Scroll through our interactive timeline to learn how telecommunications went from an expensive monopoly service to a commodity that developers can integrate into everyday business applications through cloud communications APIs.
Telecommunications has come a long way in just a few decades. Until the early 1980s, party lines—telephone loop circuits where multiple homes would share a single phone line—were a common fact of life. Each house on a party line had its own handset, but they were all on one line. If someone called one house, the phones rang in all the houses connected to that party line. If you picked up the receiver while one of your neighbors was already on the line, you’d hear their conversation.
Now think about the number of ways in which you can make a voice call today. There’s your cell phone, of course, but you probably also have a Skype account ,and you almost certainly have either FaceTime, Google Hangouts, or both. Oh, and let’s not forget the landline phone sitting on your work desk or at home (which, by the way, could just as likely be delivered over the internet by a provider such as Vonage as by your local legacy provider).
What was once an expensive, rationed medium is now almost ubiquitous. Until recently, the story of telecoms was one of technological progress in the face of limited availability and regulatory rigidity. Today, we’re living in a post-scarcity telecoms age where invention is in the hands of software developers wielding communications APIs.
This is the story of how telecommunications became decoupled from physical equipment and weaved its way into almost every part of our lives.
Leading Up to the Telephone
A telegraph message could reach halfway around the globe in minutes. Technology was making rapid progress and work soon turned to making more efficient use of existing telegraph infrastructure and to the transmission of sound.
- The first commercial telegraph line opens in London (1837)
- The first subsea telegraph line opens between England and France (1850)
- German inventor Johann Reis transmits his voice to another room using his “telephon” (1861)
- Edison creates the Quadruplex telegraph, capable of sending two signals in each direction at once (1874)
- Alexander Graham Bell experiments with a “harmonic telegraph” to squeeze ever more traffic down one telegraph line (1874)
The Invention of the Telephone As We Know It
By the mid-1870s, the telegraph had become the “nervous system of commerce,” according to Western Union President William Orton. His company’s near monopoly on the telegraph in the U.S. spurred inventors to experiment. Some looked to help Western Union improve its position, while others were keen to create competition.
Boston attorney Gardiner Greene Hubbard funded inventor Alexander Graham Bell in his efforts to improve the capacity of telegraph lines. Hubbard wanted to create something that would break Western Union’s grip on the telegraph, but it’s unlikely he imagined just how successful he and Bell would be in realizing that aim.
Working with electrician Thomas Watson, Bell experimented with harmonics as a way of sending multiple telegraph messages down one line. However, what drove him was the idea of sending speech by wire.
While others had made similar experiments, Bell and Watson were the first to develop a relatively robust device that had commercial potential. Perhaps most importantly, Bell was first to the patent office on March 7 1876. His rival, and Edison collaborator, Elisha Gray also submitted a patent application for a telephone-like device later that day. Later, other inventors surfaced claiming to have predated Bell’s device.
That’s not to take anything away from Bell’s achievement. Bell’s was the first practical electromagnetic telephone and, arguably, his real legacy was the commercialization of telecommunications. That story of building on others’ work is typical of how telecoms continues to develop today.
Edison Enters the Fray
Alexander Graham Bell’s patent was just the beginning. The device was primitive and there was no network: instead, each phone line was strung between two fixed points.
This led to a period of rapid innovation, and it’s hard to write about American innovations of that time without the name Edison cropping up.
Thomas Edison had been experimenting with the electrical transmission of sound around the same time as Bell, and he invented his own version of the telephone shortly after. Edison’s telephone featured an improvement on Bell’s microphone but was otherwise similar. Despite the risk of infringing on Bell’s patent, Western Union saw Edison’s device as an opportunity to enter the telephony market. Together with Edison, they created the short-lived American Speaking Telephone Company.
Both the Bell and Edison versions of the telephone were taken up by subscribers in the United States and their patents licensed to operating companies around the world. In 1878, The Telephone Company began business in the United Kingdom using the Bell patents, and Australia saw its first telephone line operational a year later in Melbourne.
The Telephone Exchange
However, the telephone remained little more than a niche device until the advent of the telephone exchange.
Edison’s colleague, Tivadar Puskás, had been experimenting with telegraph exchanges and applied his thinking to the newly invented telephone. Then in 1878, the Bell affiliate in New Haven, Connecticut, opened the first commercial telephone exchange in the United States.
Meanwhile, the question of whether Edison’s telephone infringed on Bell’s patent didn’t go away. Rather than face a drawn-out legal battle, Western Union gave up its independent telephony ambitions and allowed its American Speaking Telephone Company to merge with The National Bell Company. The resultant American Bell Telephone Company evolved into AT&T, and so began the story of the one company that did most to shape—and perhaps constrain—telecommunications in the 20th century. Importantly, this consolidation laid the groundwork for a single telephone network to evolve rather than many incompatible competing systems.
Going Long Distance
Just like the telephone itself, the telephone exchange and network had been the subject of experiments by many. However, it took that first successful commercial implementation in New Haven, Connecticut, to transform the telephone from a point-to-point device to becoming a network that could connect subscribers to any other subscriber.
From there, long distance became viable.
In the U.S., work began on AT&T’s “long lines” network, reaching Chicago by 1892. However, it wasn’t until the invention of the induction coil in 1899—a device that prevents signal distortion on longer lines – that the network was technically capable of spanning the entire continental United States.
In 1914, the AT&T network finally connected New York to San Francisco, and on January 25, 1915, Alexander Graham Bell stood in the New York offices of AT&T to repeat his famous line to Thomas Watson: “Mr. Watson, come here. I want to see you.” Watson replied, “It would take me a week to get to you this time.”
The telephone network was now spreading not only across countries but also across the world. Where distances were short enough, cables connected national networks together and an international network began to form.
Spanning the Ocean
The Atlantic Ocean, however, presented a somewhat larger challenge. Telegraph cables had spanned the ocean, with varying levels of success, since 1858, but reception was so poor that it could take two minutes to transmit a single Morse character. Without better insulation, repeaters, and improved repair technology, the cables of the time could not handle voice communication across the ocean.
Instead, the first phone link between Europe and America came by radio in 1927. Limited capacity meant that calls had to be booked sometimes weeks in advance and cost $6 per minute, the equivalent of around $80 today.
Radio continued to play an important part in the spread of the telephone, and in 1947, AT&T built its first microwave link. Using eight relay stations, the system connected New York with Boston. By the 1950s, the existing cable-based networks were augmented across the United States and Europe with new microwave links, proving cheaper and easier to maintain than cable in the right circumstances.
However, cable wasn’t done. Microwave links were suitable only where line of sight could be maintained. For the transatlantic radio telephone link, broadcast shortwave radio had been used, which limited privacy, capacity, and quality. In 1956, the first transatlantic cable—TAT1—connected Scotland to Newfoundland, allowing for 35 simultaneous telephone calls and 22 simultaneous telegraph transmissions.
Whatever the technology used, the driving ambition of this period was to see the world encircled by the telephone network. In 1964, the TPC-1 cable connected the continental United States to Japan via Hawaii. The circle was complete. Not long after, the first commercially viable communications satellites went into operation and, for a time, cable seemed terribly old fashioned.
A Natural Monopoly
European countries chose nationalized telephone monopolies as a matter of policy but AT&T was a private monopoly. That piqued the interest of antitrust regulators.
In 1913, AT&T and the U.S. Department of Justice struck a deal: AT&T would be allowed its monopoly so long as it fell under the regulation of the new Federal Communications Commission, sold its stake in Western Union, and allowed non-competing local providers to connect to its long-distance network.
That gave AT&T the power to decide what telecoms meant and the vast income to invest in what would come next.
It was during this period that many of the things we take for granted came into place, including direct dialing, telephone numbers, and digital exchanges. Teams at Bell Labs, AT&T’s research arm, were responsible for an astoundingly diverse range of discoveries and inventions that still shape how we use telecoms today. Other national monopolies, such as the UK’s General Post Office (later BT), played similar roles.
While these monopolies allowed for the spread of a single, global, telephone network, their usefulness began to wane in the 1960s.
Sidebar: Bell Labs Innovations
- Fax machine (1925)
- Long-distance transmission of live television images (1927)
- First binary digital computer (1939)
- First practical photovoltaic cell (1954)
- First transistor (1956)
- Unix operating system (1969)
- C programming language (1972)
- Discovery of cosmic microwave background radiation (1978)
- Digital cellphone (1980)
- Forerunner of WiFi (1995)
Competition Opens Up
The 1980s changed everything in telecoms. AT&T lost its mandated dominance of the American market, as did British Telecom in the U.K. Within time, alternative providers would enter almost every telecoms market in the world.
Cell phones provided another form of competition and helped bring a raft of new telecoms providers into the daily lives of business and leisure users.
Arguably, though, fibre optics did more to change telecoms than any other innovation since the telephone exchange. One thread of glass fibre, the width of a human hair, could carry as much voice traffic as thousands of copper lines. Suddenly, the limits within which telecoms had operated for decades were no longer applicable. Communication was almost unbound.
That’s not to say fibre was without its costs: laying subsea fibre costs between $28,000 and $90,000 per kilometer. But fibre made the internet we know today possible and, in turn, made instantaneous communication a commodity rather than the expensive luxury that it had been throughout the 20th century.
Voices Across the Internet
In 1991, just a few months after the world’s first website, software engineer Brian Wiles moved from the U.S. to work in the European office of Autodesk. He realized that collaboration with colleagues in the American office would be costly using conventional phone lines. So he created NetFone, the world’s first internet calling software.
Unlike telephone providers, who charged depending on the destination of a call, data carried over the internet cost the end user the same whether it was heading to the next city over or halfway around the world. Within 10 years of NetFone, internet calling was commonplace, and pioneers such as Vonage packaged internet telephony into services that could be easily consumed by businesses and consumers alike.
Competition—both from traditional telecoms providers and internet upstarts—proved difficult for the behemoths of old. In 2005, AT&T succumbed. SBC, one of the regional providers it was forced to spin-out in 1984, purchased AT&T Corporation and adopted its name.
But the internet’s influence on telephony hasn’t just been about lower charges or changing corporate structures.
Telecoms as Just Another Interface
Just as Bell’s original telephone took ideas from telegraphy and other inventors of the time, software developers pull together tools and infrastructure to create something new. The cloud revolution of the past 10 years has doubled down on that culture, with companies providing services specifically designed to be mashed up into new apps and services.
These companies provide APIs—a simple way for software developers to include external functionality in their own software—that deliver all manner of services.
Need to send an email from your app? There’s an API for that. Need to check a customer’s credit score? There’s an API for that. Need to send an SMS? There’s an API for that.
Telecoms has been transformed from an expensive, restrictive, monopoly service to a commodity that anyone can build into their applications.
Companies like Nexmo offer low-cost telecoms services through easy-to-use APIs, meaning that now app owners can verify a new customer with an automated voice call or send monthly balance reminders via SMS.
We’re on the verge of another revolution in how we think about telecommunications. Whether it’s AI running contact centers or contextual conversations that span chat, voice, and SMS, cloud communication APIs have democratized telecoms innovation. It’s no longer restricted to the hallowed labs of a handful of providers.
Welcome to the API-driven telecoms future.