The Beginnings of AT&T
ATT logo 1891

The image above shows the logo for AT&T which at the time was a wholly-owned subsidy of the National Bell Telephone company.

AT&T, the American Telephone and Telegraph Company has its foundations in 1875 with an arrangement between inventor Alexander Graham Bell and the two men, Gardiner Hubbard and Thomas Sanders, who agreed to finance his work. This was the time when Bell was attempting to invent a 'talking telegraph'. With Hubbard and Sanders' backing Bell filed patents for the telephone in 1876 and 1877.

In 1877, superseding their earlier agreement Bell, Hubbard and Sanders formed the Bell Telephone Company to exploit the invention with stock issued to seven original share-owners. Though this only followed an attempt by Bell and his partners Hubbard and Sanders to sell the patent outright to Western Union for $100,000. The president of Western Union balked, countering that the telephone was nothing but a toy.

The first telephone exchange, operating under license from Bell Telephone, opened in New Haven, CT in 1878. In 1879 the Bell company acquired Edison's patents for the carbon microphone from Western Union. This made the telephone practical for long distances and the company was renamed the National Bell Telephone Company that same month. Within three years, telephone exchanges existed in most major cities and towns in the United States, operating under licenses from what was now the American Bell Telephone Company.

In 1880 the management of American Bell created a project to create a nationwide long-distance network with a commercially viable cost-structure. This project was formally incorporated into a separate company christened American Telephone and Telegraph Company on March 3, 1885 though it was a wholly-owned subsidiary of American Bell. Starting from New York the network reached Chicago, Illinois in 1892 and then San Francisco in 1915.

In 1882 the National Bell Telephone Company made a strategic purchase by obtaining a controlling interest in the Western Electric Company from Western Union. The Western Electric Company now effectively became their manufacturing unit. Bell's original patent on the telephone actually ran out in 1894 but the company by this time was much larger that any potential rival and it's much larger customer base allowed the company's substantial growth to continue. Despite this, between 1894 and 1904, over six thousand independent telephone companies went into business in the United States, and the number of telephones boomed from 285,000 to 3,317,000. Many previously unwired areas got their first telephone service, and many others got competing companies. But the multiplicity of telephone companies produced a new set of problems in that there was no interconnectivity between companies and subscribers to different telephone companies could not call each other – a situation which only began to be resolved after 1913.

On December 30, 1899, AT&T acquired the assets of American Bell, and became the parent company of the Bell System. But the growth of Bell revealed another major problem with telephony — electrical signals weaken as they travel down telephone wires. Building a national telephone network was thus dependent on the emergence of several inventions. Loading coils, invented independently at AT&T and elsewhere (1899), allowed the network to be extended as far as Denver. But it wasn't until AT&T developed the first practical electrical amplifiers in 1913 that transcontinental telephony became a practical possibility. National long distance service reached San Francisco in 1915. Transatlantic services started in 1927 using two-way radio, but the first trans-Atlantic telephone cable did not arrive until 1956, with TAT-1.