he's what happened. He's a an. I had a bunch of problems with something i can't even remember what it was last year bunch of problems. My name is bri. They like not a bunch of problems with. I don't even remember what it was your wife name as bree. No, i think they like i make those shows because she will never listen to the past. I think they like triple build me or something like that. It was really. It was something really ridiculous, and so i call support. I ended up escalating it like three or four times like i was talking to the the ceo at this point. If you weren't beated to blame credit, try to call jeff basis, one, i email jeff basis. You know you email jeff, b at amazon di, and i got a reply from his assistant yeah. They do that they do that on amazon support, if you, if you lift it high enough they'll, give you jeff jeffs amazon email, which is literally jeff at amazon com, yeah and they're like here, we'll get you jeff's email. So you can talk to you. That's i mean i don't know, that's exactly where o'doin right right right! Oh yeah! Oh yeah! You want to ask you want to talk to my manage okay. Well, here's you know what jeff than i can tell that you're not going to give up until you talk to jeffrey. First of all, it's not even shore for jeffrey sore for jeff old anyways. So eighteen tea was like yeah. We're sorry, sir, this is a major inconvenience, here's what i can do for you. I can give you free internet for life, and i was like for life and they were like yeah for life, and i was like you're telling me. I don't have to pay and i did not believe him i made them commit to it over and over again, i like for the rest of my life and they were like yes for fifteen more years they were like yes for two more months. I was like: what are you going to do? Do what, if that sound like for life plan, i is at now add, has to put out bounties they're gonna put out like freaking, you know and you and there it's one of those things where yours like. Don't tell me what it's going to happen, yeah and then they just take you out and then they just yeah it was at and take you out that's what ye but yeah a couple months later i got charged for my internet, so i call them and they're like oh yeah, we're sorry we're only supposed to give that deal. The people who live in san francisco- oh yeah, we're sorry. We lied. That was the whole thing that and also we're the biggest internet provider in kansas city. So you literally cannot switch to someone else. So it's kind of either work with us or not really don't it's either just pay us or don't have internet yeah. There are literally zero other options unless you live in north kansas city, where alex lives and it's part of their infrastructure and their city planning to have google fiber for everyone in north kansas city. But if you live in the rest of metro can city, i is just of anagers in most of kansas and you can also get comcast. Can you really you want to get comcast? Sorry, i want to watch hulu. I would like my internet to you know net well, but att doesn't half the time yeah! That's true! So here it's it's my rotic. You said this because, but t own comcast, no, i'm pretty sure they do t they do not. Att is the most monopolist company to ever exist right and this story man. I love this okay, i used to be a singular customer, yeah and now you're in attoms now well. I was at t for like two years and then i was like i was like i'm pretty sure these people are going to try to kill me one day. I cos i keep getting calls from att raps. That makes me think they're getting yeah they'll show be your door to that's how they got my old roommate is that they were like hey you, your older and kill my old at how they like recruited him is they do the whole? You go door, a door selling internet and you make commission and they're like you can junk. Like you know, it's a parents game yeah a little bit yeah. If you recruit people, you get more money, it's just like a whole. So here's how this started. There's a guy named alexander grand bell. You ever heard of them. He invented the phone and you're asking me. If i ever heard of a gb atrius ab- oh yeah yeah, i am asking you that i know who that is so he invited the phone and he started the company in eighteen. Seventy, five, the the roaring s n, eighteen and sirt, five yeah. It was actually the ringing as the first or fun thing, and so he starts this company called the bell telephone company, which is what onch is now bit coined. Pts, that's a little known fact: little no factors if you invested. If you invested a hundred dollars in one thousand eight hundred and seventy five in the bt, you would be a billionaire now your email would be jeff and amazon. Toat just give that email goes to the just by the concy. The jeff bezos isn't. Actually the ceo like. I well that's another a differently. I have a conspiracy that the bald guy we know is jeff bezos. Is it that jeffs not the o? I have a conus, but it's literally an alien with like eight tentacles and he's just out here and that's who runs amazon, because the things they're doing is pretty insane right, like first of all, he's like over here and they're. Well, yeah ett, lied to you and amazon to me was like we're going to send you this thing and like two months later they were like just kidding. We lied just ki yeah, oh here it is oh yeah, oh yeah. We can get anything to anywhere in the world in a couple of hours, but we could get this to you and i i to get us anyway. Okay, so he sat back on track. He starts t bell telephone come ten company, seventy five! He invented the phone. We all know that story whatever he calls his assistant and is like hey. I want to see you and it's like what a weird first phone call but and then he starts this phone company. He was only there for a couple o years because he was he was like i like inventing more he's like. I need to go back to my laboratory yeah, and so he sold his shares. Inventors do the yeah he sold his shares and let the company continue to run. The company is interesting because they had a really interesting strategy in that first, those first days because they recognized okay for this to work, there has to be full lines crossing the country, and so this will cost millions of dollars in infrastructure to get this off. He is to work, we're going to need a lot of yarn and ten cans. Okay and we got to build an infrastructure and there there's that place in central missouri with all the yarn we can go to. What's that place called yarn yarn barn, you an bard, a yarn. What's that is called yard what Welcome to the city of yarn. Actually I open at one of my dream: businesses is to retire with a you know. My wife will run the yarn barn, the yarn section and then i'll run like a little ice cream place. We'll have a sign out front that says my milk shakes bring in all the boys, though the yard. Oh, oh, no. Okay, that's why i'd like to retire? I love of this so eighteens strateg in the beginning was pretty clever was recognized. They recognized. They said we got to. We got to buy property. Well, what they said was this will cost millions of dollars to stretch phone lines across the country, so instead what they did is they said. Okay, we've got twenty years for our patent before the competition starts coming out, yeah, and so they said we got twenty years to cover the country in all these phone lines, but that's going to be expensive. So what they did is they sold licenses to investors to cover s their territory, so most of the territories were towns or in extreme cases, counties and these licenses the way it worked is you could build your phone lines all around your territory? However, you wanted to build them, but you couldn't connect to other territories. You just had your one territory, you can to go outside your territory, so you can only call people in your territory in your territory yeah and what att did is they built the connections? And so that's where long distance phone calls came from, and so when you wanted to make a call outside of your territory, it became long distance and then att you had to pay att. For that call the way att structure this contract was really interesting. Now is because these local territories, they had a ten year term, where they could run their license at the end of ten years, eight would buy back their territory. I guess their company that they started, so an investor would say: okay. Well, i can invest a few million dollars to build out this infrastructure and then run the company and make money makes an era for ten years, and then i've got a guaranteed by out at ten years. So after ten years they still have ten more years with no competition and someone else built the one else they about the em interestin, but those for those whole ten years they have a monopoly on the long distance market. So, at ten years what they ended up doing is they ended up only buying about forty percent of these territories back because of a few reasons, some of them they negotiated with the owners and they let them keep their licenses some of them there just wasn't big enough market in that territories. They said. Ah, you can keep that, and so it was those were kind of the two two leading reasons, but there was also a budget thing because it ended up being way more profitable than i think they even expected okay, and so they could only afford to buy back so many territories- hey thanks for being here for things a on last night, if you want bonus, content, early access to episodes and a whole lot more, including a discord channel. We have that available to our patron supporters to sign up for that and for or info text till in to six six, eight six, six devout back the vast majority. There's a lot of people wanted to keep the investment yeah yeah a lot of them were like wait. Okay, i can make more money if any thing this yeah. So a lot of people ended up the redaction. The people who they bought it back from were probably people who had already spent that money- yeah, maybe maybe or or just didn't, want to do it long term or maybe they were just like yeah. I want out of this i'll take my my pay out, but i think there were some people who were like man. I can stick in this. Let me pay a another license fee and i'll i'll. Stick it out, yeah make more so so they did this for a while and then obviously their patent runs up, and this is this is a really interesting moment in telephone history, because it's now basically the ely nineteen hundred is not quite but basically the early nets. The s it's the roaring s every decade of the best is the roaring that decade, the roaring is were crazy. Nirvana was really big at this time. Shut up, keep going, is them so as crest to me that, like civil war yeah ten years later, phone yeah and that nuts? This was weird because i'm picturing civil war time, you know yeah yeah, i i mean yeah, that's hard. What do you picture when you picture the civil war? I picture? What is it that mel gibson movie? That's brave heart? No, no mill gibson has a civil war movie. Does it really, i think so? Yeah the patriot, hmm yeah yeah, that's makes may more sense. I didn know simi, for, though yeah that's what i don't watch mel camps on movies yeah, my parents. My parents may be watch that in high school because they didn't want me to enlist in the army and they said, watch this and then afterwards they were like. Do you want to go, and i was like? No, that seems besset you down. They were like. Is this what you like for your life, but it works like that that comes o your school and tells you it's like the dare program. Basically, i kind of he's like this is what drugs do? People behead each other? What you're telling third graders about this and that wild yeah that's pretty true anyway, so so the roaring in e s that opens up and everybody's like, i can make phone company yeah, but it it was english, wasn't great. There was old english yeah, i could make phone company. There was a group that talked like four score and seven years ago, and then there was another group that was like i'll make, phones and you're like what i'm make phone, so you do phones make here is the issue with when the patent opened up att covered the nation and phone lines gardy, and so it was me on us. He that you couldn't use their a million dollars. No, no one else can catch up yeah, so there was so much infrastructure to catch up on, that's how they couldn't they couldn't catch up in the states and then, alternatively, what happened outside and in alexander gram bell yeah like just he just kept inventing. He just got a got other things to make he's sold out, though, like he sold his shares. I wasn't making money from this no well i mean i'm sure he might have had a role of royalty. I'm all look it up real, quick yeah. Was he making? No, i want to say we re residuals, but yeah. You know because i mean because if you sell out the twenty years later, they are the company yeah, and was it really millions because in h, e y millions is a lot yeah, so he sold his patents for a hundred thousand dollars in eighteen? Seventy nine! That's a lot of money. How much is that work today? So a hundred thousand dollars in eighteen. Seventy nine worth two point: six million dollars today, so i mean he made money off of it. Two point: six million dollars, so it wasn't. It wasn't like he made crazy money, but he made money that you know like. He probably would have made a lot more if he stayed, but he made he made good money and then he just went on and kept inventing stuff. He lived the rest of his life and he's just like what can i make he vented the pooper scooper? He did it. That's that's what he went on. He made the phone and then he made he the phone and then he spent the rest of his days cutting eels because he was like what may do you say marge come from so what was interesting about it is in the us. Obviously, nobody could compete with att, but outside the us most other countries. What they did was they started state run telephone companies, which sounds at first glance, pretty not american, but it's actually i'm kind of surprised that it didn't go this right in america because it was essentially like the post office right and so there's the state run companies that just they handled your phone calls just like the post office handles your mail, and so that was the way it was in most other countries for years. Until obviously it wasn't a bunch of other people were like we. I can make a lot of money out like this kind of like fete. Do you can you explain to me how phones worked yeah so back then the way back then or now now you say both usually talk to it and it does stuff. No okay, so back, then you would pick up your phone yeah and you get kinoo include that first step yea. Let me let me walk you through evey detail, you'll get connected to your local operator right and that was whoever ran a so middle of night. Is there an operator tans? There was always an operator standing by. Usually there was a multiple and, depending on how big your ten s, s watching ananas phone, the whole time he's on an iphone. That's what i imagine he's on an iphone with his feet. Up on he just watching hello taller. He talked to i and they were like foine phone mak. You reach phone, okay, okay, just doesn't know, he just doesn't know how to talk yeah so that they just had this wall of like in per intelligence, can write really well. Oh my gosh, my kid, but when it comes to like the you know, it's just like the elis to for them, so they had for phone up ro, basically like guitar cables, they're like little quarter and cables yeah, and they just had a wall of inputs with everybody's name on them that they serviced. That's what i knew i was just making sure that we could yeah and so talk about the evolution of that. So what you're saying is that person became a state employe in some areas, yeah, and so in other countries. It was a state employee and then the way was for for long distances. They had like a splitter cable that would then go out into and there's like a person next to t and then eighteen t would can run the cable through the ocean yeah at t just carried it there's actually the the way that works now is there's a giant fiber optic cable. That's just stretching the planet through the oceans. It's actually really interesting to watch those ships lay that cable line because they have a giant school. That's just constantly just dropping it into the ocean, and it's huge this line. You should really look it up. It's really interesting to watch them drop it, but yeah. It's just this massive. Like really sturdy, cable, that's stretching the ocean and that's, i think, that's doing internet now. I think we've got phones figured out and now phones are pretty much all so i love the bree, could wake up at two in the morning and see a glow coming from your office and she's like what is he watching on his computer yeah she's, like he's, probably in some chat room with some girl in florida, f in in your office, you're just watching them lay fipa, cable and you just like it's so satisfied. You really need to try it at y. That's why i bring it up because you use the word satisfying is because you go it's really satisfying. Actually it's like i mean it's they've got some days on a bad day at work, and i want to go home and just relax with a good hour of five rocket cable lad. You know so anyway, really takes the edge ob. One of those companies, one of the state, run companies the dutch company. I think it was. I can't remember exactly how they spell it like dutch telephone near. However, you say that a telephone and dutch that became tea, mobile and tea mobile just was like well can te part. This word has a tea in it will keep that. I guess we'll give that keep everything else so they're from their yeah. Her judge company yeah- originally i think in is from du the jiji. So so what happened really quickly? Is companies existed as these other companies began? They started realizing it's impossible for us to complete, compete with att yeah and so in it to work with them or absorb into them yeah. So in one loud, nine hundred and seven, the government was like this is kind of a monopoly. So pretty much immediately. They were like you guys, little too big here, and so they started kind of like an then eighteen. We was like all right. Well, actually, that area is called comcast and they're, like that's still you and like the like. Why don't you email jeff about it now, when i'm in phoenix i go by jeff, does make you a different person? A does okay, so this is actually really close to what happen. Now. I know exactly how you break up monopolies. Is you just name it different things? Have a different ceo have a different structure, but all the money finals or the same things. It's the i mean, that's how so they spent when you go to the chip isle. Who do you think, owns all those chips? Do you think it's a bunch of you think that you think there are like fifty different chip companies now, no there's two different ship companies, it's kruger and then other croker las free to laze foger and the other companies literally other croker, and then they were like this is a little too on the nose were has to change this okay, we'll call it okay, okay, all day a so so they spent the next like thirty years fighting them. There was a couple dips because of the wars both of the wars. I warns you know the world wars, you know the ones ere the one and the two yeah because and they kind of got a little bit of a world war and then other will the world war they got a little bit of, like obviously the war. The government was occupied yeah, but they were instrumental in the war because they pretty much took care of communication in the and the war, and so the government kind of laid off them a little bit because they were like hey. You know, they're, helping us talk and that's important in this, and so they kind of backed off for each war and then like after the war after world war, one they are like. Okay, but hey. You know the thing that we were talking about before the war. I wars over a nice by the way that i we're talking about before oh shoot was over then, coincidentally, another war before they could get it fixed on hers. The here's, the theory right, hey thanks for being here, we've got merchandise. It's a way to support the show and help us do more stuff by new equipment. Great more people, if you like what we're doing, i want to help us. Do that more. Please consider doing that. If you want to link to that all of that's going to be sent to you if you jus text till in to six six, eight six, six i'll tell you it's not a thing where we're going to text you a lot where no, it's, not a tech service, we're not going to like send you more than, but it's just a way for you to get a link. It's one text, that's all we're going to send. I promise you, you know where i'm going already is that war war warn happens all right and it's like a o and actually a lot of americans didn't like where were one yeah and then everyone was like. That was super weird. We did that right and att was like yeah. I was pretty crazy. I got the heat off of us right and then the government was like hey att and they were like, oh actually and then att started world war to a like. Did you see this thing? This is fact this is canon. Actually you can you can make this is ight is treatis is att canon, so you att started war war two and you can't change our mind on that. Okay, so we're working, no evidence to say they didn't world war, two ends they get a little bit of patting for a little bit yeah and then the government comes back and is like hey. So essentially, what ended up happening is they had to split up from there? They had their own company that handled the phone lines, but then they had a company that also manufactured the phones and they're like you can't do both, and so they split that up and so then they had. They were then just focused on the phone lines, not manufacturing the phone ites like okay, fine. We won't do that, but then, a few years later they were like yeah. This still is a problem like you're still kind of the only one doing the phone line thing, and so it ends up taking them about twenty years and then in one thousand nine hundred and eighty four, they successfully broke up att, and so it split it up into eighty four and eighty four wow. So it's beyah on thousand nine hundred and seven it kind of began where they're, like you guys, are a little too big it almost eighty years for them to successful, saying about like social media, though they've been trying to break up facebook for a little bit yeah. I like listen, facebook, you run like if facebook tried to absorb ticktock, i don't know what they would do. Yeah well, yeah yeah, that's that's a good point, so they ended up putting it up in eighty four into companies that were based on region so very similar to the original model for eight right. So eighteen still existed. So there is att was one of the companies that stay went to csanta bett c tt d in etiquet connect cett! No! At the i was saying kasan t now. I was saying just go through the altho at attor d. I know my name is ronald. I am from p t and t so it's put into. I think nine companies nix pacific telesia, ameritech the atlantic southwestern bell corporation, obviously att bell south and us west, now they're all back to being a part of at right close. So you probably have heard of some of these. These were regional, so i grew up knowing us west, which ended up becoming quest and now a century link. So if you've heard of any of those you probably live in the west or i have watched the seattle seahawks play football because they own their tedium, but then like s, bc that that's here the sb spring level. I don't know if they has brant. I could be wrong. Maybe they do. But you know, team mobile, absorbs friends, so yaya, that's portofino, but anyways. So these companies bell atlantic bought nix in ninety six and they rebranded to horizon, and then s bc went and they bought ameritech and pacific telesia and then eventually bell south, and then they bought atant and rebranded. To att and two thousand five yeah, so what happened? Was they got split up and now there are three companies from the split, so i guys putting a nine now the three century link, which is the only one who kind of stayed on its own, was like verizon by our self eighteen t risen in the att are the two other ones all the rest of the other companies became for izing in the att, which horizon is just two of them so really of the nine six of them are once again at t and then eighteen also went. I mean sp before they buy. Att, went and bought a bunch of other companies yeah and att since it became the new reorganized. Att has also bought a bunch of companies again, most noteworthy being direct tv was a really big one they by they bought that up and got into the tv business. They also got his att on hbo or how are they connected yeah? So i don't know if they actually own hbo, i'm not sure. I know they bought or they're in the process. I'm not sure on this, i'm fog an this part. I know that in the pot process- or they just finished, purchasing time warner yeah, which i think owns hbo. So it's okay, that's where i was thinking yeah a because i know that i get hbo included in my internet m m yeah. I think they might have actually like successfully purchased them right now, and then they also bought a couple mobile phone companies, most notably singular, and to create eighteen, two or so. This was a big deal, because two thousand and five eighteen t in the s in the early two thousand and eighteen, like att kind of sucked all there's some city aries. That split up were great, but the actual att kind of lost its way for like fifteen years because they were like. Oh, what do we doo now, like all of our telephone distributors, are different companies yeah, so they try to get into computers. They try making computers for a little while, which i don't know if you've ever seen a att home pc, but you haven't because it didn't succeed and then so they just kind of had failure. After failure, after failure until they got bought up by s bc, and then s bc just went on a purchase other company rampage where they were like what? If we don't do anything and we just buy other companies that are doing things and that's exactly what they did and that's still what they do, is they just run by yeah but like like? We don't have to do what? If we just don't make a podcast anymore, we we just by the lyats, it's make an offer. That's our to goal is to you for on patron. That's the goal, the goals to get enough people who pors on patron to make enough to buy atant, and if you help us do that, we promise to our patrons will give you free internet for life. Yep. If you know what we mean, it'll be the best two ports of your life support on patron we're going to kill you we'll just put it out there. You know, let's just really make that that's really make that make sure. That's that's known. If you do want to support on patriot, you can text till into six n. Eight. Six: six, that's the quickest way to get started yeah, and we want to take a cook. Second. Actually, while we're on the topic to show you out one of our twenty five dollar patrons, his name is kyle kyles, so cool man, kyle and his wife honestly, like they've, been on all like the live events that i do yeah and they switch. They take turns watching their kid. So this is so true that i need a live. Emento yeah any live event that i've done they their child is in the living room and they honestly like they take little shifts. Oh my gosh in the lie, and then one of them goes to wash the kid and it's almost like twelve minute intervals, where they're, just like all right, see wit like it's, is so funny to me. That's awesome, but yeah, so shout up to kyle. Thank you for supporting the show you're making it this possible yeah for ane to kill you one day, we're going to kill you. I mean like we telout, you know you're going to get free internet and you better enjoy it. You better use that free internet to watch as many fiber acti cables going to the ocean as you can, because we are going to take you out. You think we're goin at you leach off as off of us forever. Oh, my goodness! So! Here's where we're at now at about time warner for legal purposes, i'm being serious, and it was a shock because everybody thought they were like they're like there's no way they're going to let this go through. Ten he's got so much slack slack. No, they don't that's not the word. Oh okay, they've been they've been taking flag from the government for as long as they've been around gosh, and so everybody expected to go through. But what's crazy is i mean this is a vertical merger, so these are companies in two different industries that merged right that never gets shot down. So i think that's what they figured out is: okay. We can't go by companies that do exactly what we do. We just have to buy all the other companies that do different stuff and it'll go through also in two thousand and fifteen. They said wait a second in eighty four. We got split up into a bunch of different companies, and that was really great for us s b c, because now we're a company, but we weren't before, but if now to stop that what we could do is we could just give. I don't know thirty million dollars the government every year, yeah, that's what they're doing now, they're just giving thirty million dollars and they set up a whole. They have a whole department of lobbyists that there yeah absolutely a lot of you gos shmoos, the government. That's all they do. Is they smouse the government and then they just go by companies that are adjacent to what they do. So it's technically not a monopoly. But if you think i am politicians need that money for their campaign to stay in office. So they take that money and then because they took that money, they can't do anything about the problem that exists and anyway of yeah hey. You know it's super cool that, were you know anything that's wrong with the world can never be fixed. Think about that yeah yeah! That's pretty fair! Yes, that's a it's a big problem that you just brought up, but i should do an episode of lobbying to explain that word. An interesting episode, yeah i'll, have to look into that. I ought to learn some more about here's things. I would like to learn about because i'm tired of sitting through these episodes at the crap that i don't want to learn at i'm just tired to learn about your dumb stuff. Tell me about lobbyists. Tell me about that's about it. That's why you want to let all medesen on. Oh, my gosh denominations may be here's what's interesting about this, though, is they technically aren't a monopoly in the fact that they don't own all the phone companies? They have competition now right, but they have an interesting strange monopoly. Now that is kind of un categorized, because now they run the company that gets you internet gets you your tv service and owns the tv channels, so they own that whole stream down the line where it's technically they're, not the only one, there's others out there, so technically not a monopoly, but they own the entire stream for you now where, before it used to be, you would have somebody separate on each step of that road where they went an they're like just let's just buy the whole road, and so it's technically okay, because there's competition they're, not the only option out there. But if you run with att, i don't know if you a lot of people are killing their tv services now, because yeah causi mean its dreaming yeah. But i don't know if you've noticed this. This happens a lot on tv channels now there's these disputes between channels and providers. Where, like i saw this the other day where it was like channel, nine or nbc, just wasn't available for like a month because they were in a dispute with right, direct tv they're like you, can't have us right now and they were like come on like just come back, they were like no means no and they were like bore creepy attis, the creepy guy, who just won't take no for an answer. It's just that come in so so they're kind of like so i paid you what i gave you more money, okay, what if we bought you do it or well we'll buy you or we'll buy you out. That's honestly, a real thing that happens. Yes, so it's making the whole industry just kind of like i don't know, i don't want to say cripple, but it's making it not function well because he was hurting it all, because so much of it is just too connected. So it's a really interesting era for att. I don't know if alexander gram bell ever expected any of this to come from his company. He knew it that's where he got out. You know in toadied and thirty five he's like. Oh, i see that going down help pretty fast. On my be that doing my hundred thousand- and let me piece out of here get out of here- i want to invent. He actually invented a new cable a few years after the phone that is very very similar to the fiber acti cable, which actually really really was the kind of achilles heel for att in the phone industry. When that five rabbit, i cable ended up actually coming out and being widely used. Att didn't wasn't using that cable and they couldn't keep up with their competitors, who weren't and so then they end, they ended up transitioning and getting the five rapi cables, but it was a huge struggle for them in the beginning, and the invention is very similar to something that i was in er, but grand bell invented, but nobody adopted back then i don't really understand why nobody did anyway, but so yeah, that's a that's att. That's att! Wow! So are we pro att? We not that's really, honestly as a character question i'm a subscriber. I give them a lot of money every month, because they're expensive, oh and they're, threatening your life yeah. They. Actually i told them i was i was like. I want free internet for in mob yeah. There's a mom eighteen t's, the mob, and they said how about this to gonna pay us thirty. As a month for your internet or we kill you, and i was like. I brought a pretty great deal. I like that. We'll take a i see you got some problems with the with the service we're providing, and i'm saying we could provide you with other services yeah. If you catch what i'm saying you know their fiber arctic cables and the only thing that's going under water this month. You know, i hate that re wha, i can spoil you spoil il. That's enough for the spool will wrap your own. A spool you'll. Do that with your intestines they're gross pople, oh god! Anyway, that's att! Yep! That's that's aten! Do they own any music companies? You know they might. We should make it o we should. We should try to get acquired by att. We should like make something that they could buy from us. They'd be intestate. Why are we not called fiddle off production

In 1877 Alexander Graham Bell founded the Bell Telephone Company. It was the world’s first telephone company and would one day become AT&T. Even though Alexander Graham Bell sold his ownership stake in the company after just a couple of years with the company, AT&T would become the largest telephone company in the company the world. In fact, AT&T grew so large that the United States government spent well over 50 years trying to break up what they believed was a monopoly. They succeeded in their goal. However, 35 years after the break up almost all of the subsidiaries have reunited to rebuild the monopoly of old. AT&T is now almost as big, if not bigger than it was before the monopoly was broken up. This is the story of how AT&T became a monopoly, twice.

The History of AT&T

AT&T has been around for a long time. A really long time. In 1877, just a few short years after he successfully patented the first telephone, Alexander Graham Bell opened Bell Telephone Company. Shortly after founding the business, he found his way out to continue working in the sciences. Bell ended up refusing to use a telephone claiming it was a distraction. May we all learn from the harbinger of our distracted modern lifestyle.

The early days of AT&T were wrought with some of the wisest business decisions to date. The company knew that covering the nation in the telephone lines required to use their product would be an immensely cost-intensive endeavor. To avoid shouldering this cost Bell Telephone Company sold the rights of operation to local companies around the nation. These companies had the right to build lines and operate local calls. Bell Telephone Company on the other hand would handle the long-distance calls.

The Long Game

You might be saying, “Well, hey, what is wise about letting other people steal your business.” The early AT&T included a clause in their contracts with local phone operators that after their 20-year patent expired the inventor’s company would buy back the local companies and begin operating all calls nationwide. This was a significant move as it guaranteed AT&T as the leading phone provider in terms of coverage when their patent expired. Only the company would not need to invest any of the upfront cost of building the phone lines across the nation.

An original share in the American Telegraph and Telephone company (AT&T) which would become a monopoly
In early share in the American Telephone & Telegraph Company (AT&T)
Photo courtesy of Wikipedia

When the patent did expire there was no possibility of any company in the nation competing with the behemoth that was AT&T. In reality AT&T ended up not buying back every single local telephone operating company. However, they bought enough to have a head start worth millions of dollars in start-up cost. Again, the millions in start-up cost they did not spend.

Do You Want to Play Monopoly?

The position of the company guaranteed it a monopoly early on. The United States government took note of this and began attempting to dismantle what they saw as a monopoly. Unfortunately for the Federal Trade Commission, they began their efforts in 1907 and before they could see their plan through the nation would be thrust into World War 1. A second effort after the war was dashed by World War 2. Finally after nearly 80 years, in 1984, the FTC successfully broke the largest monopoly the US would ever break up.

A Nasty Break Up

AT&T was broken up into 9 subsidiaries; AT&T, Bell South, US West, Southwestern Bell Corp, Bell Atlantic, Pacific Telesis, Ameritech, Nynex, and Bell Labs. These companies would continue operating much like the former AT&T with only regional capabilities. AT&T sort of lost its way during this period. The company attempted a series of ventures that all fell flat. Other companies like US West, NYNEX, and Southwestern Bell thrived. US West went on to become Century Link. Nynex and Bell Atlantic Merged to become Verizon. Southwestern Bell bought a conglomerate of other companies including the rest of the companies left over after the break up of AT&T. That’s right Southwestern Bell reunited the family. Well, most of the family at least.

A Stronger Monopoly

After acquiring AT&T Southwestern Bell rebranded to carry the name with greater authority than its own. At this point, AT&T had now reunited with 6 of the 8 companies left over after the split. For all intents and purposes, AT&T was back and stronger than ever. Thanks to the purchase of companies like Cingular, DirectTV, and, more recently, Time Warner, AT&T is now operating in a wide array of industries that are all connected. This single company can now operate an individual’s TV service, internet service, phone service, and all the channels on their TV. For AT&T this appears to be just the beginning. Luckily, it looks like the monopoly has got back together and the FTC doesn’t seem to mind because AT&T is spending exorbitant amounts of money in political donations every year.


AT&T rose to power quickly and effectively. It did after all invent a product that would reunite the world, and one day separate but that’s a different discussion. Its business model inevitably birthed a monopoly in the early days. Luckily for AT&T, it took the government 80 years to figure out how to stop it. So those, who benefited from the monopoly likely lived their entire lives before the issue was resolved. Even still, once it was resolved it only took Southwestern Bell about 25 years to get the gang back together and restore the monopoly back to its former glory. It really is kind of impressive.

Learn more about the rise and fall and rise again of AT&T and their monopoly in this episode of Things I Learned Last Night. Things I Learned Last Night is an educational comedy podcast where best friends Jaron Myers and Tim Stone talk about random topics and have fun all along the way. If you like learning, and laughing a whole lot while you do, then you’ll love TILLN. Watch or listen to this episode right now!




AT&T – Wikipedia

Alexander Graham Bell – Wikipedia

Break up of the Bell System – Wikipedia

Related Episodes

The Suburbs

American Dream

Tulip Mania



Tell Us What You Think of This Content!

Don’t forget to share with your friends!

Share This Episode

More Episodes
« | »