1/6/2008Lesson 11 Telephony is not a pure science like chemistry or physics. It is not even computer science. Telephony has evolved from the first successful voice communication after invention of the telephone. The business and government regulations have impacted the telephony evolution so much that learning telephony without understanding these influences is not easy. Why history?

1/6/2008Lesson 12 History of Telecommunication In 1876, Alexander Graham Bell was awarded a patent for inventing the telephone set. Some say a German inventor named Dr. Elisha Gray had actually invented the telephone before Bell but was too late in filling at the U.S. patent office. This all led to the birth of telecommunication industry, which has proliferated to the point that we can not live without it.

1/6/2008Lesson 13 The First Telephone Companies The first competitive telephone company to form was the American Speaking Telephone Company. It was founded by Western Union Telegraph Company and used the receiver and transmitter used by Gary and Edison. The Bell Telephone Company was actively challenging the American Speaking Telephone Company’s position on the basis that the company’s use of telephony were infringements on Mr. Bell’s patent. The New England Telephone Company followed the development after these two companies, in building both telephones and network services. Problem existed with this whole scenario Interconnectivity did not exist. That is, if you needed to speak to three different business that used the services of the three operating companies, you would need three separate telephone lines and three different telephone sets on your desk.

1/6/2008Lesson 14 The Regulatory Scene The industry was rampant with suits and counter-suits during the early stages of deploying the networks. Many of the cases had a bearing on the future of the industry, in particular with the formation of the Telephone Companies as monopolies. Through these events, AT&T ultimately emerged as the dominant force in the market. All of this happened in the first 23 years of the industry. Many smaller companies started up. By the 1920s nearly 9000 independent telephone companies were in operation. This number shook out a little because AT&T would not let the independents interconnect to the AT&T network. As a result, many were financially strapped and went bankrupt. AT&T began acquiring these failing operations, causing the number of independents to diminish. By 1995 there were 1400 independent operating companies still in existence.

1/6/2008Lesson 15 Graham-Willis Act The 1921 “Graham-Willis Act” established the Telephone System as a natural monopoly. For years AT&T had dominated the industry, providing all telephone equipment and service through its normal distribution channels, the telephone companies. The network was the sacred cow, with only AT&T products and services allowed for interconnection to networks. The philosophy was that any other product might harm the network, thereby keeping the monopoly over the products and services to be installed.

1/6/2008Lesson 16 Introduction of Competition The pressure from public and small companies against monopolistic practices of AT&T resulted in the institution of an FCC registration program for all products that could be attached to the telephone network in In the 1960s, a small microwave carrier company (MCI) began constructing a microwave network between Chicago and St. Louis. MCI’s initial intent was to provide alternate private line services in a high-volume corridor. MCI took its interconnection request to the courts and won the ability to interconnect its network with the telephone company network. MCI prevailed and began the “other common carrier” industry.

1/6/2008Lesson 17 The Divestiture Agreement The most monumental decision since the inception of the monopoly was made in The courts demanded the breakup of the Bell system under the Modified Final Judgment (MFJ). The MFJ basically considers the provisioning of local dial tone services as a monopoly and everything else shall be a competitive operating environment. Therefore, the local dial tone business provided by the local exchange carriers would remain regulated and AT&T could pursue and operate in the competitive long distance, equipment manufacture, and sale markets.

1/6/2008Lesson 18 The Impact of MFJ 23 Bell Operating Companies were divested from the organization of AT&T (which retained its Western Electric Manufacturing, Bell Labs, and Long Lines Divisions). Following are the main impact of MFJ on the industry and services provided: All long distance services, links, personnel, and other facilities had to be relinquished by the BOCs (Bell Operating Companies) and turned over to AT&T Equal access for all interexchange carriers into BOCs switching system must be provided. This breaks down the special privilege that AT&T enjoyed over its competition. The equal access for all carriers was to be provided within two years.

1/6/2008Lesson 19 The Impact of MFJ … Carrying calls between and among offices was defined as local exchange services and interexchange services. The local exchange carriers (LECs) would hand off any call of an interexchange basis to an interexchange carrier (IEC). To define the boundaries of who carries the call and who shares in the revenue, a number of Local Access and Transport Areas (LATAs) were created. The calls inside a LATA were the responsibility of the LEC and calls that left the LATA were the responsibility of the IEC.