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The Telephone Evolves
At this point telephone history becomes fragmented and hard to follow. Four different but related stories begin: (1) the further history of the telephone instrument and all its parts, (2) the history of the telephone business, (3) the history of telephone related technology and (4) the history of the telephone system. Due to limited space I can cover only some major North American events. Of these, the two most important developments were the invention of the vacuum tube and the transistor; today's telephone system could not have been built without them.
Progress came slowly after the original invention. Bell and Watson worked constantly on improving the telphone's range. They made their longest call to date on October 9, 1876. It was a distance of only two miles, but they were so overjoyed that later that night they celebrated, doing so much began dancing that their landlady threatened to throw them out. Watson later recalled "Bell . . . had a habit of celebrating by what he called a war dance and I had got so exposed at it that I could do it quite as well as he could." [Watson] The rest of 1876, though, was difficult for Bell and his backers.
Bell and Watson improved the telephone and made better models of it, but these changes weren't enough to turn the telephone from a curiosity into a needed appliance. Promoting and developing the telephone proved far harder than Hubbard, Sanders, or Bell expected. No switchboards existed yet, the telephones were indeed crude and transmission quality was poor.
Many questioned why anyone needed a telephone. And despite Bell's patent, broadly covering the entire subject of transmitting speech electrically, many companies sprang up to sell telephones and telephone service. In addition, other people filed applications for telephones and transmitters after Bell's patent was issued. Most claimed Bell's patent couldn't produce a working telephone or that they had a prior claim. Litigation loomed. Fearing financial collapse, Hubbard and Sanders offered in the fall of 1876 to sell their telephone patent rights to Western Union for $100,000. Western Union refused.
On April 27, 1877 Thomas Edison filed a patent application for an improved transmitter, a device that made the telephone practical. A major accomplishment, Edison's patent claim was declared in interference to a Notice of Invention for a transmitter filed just two weeks before by Emile Berliner. This conflict was not resolved until 1886 however, Edison decided to produce the transmitter while the matter was disputed. Production began toward the end of 1877. To compete, Bell soon incorporated in their phones an improved transmitter invented by Francis Blake.
Blake's transmitter relied on the diaphragm modifying an existing electrical current, an outside power source. This was quite different than the original invention and its improvements. Bell's first telephone transmitter used the human voice to generate a weak electro-magnetic field, which then went to a distant receiver. Bell later installed larger, better magnets into his telephones but there was a limit to what power the human voice could provide, Myer indicating about 10 microwatts.
On July 9, 1877 Sanders, Hubbard, and Bell formed the first Bell telephone company. Each assigned their rights under four basic patents to Hubbard's trusteeship. Against tough criticism, Hubbard decided to lease telephones and license franchises, instead of selling them.
This had enormous consequences. Instead of making money quickly, dollars would flow in over months, years, and decades. Products were also affected, as a lease arrangement meant telephones needed to be of rental quality, with innovations introduced only when the equipment was virtually trouble free. It proved a wise enough decision to sustain the Bell System for over a hundred years.
In September, 1877 Western Union changed its mind about telephony. They saw it would work and they wanted in, especially after a subsidiary of theirs, the Gold and Stock Telegraphy Company, ripped out their telegraphs and started using Bell telephones. Rather than buying patent rights or licenses from the Bell, Western Union decided to buy patents from others and start their own telephone company. They were not alone. At least 1,730 telephone companies organized and operated in the 17 years Bell was supposed to have a monopoly.
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