AT&T

Type:	Public
Industry:	Telecommunications
Founded:	1876
Founder(s):	Alexander Graham Bell
Headquarters:	Whiteacre Tower Dallas, Texas
Country:	USA
Employees:	258,870 Employees as of July 2011
Revenue:	$ 113,239.0 billion as of 2010
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, Senior Executive VP and General Counsel James W. Cicconi, Senior Executive VP of External and 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, 14th largest in market value, and was ranked by Fortune Magazine as one of the 50 most admired companies. The company's headquarter is located in Dallas, Texas.

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. 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.” 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.

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. Bell Telephone Company acquired its first license to operate a telephone exchange in New Haven, Connecticut in 1878. 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. In 1880, Bell Telephone Company was incorporated in Massachusetts as American Bell Telephone Company. In 1882, American Bell Telephone Company purchased majority shares of the Western Electric Company, which became its primary supplier for telephone equipment.

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. 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. 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. 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.

The Bell System: The Largest Telecommunications Monopoly

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.

Foundations & Guiding Principle of the Bell System

The two patents issued to Alexander Graham Bell for his improvement to telegraphy became the technological foundation in the development of the telephone while the Bell Patent Association served as the organization foundation of the Bell System.

The founders and the entire management of the Bell System operated on the principle that research and development is a better approach to achieve better communications leading to the success of the company.

Theodore Vail: The Leader Behind the Bell System

Theodore Vail instituted the Bell System. He was hired by Gardiner Hubbard to become the General Manager of the Bell Telephone Company in 1878. During that time the company is experiencing difficulties to raise capital because most politicians and financiers believe that the telephone is not a profitable business. Despite the negative impression regarding the telephone business and discouragements from family and friends, Vail accepted the job giving up his position as General Superintendent of the Railway Mail Service. He initiated management and organizational strategies which resulted to the company's remarkable growth such as the issuance of formal contracts and systematic accounting control over licensees and delegated travelling agents to monitor the licensing business. Vail also succeeded in negotiating an out of court settlement in connection with the company's patent infringement case against Western Union in 1879. Western Union recognized Alexander Graham Bell as the inventor of the telephone and 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. All entities who have interests in the telephone business will be licensed under the Bell patents. Furthermore, Western Union also agreed to pay 20% of the total costs of every new developed telephone patents. In return Bell Telephone Company agreed that it will not engage in the telegraph business and Western Union will be given a license to use the telephone to transmit telegraphic message and it will be given a 20% of the Bell telephone rentals and royalties. The settlement agreement gave Bell Telephone Company the full control over the telephone technology and monopoly over the telecommunications industry. It also gave the company the leverage to develop a well-founded national system--the Bell System.

Vail also initiated the establishment of the long distance telephone service, the use of copper wire in telephone and telegraph lines, and created the company standard for service and technological development. policy. In 1887, Vail resigned as General Manager of the AT&T because of conflict in management style with his superiors. He didn't want to compromise his management principle. He believed that the company needs to expand its service to attain growth but his superiors believe otherwise, for them dividend is more important.

AT&T continued to grow but the company incurred a large financial debt. In 1907, JP Morgan gain control of the AT&T debt financing and decided to convinced 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 acknowledge that the Bell System is natural monopoly cooperating with state regulation. He instituted standard operating procedures within the company and regained the national control in telephone service. Vail retired in 1919 and during that period AT&T's structure and operation was already well established and modernized.

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. The new AT&T president Walter Gifford gave up the company's manufacturing business including its international locations except Canada and pursued the company's objective to provide a universal telephone service in the United States beginning in 1925. 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 can only accommodate one call at a time. The company's TAT-1, the first trans-atlantic telephone cable was launched in 1956. It has the capacity to accommodate 12 calls at a time and price was set at $12 for the first three minutes and subsequently 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, the international long distance call customer dialing was introduced to the public, AT&T's network became computerized and had the initial capacity to handle a high volume of calls to as much as 350,000 per hour.Since then, AT&T continued to expand its telecommunications service globally.

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 and lobbied the Congress to conduct hearings and amend the 1934 Communications Act which created the Federal Communications Commission (FCC), an independent regulatory body which conducted a full scale investigation of the telephone industry. The agency also implemented regulations to increase competition. In 1979, Charles L. Brown then Chairman of AT&T admitted that the company is prosperous in terms of revenue and and it has developed new technologies, but the company is facing difficulties in pursuing its business operations and implementing its new technologies because of the legal battles and regulations particularly the U.S. antitrust lawsuit. In 1982, Brown initiated a settlement agreement with the Department of Justice through U.S. Attorney General William Baxter. 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 limited the business operations of AT&T to common-carrier communications service, to license its inventions to all interested parties and its manufacturing subsidiary, the Western Electric will only manufacture equipment for the use of Bell operating companies. The Divestiture which took effect on January 1, 1984 dissolved the Bell System. 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 re-organized AT&T was born after the divestiture. The company retains 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 remains financially stable. In 1984, AT&T serves an average of 37.5 million calls per day and by 1999 it increased up to 270 million calls.In 1991, AT&T acquired NCR Corporation, computer manufacturer for $7.3 billion and subsequently purchased Mc Caw Cellular in 1994 for $11.5 million. The company was renamed AT&T Wireless. AT&T Network Systems, the company's manufacturing emerged as a strong competitor and succeeded in positioning AT&T back to global business by establishing join ventures and factories in other countries such as China, Japan and Netherlands.

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

AT&T transformed its business operations from being a long distance service provider to an integrated voice and data communications company after President Bill Clinton signed Telecommunications Act of 1996. The new law open the doors for competition among companies providing both local and long distance communications. In 1999, AT&T again entered the local market by offering "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 re-organized into three separate publicly held companies: AT&T Wireless, AT&T Broadband and AT&T.

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 is geared to become globally competitive in the 21st century.

Today AT&T is considered as the fastest mobile broadband network provider and wireless carrier in the United States with the largest international coverage. AT&T is also provides the AT&T U-verse TV and the AT&T Direct TV. 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.It's wired services(broadband,local and long distance calls) are concentrated within the 22 American states.

Awards

AT&T received numerous recognition 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 EarnsCorporate 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)

AT&T & ICANN

In 1998, AT&T was one of companies that supported 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, the WIPO Final Report, 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. 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.

In 2009, AT& 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 to 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 has a direct interest in the predictability, resiliency, security and stability of the DNS. In addition, AT&T emphasized that ICANN needs a meaningful accountability and opined that the internet governing body has not yet matured as a trustworthy steward of the internet identifiers based on the White Paper. AT&T explained that ICANN refused to take significant steps to become fully accountable to the internet community however its the internet governing body's stake holder groups are 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.

World Intellectual Property Organization