Chapter 2


In 1915, the first transcontinental phone call was made from New York to San Francisco. Now, the globe is interconnected via various traditional, wireless, and Internet-based technologies. Innovation has been constant—sometimes faster, sometimes slower. And by understanding the past and how we arrived at the present, investors can have a better idea of where Telecom may be going.

This chapter briefly documents the early development of the Telecommunications sector in the United States and the regulation that transformed it.


The history of telecommunications is ancient. And while we could begin with smoke signals, they didn’t present much of an investment opportunity. For our purposes, we’ll start with the telephone—the birth of the Telecom sector as we know it.

Alexander Graham Bell—Father of the Modern Telephone

Alexander Graham Bell is recognized with inventing the first practical telephone. (Less well known is that he had a deaf mother and wife and was a third-generation elocutionist who taught Helen Keller.) But it was a race to the finish line. Elisha Gray (an assistant to Thomas Edison) and Bell filed similar patents on the same day in 1876. Bell ultimately received the patent, though he was accused of stealing the telephone from Gray, and numerous lawsuits ensued. The accusations still fly to this day, but no matter—Bell subsequently created the Bell Telephone Company in 1877, which evolved into the American ...

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