AT&T

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At&t.JPG
Type: Public
Industry: Telecommunications
Founded: 1876
Founder(s): Alexander Graham Bell
Gardiner Hubbard
Thomas Sanders
Headquarters: Whiteacre Tower, Dallas, Texas
Country: USA
Employees: 258,870 Employees as of July 2011 [1]
Revenue: $ 113,239.0 billion as of 2010 [2]
Website: ATT.com
LinkedIn: AT&T
Key People
Randall L. Stephenson, Chairman, CEO & Pres.
John Stankey, CEO of AT&T Business Solution
Ralph de la Vega, CEO of AT&T Mobility & Co.
D. Wayne Watts, Sr Exec VP and General Counsel
James W. Cicconi, Sr Exec VP of External & Legislative Affairs

AT&T is an American multinational telecommunications company. As of 2010, it was considered the 7th largest non-oil corporation in the United States in terms of revenue,[3] 14th largest in market value,[4] and was ranked by Fortune Magazine as one of the 50 most admired companies.[5] The company's headquarter is located in Dallas, Texas.

Contents

History

Invention of the Telephone

The history of AT&T can be traced back to the time when Alexander Graham Bell invented the telephone. In 1875, Gardiner Hubbard and Thomas Sanders financially supported Alexander Graham Bell in inventing the first telephone.[6] On July 1, 1875, Bell was able to transmit speech sounds through electricity, although the sounds were unintelligible. Bell drafted a patent application and specification for his invention and labeled it as "improvement in telegraphy." He delayed his patent application because of a promise made to another investor, George Brown, that he would not file a U.S. patent until a patent was applied in Britain. However, Gardiner Hubbard filed the patent application to the United States Patent Office on February 14, 1876 without Bell’s knowledge. Bell received his first patent no. 174, 465 on March 10 on that same year. Bell continued experimenting with his device. On March 10, 1876, he used his latest design, a liquid transmitter hooked to an electric circuit, to transmit the first intelligible, spoken words to his assistant, Thomas Watson. At his end, Watson heard clearly Bell’s statement, “Mr. Watson, come here, I want you.”[7] Thus, the first telephone had been invented, and subsequently, on January 30, 1877, Bell’s second patent no. 186, 787 was issued by the U.S. Patent Office.[8]

American Bell Telephone Company

On July 9, 1877, Bell, Hubbard and Sanders established the Bell Telephone Company. The management of the company was primarily handled by Hubbard because Bell was not interested in becoming a businessman.[9] Bell Telephone Company acquired its first license to operate a telephone exchange in New Haven, Connecticut in 1878. [10] Hubbard hired Theodore Vail as the new General Manager of the Bell Telephone Company in 1878. Vail was responsible for creating the Bell System, the world's biggest telecommunications monopoly.[11] In 1880, Bell Telephone Company was incorporated in Massachusetts as American Bell Telephone Company.[12] In 1882, American Bell Telephone Company purchased majority shares of the Western Electric Company, which became its primary supplier for telephone equipment.[13]

The Establishment of American Telephone and Telegraphic (AT&T) Company

On March 3, 1885, American Bell Telephone Company incorporated its fully-owned subsidiary, the American Telephone and Telegraphic Company, known today as AT&T, to operate long distance communication in New York.[14] This allowed AT&T to get an unlimited amount of financial backing and the power to purchase, develop, own, license, and lease telephone lines, and ultimately to achieve their primary objective of connecting every town or city in the State of New York, and eventually every town and city from Canada, Mexico, and all other countries around the world.[15] Theodore Vail later became the President of AT&T. In 1892, AT&T opened its first long distance telecommunication service between Chicago and New York. The rate was $9 for 5 minutes.[16] In 1894, Bell's second patent expired and the competition in telephone communication business began. In 1899, AT&T became the parent company of the Bell System after acquiring all assets of the American Bell Telephone Company. In 1915, the San Francisco long distance communication line became operational.[17]

The Bell System: The Largest Telecommunications Monopoly

Theodore Vail, as General Manager, initiated management and organizational strategies that resulted in remarkable growth for the company.[18] Vail also succeeded in negotiating an out of court settlement in connection with a patent infringement case against Western Union in 1879. In the settlement, Western Union recognized Alexander Graham Bell as the inventor of the telephone and as such agreed that it will stay out of the telephone business. In addition, Western Union also transferred all of its patent rights on Elisha Gray and Thomas Edison's telephone inventions to Bell, making it so that all entities with interests in the telephone business would be licensed under the Bell patents. Furthermore, Western Union also agreed to pay 20% of the total cost of every newly-developed telephone patent. In return, Bell Telephone Company agreed that it would not enter into the telegraph business, and Western Union would be given a license to use Bell's telephone system to transmit telegraphic messages, and that it would be given 20% of all Bell telephone rentals and royalties.[19][20] The settlement agreement gave Bell Telephone Company full control over telephone technology and monopoly over the telecommunications industry. It also gave the company leverage to develop a well-founded national system: the Bell System.

The Bell System was composed of the American Telephone & Telegraph (AT&T) Long Lines, also known as "Ma Bell;" 22 regional operating companies known as "Baby Bells," which provide telephone exchange services and equipment within the United States; Bell Laboratories, the research and development subsidiary of AT&T; and the Western Electric Company, its manufacturing arm. The companies within the Bell System embraced the spirit of united service to the public, and were the biggest employer in America, where employees felt secured in their job.[21]

In 1887, Vail resigned as General Manager of the AT&T because of a conflict in management styles with his superiors. He was against compromising his management principles, and believed that the company needed to expand its service to attain growth, while his superiors believed that dividend was more important.[22]

AT&T continued to grow but the company incurred a large financial debt. In 1907, JP Morgan gain control of AT&T's debt financing and decided to convince Theodore Vail to serve as President of the company. Vail accepted the position on May 1, 1907. Under his leadership, Vail implemented the "One Policy, One System, One Universal Service." He also implemented good public relations and acknowledged that the Bell System is a natural monopoly cooperating with state regulation. He instituted standard operating procedures within the company and regained national control in telephone service. Vail retired in 1919, by which time AT&T's structure and operation were well established and modernized.[23]

Early International Expansion

AT&T started to expand internationally by supplying equipment to other telephone companies through its manufacturing subsidiary, the Western Electric Company, and its affiliates around the world. By 1914, AT&T's manufacturing subsidiary established locations in Antwerp, London, Berlin, Milan, Paris, Vienna, St. Petersburg, Budapest, Tokyo, Montreal, Buenos Aires, and Sydney.[24] Beginning in 1925, the new AT&T President Walter Gifford gave up the company's manufacturing business, including its international locations except those in Canada, and pursued the company's objective to provide a universal telephone service in the United States. The company also established its research and development subsidiary, Bell Telephone Laboratories, Inc. By 1927, AT&T successfully launched its first trans-atlantic telephone service from US to London using radio, which cost $75, while the trans-pacific telephone service between US to Japan was realized in 1934 at $39 for the first three minutes respectively. Both international telephone services were only able to accommodate one call at a time. The company's "TAT-1," the first trans-atlantic telephone cable, was launched in 1956. It had the capacity to accommodate 12 calls at a time and price was set at $12 for the first three minutes. In 1964, the first submarine telephone cable, "TPC-1," was inaugurated. In 1965, the world's first electronic switch was installed. The national emergency call number 911 was also introduced during that year. During the 1970s, international long distance call customer dialing was introduced to the public, and AT&T's network became computerized and had the initial capacity to handle a high volume of calls, as many as 350,000 per hour. Since then, AT&T has continued to expand its telecommunications service globally.[25]

The Bell System Divestiture

In 1974, the United States Department of Justice (DOJ) filed an anti-trust lawsuit against AT&T alleging the company with monopoly and conspiracy to monopolize the entire telecommunications industry, both equipment and services. AT&T denied the allegations and fought the case for five years in court, lobbying Congress to conduct hearings and amend the 1934 Communications Act which created the Federal Communications Commission (FCC), an independent regulatory body that conducted a full scale investigation of the telephone industry and implemented regulations to increase competition. In 1979, Charles L. Brown, then Chairman of AT&T, admitted that the company was prosperous in terms of revenue and and it had developed new technologies, but the company was facing difficulties in pursuing its business operations and implementing its new technologies because of legal battles and regulations, in particular the U.S. antitrust lawsuit. In 1982, Brown initiated a settlement agreement with the Department of Justice through U.S. Attorney General William Baxter.[26] Both parties reached a settlement agreement January 8, 1982. AT&T agreed to divest the 22 Bell operating companies. In return, the DOJ dissolved the 1956 Consent Decree which had limited AT&T's business operations to common-carrier communications services, forced it to license its inventions to all interested parties, and limited its manufacturing subsidiary, the Western Electric, to manufacture equipment only for the use of Bell operating companies. The divestiture, which took effect on January 1, 1984, dissolved the Bell System.[27] Its 22 local operating companies were divided into seven independent companies to handle the regional telephone services in the United States. The seven independent companies include: Bell South, Bell Atlantic, NYNEX, American Information Technologies, Southwestern Bell, US West, and Pacific Telesis.

The New AT&T

A reorganized AT&T was born after the divestiture. The company retained its long distance telephone service, manufacturing, research and development operations. The company also retained $34 billion in assets out of $149.5 billion, 373,000 employees out more than 1 million employees, and minority shares in Cincinnati Bell and Southern New England Telephone and Telegraph Company. The company also adopted a new logo, the stylized globe with "AT&T" monogram. The company's long distance business underwent a strong competition but remained financially stable. In 1984, AT&T served an average of 37.5 million calls per day and by 1999 increased up to 270 million calls. In 1991, AT&T acquired NCR Corporation, a computer manufacturer, for $7.3 billion and subsequently purchased McCaw Cellular in 1994 for $11.5 million. The company was renamed AT&T Wireless. AT&T Network Systems, the company's manufacturing branch, emerged as a strong competitor and succeeded in positioning AT&T again as a global business by establishing join ventures and factories in other countries such as China, Japan and the Netherlands.[28]

In 1995, AT&T restructured itself into three publicly traded companies: AT&T, which remained a communication company; Lucent Technologies, a systems and equipment company which became officially independent on September 30, 1996; and NCR, a computer company, which became independent on January 1, 1997.[29]

AT&T transformed its business operations from long distance service provider to an integrated voice and data communications company after President Bill Clinton signed the Telecommunications Act of 1996. The new law opened the doors for competition among companies providing both local and long distance communications. In 1999, AT&T again entered the local market by offering the "AT&T Local One Rate" in New York. Prior to AT&T's acquisition of Media One, the largest cable company in the United States, in 2000, the company also merged with the cable company TCI. During the fourth quarter of 2000, the company yet again reorganized into three separate publicly-held companies: AT&T Wireless, AT&T Broadband and AT&T.[30]

In 2005, SBC Communications Inc. acquired AT&T for $16 billion and decided to adopt AT&T as the name of the company. The two companies combined their capabilities in providing consumers with innovative and high quality wireless communications and broadband experience, integrated with voice, data and video services. The new AT&T was geared to become globally competitive in the 21st century.[31] [32]

Today, AT&T is considered the fastest mobile broadband network provider and wireless carrier in the United States, with the largest international coverage. AT&T also provides the AT&T U-verse TV and the AT&T Direct TV.[33] The company has 95.5 million wireless subscribers with voice coverage in 220 countries, data roaming in 200 countries and mobile broadband in 130 countries. Its wired services (broadband, local, and long distance calls) are concentrated within 22 American states.[34] AT&T is also a global provider of IP networks, Internet connectivity, web hosting, among other related services, as well as operator of a number of DNS servers and routers.[35] AT&T uses MelbourneIT as its backend provider for registrar services to its web hosting customers.[36]

Awards

AT&T received numerous recognitions from various organizations for its corporate, innovation, wireless, business, people and social responsibility activities and operations. It's recent awards include:

  • BrandZ - 7th Most Valuable Global Brand & Most Valuable Global Brand in the Telecommunications Industry (2011)
  • Global Telecoms Business - The GTB Power 100- Randall Stephenson ranks #1 out of the 100 most powerful telecoms executives (2010)
  • Connected World - AT&T is No. 1 for connected devices (2011)
  • Current Analysis - AT&T is U.S. leader in M2M solutions (2011)
  • The Patent Board - AT&T is third on the telecommunications patent scorecard (2011)
  • Frost & Sullivan - 2011 Product Leadership of the Year Award for mobile enterprise applications (2011)
  • Business Traveler Magazine - Best Mobile Phone Coverage in the World (2011)
  • Global Mobile Awards - AT&T connected Vitality GlowCaps (2011)
  • Frost & Sullivan - North American Mobile Network Strategy Award (2011)
  • Brand Keys - AT&T is the top-ranked wireless phone service brand in the 15th Annual Brand Keys Customer Loyalty Engagement Index (2011)
  • RadioShack Annual Partnerships Awards - Postpaid Carrier Award (2011)
  • IP&TV Industry Award - Best Multiscreen TV Service, AT&T U-verse TV (2011)
  • Frost & Sullivan - Product Leadership of the Year Award for Mobile Enterprise Applications (2011)
  • Frost & Sullivan - Best Brand for Mobile Workforce Management (2011)
  • Current Analysis - AT&T listed as the No. 1 provider in the U.S. enterprise mobility space among top-tier carriers (2011)
  • Current Analysis - AT&T is a top competitor in the managed mobility space cited for innovation, telecom expense management and logistics (2011)
  • Frost & Sullivan - Company of the Year for North American Business Communication Services (2011)
  • Gartner Vendor Rating - AT&T Earns Corporate University: Xchange Award for Leadership Development (2011)
  • Vault, Inc. - Top 10 Finance Internships (2011)
  • Workforce Diversity for Engineering and IT Magazine - Top 50 Employers (2011)
  • DiversityInc - One of the Top 50 Companies for Diversity ranked No. 3 (2011)
  • Corporate university - Xchange Award for Leadership Development (2011)
  • Women's Engineer Magazine - One of Top 50 Employers (2011)
  • Corporate Responsibility Magazine - 100 Best Corporate Citizens (2011)[37]

AT&T & ICANN

In 1998, AT&T was one of companies supporting the establishment of ICANN as an independent, private, non-government corporation to take over the management of the Domain Name System (DNS). AT&T's former Vice President for Internet and Internet Governance Advocacy, Marilyn Cade, actively represented the company's views and recommendations regarding the different activities, issues and policies of ICANN, such as the proposed agreements between NSI, Department of Commerce and ICANN in 1999,[38] the WIPO Final Report,[39] and many other issues until her resignation from the company in 2004. Jeff Brueggeman, Vice President Public Policy for AT&T, currently represents the interests of the company to ICANN.[40] He is a member of the Commercial Business Users Constituency. In 2010, he volunteered to participate in the Security, Stability and Resiliency (SSR) Review Team.[41]

In 2009, AT&T submitted its comments to the National Telecommunications Information Administration regarding ICANN's Joint Project Agreement with the United States Department of Commerce on the Assessment of the Technological Coordination and Management of the Internet Domain Name and Addressing System. The company emphasized its strong support of ICANN and admitted that the success of the Internet governing body in managing the DNS is important because it affects AT&T's consumers, network, and business. The company also expressed that it had a direct interest in the predictability, resiliency, security and stability of the DNS. In addition, AT&T emphasized that ICANN needed a meaningful accountability and opined that the Internet governing body had not yet matured as a trustworthy steward of the Internet, based on the White Paper. AT&T explained that ICANN had thus far refused to take significant steps to become fully accountable to the Internet community; however, ICANN's stakeholder groups were prepared to take constructive actions to develop and implement strategies for accountability to ensure ICANN's success. Furthermore, AT&T shared the following recommendations to help improve ICANN as an independent, accountable and sustainable organization:

  • ICANN must develop a charter explaining its mission and responsibilities to the Internet stakeholders.
  • Develop formal administrative procedure in decision-making.
  • Improve the corporation's accountability strategies and create an independent adjudicatory panel.
  • Improve the internalization and participation of the Internet stakeholders community.[42]

References

  1. No, of Employees
  2. Financials
  3. Fortune 500 2010: Annual Ranking of America's Largest Corporation
  4. Forbes Global 2000 Leading Companies
  5. AT&T Press Release
  6. Origins of AT&T
  7. Inventing the Telephone
  8. The Bell telephone: The deposition of Alexander Graham Bell…
  9. Inventing the Telephone
  10. Origins of AT&T
  11. Telephone History: The Early Years
  12. Telecommunications Virtual Museum
  13. Milestones in AT&T History
  14. Bell System The Bell System from "Encyclopedia of Telecommunications" - Charles L. Brown Copyright (c) 1991 by Marcel Dekker, Inc.
  15. History of the AT&T Network
  16. AT&T First Long Distance Communication
  17. Origins of AT&T
  18. The Bell Western Union Patent Agreement of 1879
  19. The Bell Western Union Patent Agreement of 1879
  20. Boston Daily Advertiser: The Telephone Settlement, Oct. 25, 1879
  21. The Bell System
  22. Corporation Is Born AT&T (Long Lines) Appears and Mr. Vail Exits
  23. Corporation Is Born Mr. Vail Goes to Work
  24. A Brief History: Early International Activity
  25. Milestones In AT&T History
  26. The Decision to Divest,Incredible or Inevitable?
  27. Divestiture and Restructuring - The End of the Bell System
  28. A Brief History: Post Divestiture
  29. A Brief History: The New AT&T
  30. Milestones in AT&T History
  31. SBC to Acquire AT&T
  32. SBC Communications to Adopt AT&T Name
  33. AT&T Company Information
  34. U.S. Presence and Global Reach
  35. Letter from AT&T to ICANN, 7 October 2003
  36. AT&T Domain Name Registration Agreement
  37. Awards and Recognition
  38. Corrected Copy- AT&T Comments-DOC-ICANN-NSI
  39. 4th WIPO Panel of Experts member signs ICANN petition
  40. Jeff Brueggeman-SSR Review Team Applicant
  41. Statement of Interest
  42. Assessment of the Transition of the Technical Coordination and Management of the Internet’s Domain Name and Addressing System
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