Ma Bell is laughing at us…

Some of you who read WHATT on a regular basis may be old enough to remember who Ma Bell is.  For those of you reading this that have never known anything else other than a handheld electronic brick, Ma Bell was the nickname of AT&T from 1876 until their natural monopoly was broken up by the U.S. Justice Department between 1974 and 1983.  For 107 years, Ma Bell was the only game in town for telecommunications in the home and for business.  What many folks these days don’t know is that they also were the sole provider of connectivity for television networks (for which there were only ABC, NBC and CBS for many years) and also for many government communications between the various armed services and government agencies.
We always had the latest and greatest phone equipment in the home thanks to the wholly owned subsidiary  of AT&T, Western Electric.  WE also provided the switching equipment for the the vast majority of telephone connection offices, known as central offices.  They made the microwave transmissions towers that telephone and television transmitted over via AT&T Long Lines department.  Together with Bell Laboratories, AT&T’s research and development arm, they developed the first telecommunications satellite, Telstar 1, which was launched and began operation in July 1962.
The satellite was built by a team at Bell Telephone Laboratories, including John Robinson Pierce, who created the project; Rudy Kompfner, who invented the traveling wave tube transponder used in the satellite; and James M. Early, who designed its transistors and solar panels. (Wikipedia).  It remained in service until early 1963.  Though Telstar’s life was extremely short by today’s electronic standards, it set the stage for about a dozen Telstar satellites over the next 43 years.
Ma Bell had a tremendous number of “firsts”. They basically invented telecommunication, the equipment therein and produced 7 Nobel prize winners in its history beginning in 1937.  They had the first public cellular network up and running in Chicago in 1977, invented faxing, automated billing, fiber optics and while they were not directly responsible for inventing the internet, Bell Labs developed all the interconnect equipment that allowed the first IP message to be sent from UCLA to Stanford in 1969.
Then, on January 1, 1984, it was over.
If you believe Melvin Barger, when he said in his essay, “What Killed Ma Bell?“, then one may believe it easy to see that AT&T fell victim to a powerful trifecta which began in 1944; the government, the judiciary and public opinion.  Personally, I believe that the government and the judiciary generally aren’t empowered to do much of anything without unwashed, uninformed and under-educated silos of public opinion.  This can be pretty damning when you are 1944 America and engage in the bureaucratization of private business as outlined by Ludwig von Mises’ book Bureaucracy.  Now I’m not saying that I agree with Mises’ writings.  My Benedictine background guides me to other definitions of economic prosperity.  But when people like Ralph Nader, Lily Tomlin and Joan Rivers start joining the “big, bad, bureaucratic, profit-making telephone company” bandwagon, well then all kinds of action is set in motion.

I titled this essay “Ma Bell is laughing at us…” for good reason.  It’s because beginning in the 1940s, she was, in the opinions of many, the characterization of corporate, monopolistic and intrinsic evils of the day, economically speaking.  It’s an opinion that would be propagated even in the face of some of the greatest innovation that the human race has ever seen.   This being the case, one may ask…  “Why are we ok with the likes of Comcast?”  They just seem to get bigger and bigger and own more and more and have more dictatorial power over what you’re gonna get and what you’re going to pay for it.


Here we are in 2014.  Technology advancement, while still moving, has cooled its jets a good bit.  Gone are the days of Harold Stephen Black and the invention of the negative feedback amplifier.  It seems these days, we’re a culture that pats itself on the back when we come up with the Snuggie, the Stadium Pal (don’t even bother), or a new flavor of Ben and Jerry’s Ice Cream.  We average, unwashed masses have said by our inaction over the last 30 or so years that we really are ok with mediocrity.  We’ve also said that were ok with paying a high price for simply “phoning it in”, no pun intended.  Comcast seems to really lead the way in this ideal.

Comcast was started in 1963 when Ralph J. Roberts, father of Comcast’s current CEO, Brian L. Roberts, purchased the Tupelo, Mississippi based American Cable Systems as a corporate spin-off from its parent, Jerrold Electronics, for US $500,000.  Ralph incorporated the company in Pennsylvania in 1969 under the name Comcast Communications.  They had an IPO of a little over $3 million in 1972.  This started their long history of buying up people to build their empire and increase profits.  Beginning in 1986, Comcast started the methodical buyouts of many companies, including:

  • Group W Cable
  • Storer Communications (50% share with TCI, now MediaCom)
  • American Cellular Network Corp
  • Metrophone
  • Maclean-Hunter Communications
  • Greater Philadelphia Cablevision
  • MGMUnited Artists
  • NBC
  • Universal Studios

They came to prominence when they would buy pieces of companies too, such as QVC, Excite Home Internet, AT&T Broadband,  At one point, they even attempted to buy Disney.  It was learned later that the only reason why they wanted Disney was because they wanted ESPN more.  ESPN has been long hailed as the most valuable and profitable asset that Disney owned at the time.

Back during the days of Ma Bell, when you had a problem with your telephone, you called them up and they sent a technician out post-haste.  There wasn’t any of this “we’ll get there between 10AM and 2 PM” stuff that we see anymore.  If there was a problem, Ma Bell responded.  One of the best examples of this was in February 1975 when a Bell System Central Office caught fire and knocked out 170,000 subscribers.  Ma Bell responded in miraculous and mission critical fashion.  Comcast, on the other hand, attempted to demand return of some of its cable equipment from a family devastated by Hurricane Sandy and attempted to hold the family liable for payment.
Comcast is absolutely the embodiment of Mises’ theory of evil bureaucratization.  They cannot deny it.  Because they have such deep pockets, government turns a blind-eye.  Because they aren’t breaking any laws, the judiciary doesn’t have cause to affect change.  Because the vast majority of consumers lack the fortitude to hold their elected officials accountable for the state of affairs of the telecommunications industry, public opinion remains mute.
AT&T for 107 years had the best telephone system in the world and changed the world in which we live, daily.  We came after them with pitch forks, torches and stones.  Comcast’s only concern is with making a profit.
By the way, it looks as if the ComcastTime-Warner merger is going to go through.  This will make Comcast the biggest telecommunications conglomerate in the world.  Yes.  The world.  You won’t have any choice for television and internet except Comcast in most places.
So there it is.  Ma Bell is laughing at all of us right now.  We killed AT&T for being what Comcast is trying to become.  And believe me.  She thinks that we deserve everything we get.


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