Today, two minor coincidences change life in
America. The University of Houston's College of
Engineering presents this series about the machines
that make our civilization run, and the people
whose ingenuity created them.
John Steele Gordon tells how
a lunch-time stroll, and a lost overcoat, brought
down the old AT&T monopoly [1]. By the late 1940s, AT&T had
absolute control of American telephones. Then, one
of their lawyers passed a store window on his lunch
break and saw an advertisement for something called
a Hush-a-Phone.
The Hush-a-Phone was a minor attachment that fit
over the mouth of a telephone. It was like a
mini-megaphone -- a purely mechanical gadget that
let you speak quietly and still be heard.
The lawyer didn't realize that Hush-a-Phone had
been in business since 1920. All he saw was someone
selling a telephone-related item without going
through AT&T. He set out to squash it. He filed
a suit with the FCC claiming the Hush-a-Phone
mouthpiece would cause catastrophic failure of the
phone system.
The FCC did what AT&T told them to do -- they
ruled against Hush-a-Phone. But Hush-a-Phone went
to the Court of Appeals and proved their device
could have no effect on any telephone system.
Suddenly the armor was cracked. The Hush-a-Phone
suit was a precedent every other company could use
from then on. That lawyer on his lunch break had
made a devastating blunder.
Pressure against the monopoly built. Then, in 1963,
a small two-way-radio service called MCI tried to
set up repeater stations along the highway so they
could sell more radios to truckers. AT&T saw
that as a competing service. They told the FCC that
MCI's prices would be too high. Then Jack Goeken,
from MCI, heard AT&T had a confidential report
on prices. But how to get a copy? In desperation,
he decided to fly to New York and simply ask for
it.
He landed on a snowy day and then forgot his
overcoat at the airport. He showed up at AT&T
without a coat and he asked an employee where the
report might be. Because he had no coat she took
him for an in-house colleague. She directed him to
the library and gave him a request form. He simply
checked the report out.
There he found AT&T had estimated far lower MCI
pricing than it'd claimed. It took six more years
of legal maneuvering for MCI to get its license.
But when it did, the old monopoly came apart. A
whole array of technologies was poised to
revolutionize telephone systems. Now they could do
so in a wide-open marketplace.
So two coincidences caused dramatic improvement in
telephone service. We made 23 million long-distance
calls in 1970, 200 million in 1980, 3.7 billion in
1994. In 1970 an average overseas call cost eleven
dollars. It was barely over two dollars by 1994.
Because of a raincoat and a store window, you can
now turn on your TV and find AT&T going
toe-to-toe with MCI, Sprint, and more. AT&T
did, after all, bring the telephone to maturity. It
is certainly qualified to run today's race. But no
longer can any one company sort through today's
blur of radically evolving technology.
I'm John Lienhard, at the University of Houston,
where we're interested in the way inventive minds
work.
(Theme music)
