What was the Bell System? The Bell System, or “Ma Bell”, was the system of companies that, headed by American Telephone & Telegraph (AT&T) from 1899 until 1984, when the system was broken apart by a federal mandate from U.S. Judge Harold Greene, acted as a unified entity in providing telephone service to much of the United States and Canada, as well as, at times, other areas around the world.
Was the Bell System a monopoly? At times. Modern society tends to view monopoly as inherently evil and something to stay away from; however, telephony, like telegraphy, water, electricity, water, and other utilities, is inherently a natural monopoly. A single cooperating system is able to more effectively provide better service than competing systems. Today, the Bell System is remembered for providing universal, reliable, quality service and for pioneering many frontiers in telephony and beyond. The Legacy of the Bell System is one that is remembered not only by telephone hobbyists, but also by those who recall its great service, empowered employees, and its omnipresent will to do good.
The Bell System Divestiture, an agreement reached between AT&T and the Federal Government in 1982 and executed on the dawn of 1984, was the largest anti-trust settlement in history. It swept from AT&T, then the world’s largest corporation with assets worth twelve times Fort Knox and an annual revenue of $69 billion, the local telephone companies, and reorganized them into 7 Regional Bell Operating Companies (RBOCs) or “Baby Bells”, none of which still exist in their original divested form today. Even prior to Divestiture, many were concerned about the grave mistake they feared Judge Greene would, and did, make. While Judge Greene has long since passed, the troubles America has had to deal with as a result of Divestiture have continued to plague us to the current day. Today, there is no question that the Bell System Divestiture, the most significant anti-trust settlement in history, was a huge mistake. More than a score and a decade later, we are still dealing with the repercussions of the ruining of the world’s best telephone system.
More than just a mistake to learn from, Divestiture represents a tragedy that must be rectified. America, once home to the world’s best telephone service, now simply plays host to mediocre service provided by various competing entities. Today, traditional wireline telephone service has become less profitable and has declined in quality. Judge Greene, in one fell swoop in 1982, set into motion a series of events that would ultimately decimate wireline telephony and culminate with the calamity that is the “new” AT&T that we know today.
What has happened to the rest of the Bell System? What has become of Western Electric, the robust manufacturing arm of the Bell System that prided itself in high-quality and lasting products? What has become of Bell Laboratories, once the world’s premiere research and development organization? And what has become of the “Baby Bells”, Greene’s attempt to rid America of monopoly?
Without the large customer base the Bell System had guaranteed, Western Electric became unprofitable and AT&T divested of it in 1996, as the government had asked it to do previously in 1949. How lives it today? Much of Western Electric was absorbed by Lucent, which later merged to become Alcatel-Lucent. Some of it was spun off by Avaya and became part of CommScope. Of the many that leased Western Electric telephones prior to Divestiture, a few still lease them today through QLT Consumer Lease Services. The Western Electric brand name itself survives as the trademark of the Western Electric Export Company, an Alabaman manufacturer of vacuum-tubes.
Bell Labs, once the most innovative organization in the world, has fared somewhat better, albeit not much. Originally half-owned by AT&T and half-owned by AT&T’s manufacturing subsidiary, Western Electric, Bell Labs is now owned by the Finnish company Nokia and uses the name Nokia Bell Labs. Sadly, they are no longer at the forefront of research and development as they once were. Bell Labs, stripped of the regular subsidies it received from the local telephone companies post-Divestiture, quickly dried up without the large funding the Bell System had provided.
The original “Baby Bells” have all died, but they have given birth, merged, and been bought many times to yield today’s telecommunications corporations. The original “Baby Bells” were Ameritech, Bell Atlantic, BellSouth, NYNEX, Pacific Telesis, Southwestern Bell, and US West. In 1997, Bell Atlantic merged with NYNEX and relocated headquarters to New York, although Bell Atlantic was the surviving company. In 2000, Bell Atlantic acquired General Telephone & Electric (GTE), once the largest independent telephone company in the US, and renamed itself to Verizon. Also in 2000, US West merged with Qwest Communications International, and in 2011, Qwest merged with CenturyLink. And what of the other four “Baby Bells”? Southwestern Bell became a little ambitious. Southwestern Bell became SBC Communications, and acquired Pacific Telesis in 1997 and Ameritech in 1999, and in 2006, bought AT&T, then a company very much on the decline, and then renamed itself AT&T. Shortly after, the “new” AT&T acquired BellSouth, then the last original “Baby Bell”. And remember AT&T Long Lines? In 2010, the “new” AT&T acquired AT&T Communications, formed in 1984 as a result of Divestiture, consolidating 10 of the 22 original telephone companies as well as the “old” AT&T’s original long-distance division under its corporate umbrella. Despite this seemingly natural return from many smaller companies to fewer but larger companies, the Bell System has not been resurrected.
That’s where we come in. This website commemorates The Bell System and also lays out a framework for recalling it into existence. Reinstating The Bell System will not be easy, which is why dedicated Bell System experts are working tirelessly to develop action plans for the reinstatement of The Bell System in all its former glory.
If you’d like to join The Bell System Board — a committee of Bell System Experts dedicated to reinstating the Bell System in all its former glory — please get in touch with us. We are always in need of more team members!