4. How did the Bell system secure a monopoly?

Telecom Milestones

Alexander Graham Bell patented the telephone on March 7, 1876, just hours ahead of rival inventor Elisha Gray. Bell’s initial experiments were an attempt to enable a telegraph wire to carry simultaneous messages. His backers were intent on developing new technology to challenge the Western Union telegraph monopoly.

Bell succeeded beyond his expectations. On March 10, 1876, he placed what now ranks among the most important telephone calls in history. To his young assistant in an adjacent room he said, “Mr. Watson, come here. I want to see you.”

Telephone technology took another leap in 1891, when Almon Strowger, a Kansas City undertaker who was fed up with nosy operators, patented a “switch” that could automatically relay calls to their destination without operator assistance.

Daily telephone use in the United States grew from four calls per 1,000 people to 37 calls per 1,000 people between 1876 and 1894.[6] But once the Bell patents expired, thousands of competitors began wiring the nation, increasing the daily calling average per 1,000 people from 37 in 1895 to 391 in 1910. By 1907, Bell rivals controlled 51 percent of local telephone service.[7]

Michigan’s first local telephone company, Ontonagon Telephone Co., emerged in 1877, when an Upper Peninsula businessman strung a line between his inland office and the Lake Superior port at Ontonagon.[8] By the century’s turn, some 200 telephone companies were providing service in the state.