// HACKER NEWS — CYBERSECURITY
From Hookswitch to Grave
Through decades of consolidation, reorganization, and divestiture, AT&T left
a famously complicated corporate history. One of the greatest enterprises in
American history, arguably the greatest enterprise, AT&T has often
rivaled the federal government in the size of its budget and workforce. One of
the reasons, as we well know today, was monopolization and its close relative
vertical integration. AT&T was the telephone system, or at least aspired to
be, and for decades the meaning of "Universal Service" was that the service was
designed, built, and operated by AT&T—universally.
While AT&T's tangled origins are fertile ground for the historian, they also
obscure many of the early stories of telephone history. Much of the work of the
early independent telephone industry has been lost in the voluminous
achievements of AT&T. Even very basic facts become obscure. For example, who
invented the telephone? Well, we all know the answer: Alexander Graham Bell. We
have mostly forgotten that, at the time, this was a hotly contested question.
One of the most prominent alternate claimants to the title was a man named
Elisha Gray, today immortalized as the "Gray" in electrical distributor
"Graybar," but better known in his time as an inventor of telegraph and
telephone equipment. Gray contracted prototyping of some of his inventions to an
upstart manufacturer and de facto Western Union spinoff, founded by Enos M.
Barton (the "bar" in Graybar) and George Shawk. Impressed by Barton's operation,
and at odds with Shawk on its future direction, Gray put together the money to
buy out Shawk and became half-owner of the company that would reincorporate, in
1872, as Western Electric (WE).
It is ironic, of course, that a man who might fairly be called one of the top
enemies of Bell helped to found the company that would become one of the most
important parts of the Bell System. It's not a coincidence: Gray's involvement
in WE included plans to manufacture his own telephone design, for
which he had filed a provisional patent. Like many of the late 20th century's
telephone inventors, Gray's greatest challenge in commercializing his invention
was not technical but legal. His provisional patent on a telephone transmitter,
substantially similar to the one invented by Bell and possibly older, led
Western Union to take take part ownership in WE to advance their
own plan to compete with AT&T as a telephone company. That set off a protracted
legal battle, whose end result included the termination of Gray's patent claim
and Western Union's abandonment of telephony.
AT&T was not the kind of company to leave things to chance, though, and least of
all when it came to competition. In 1881, AT&T acquired WE. From
that point on, WE was no longer a competitor, it was a core part
of the Bell System: the manufacturing and supply arm of AT&T. A few decades
later, WE had become the primary maker, and often sole supplier,
of every piece of equipment used in the Bell telephone network. Everything from
telephones to cables to central office switches were made at WE's various
works. What few components WE didn't make, it sourced, through an expansive
purchasing arm that negotiated orders on the behalf of the entire AT&T family.
In 1925, WE had become so dedicated to the Bell System that its remaining
non-telephone business, mostly local distributorships, was spun out into a
separate company (Graybar). From that point forward, the Bell System was not
only WE's sole shareholder but its sole customer as well.
As part of the 1925 reorganization, WE's research and development arm became
a new organization, jointly owned by WE and its patron AT&T: Bell
Laboratories. This new organization consolidated AT&T's expanding basic science
efforts with WE's manufacturing expertise, setting the stage for decades of
equipment that was conceived, designed, manufactured, and used within the AT&T
empire. Bell operating companies got everything they needed, from tools to the
telephones themse