Telephone
| Author | Jeffrey Wilson |
| Pages | 1347-1350 |
Page 1347
A "telephone" is an apparatus for the transmission of human speech or other sounds over distances greater than the limits of ordinary human audibility. The business of transmitting information by telephone is quasi-public in character. The law treats telephone companies both as common carriers of information and as public utilities. As such, telephone companies are regulated by the Federal Communications Commission (FCC) at the federal level and by public utility commissions at the state level. Telephone systems may generally be owned and operated by a partnership, an individual, or a corporation.
Invented by Alexander Graham Bell in 1876, the original telephone was described as a mere improvement upon the magnetic telegraph, which sent data as fast as electrons could move along wires. Unlike telegraph companies, however, telephone companies do not receive, transmit, or deliver messages in the ordinary sense of these terms. Instead, telephone companies furnish customers with networks, facilities, and devices through which conversations can take place over long distances.
The telephone-services sector began to develop in the late nineteenth century when several patents registered by Bell began to expire, while independent local telephone companies began to proliferate in major cities. At first, telephone service in the United States was predominantly local because satisfactory technology for transmitting long-distance calls did not exist. However, American telephony witnessed an explosion in technological innovations during the early twentieth century, including the invention of a "vacuum tube," which allowed phone conversations to be transmitted over distances of several miles.
The Bell telephone companies—under the parentage of the American Telephone and Telegraph Company (AT&T)—patented and deployed this technology across state lines. But they typically refused to allow independent telephone companies to interconnect with their long-distance service. As a result of this handicap and the intense price competition with the Bell companies, many independent telephone service providers chose to sell their companies to AT&T. By the advent of the 1930s, AT&T controlled approximately 80% of local exchange lines in the United States. These practices placed AT&T in the cross hairs of antitrust authorities, who convinced Congress of the need for regulation in this area.
Page 1348
After conducting a series of hearings on AT&T's growing dominance over American telephoning, Congress determined that AT&T and its competitors were public service corporations whose facilities and instruments were devoted to public use, which made them subject to two kinds of legislative control, state and federal. States may regulate the transmission of telephone communications wholly within state boundaries, Congress said, so long as such intrastate communications do not substantially affect interstate commerce. Once a telephone communication crosses state boundaries or substantially affects commerce in more than one state, Congress observed, the Commerce Clause of the U.S. Constitution gives only federal authorities the power to regulate such interstate communications. U.S.C.A.Const.Art. I, section 8, clause 3. Congress formalized these findings in the Communications Act of 1934.
The Communications Act of 1934 establishes a dual system of state and federal regulation...
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