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Universal service
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==Interconnection between telephone exchanges (1907-1960s)== ===Bell system=== [[file:Bell System advertisement in Western Electric v1no1 News March 1912 promoting universal service.jpg|thumb|1912 Bell System advertisement promoting its slogan for universal service]] In the early [[history of the telephone]] up until the early 20th century, telephone service was fragmented. The ability to make a telephone call depended on not just on both parties having telephones, but that their telephone companies used the same standards and that there was a physical interconnect of their networks. The term "universal service" originated with [[Theodore Newton Vail]], president of [[American Telephone & Telegraph]] (the original AT&T) and head of the [[Bell System]], in 1907 with the corporate [[slogan]] "One Policy, One System, Universal Service".<ref name="cato"> {{cite web | url=http://www.cato.org/pubs/journal/cjv14n2-6.html | publisher=[[Cato Institute]] | title=Unnatural Monopoly: Critical Moments |access-date=2009-06-14}}</ref><ref name="att milestones">{{cite web | url=http://www.corp.att.com/history/milestones.html | publisher=[[AT&T Inc.]] | title=AT&T Milestones in AT&T History |access-date=2009-06-14}}</ref><ref name="ct">{{cite web | url=http://www.cybertelecom.org/usf/ | publisher=Cybertelecom | title=Cybertelecom :: Universal Service | access-date=2010-09-15}}</ref> It was intended as a contrast to the "dual service" that had become common since the original Bell telephone patents expired in 1894, where [[independent telephone companies]] operated not only in non-Bell System markets, but also as a competitor in Bell markets.<ref>[http://www.cybertelecom.org/notes/att.htm#1894 Cybertelecom :: AT&T History]</ref> These independent phone companies did not interconnect to the Bell System; though modern commentators<ref name="cato" /> suggest Bell refused to do so as an excuse for monopolization, it was argued then that phone systems of that day could not interconnect unless all phone companies used the same technology, as the Bell System did. This required many businesses to maintain phones with both companies, or else risk losing customers who subscribed to the other phone company. Vail argued that an interconnected phone system (the Bell System), operated by one company (AT&T) and with rates regulated by the government, would be superior to the dual system and would produce great social benefits, much like Hill's postal reforms. Eventually, Vail prevailed in his views, first through state laws and ultimately through the [[Kingsbury Commitment]] of 1913, where AT&T agreed to several measures, including interconnection with non-competing independent phone companies, to avoid [[antitrust]] action, thus formalizing the Bell System monopoly. Meanwhile, the [[Mann-Elkins Act]] of 1910 made AT&T subject to regulation by the [[Interstate Commerce Commission]].{{citation needed|date=March 2016}} By 1913, [[AT&T Corporation|AT&T]] had favored status from U.S. government, allowing it to operate in a noncompetitive economic environment in exchange for subjection to price and quality service regulation. The government asserted that a monopolistic telephone industry would best serve the goal of creating a "universal" network with compatible technology country-wide for telephone consumers. Regulators emphasized limits on profits, enforcing "reasonable" prices for service, setting levels of depreciation and investment for new technology and equipment, dependability and "universality" of service. "Universal" was originally used by AT&T to mean, "interconnection to other networks, not service to all customers". After years of regulation, the term came to include infrastructural development of telephony and service to everyone at a reasonable price.<ref name="Aufderheide, P. 1999">{{cite book | last=Aufderheide | first=Patricia | title=Communications Policy and the Public Interest | publisher=Guilford Press | publication-place=New York | date=1999-01-15 | isbn=978-1-57230-425-3 | page=}}</ref> === Willis Graham Act of 1921 === The [[Willis Graham Act]] of 1921 was called into action in order to resolve pressing issues in the debate about the merits of interconnectivity of telecommunication. The act marks the first piece of legislation in the history of telecommunication to tackle the increasingly difficult challenges of the telecommunication industry in the 20th century. Before the Graham act was passed the commonly expressed opinion was, such as by the Senate Commerce Committee, that telephone service fit the definition of a natural monopoly. The central practical problem, according to the committee, with the Willis Graham Act was competing telecommunication services serving one individual market. The act was in favor of a monopoly, which aimed to exempt competing telephone companies from the antitrust laws and allow them to unify the service by merging competing telecommunication service providers. The main principle behind the act was that there should be only one system in each community through which all users communicate. The focus was exclusively on local service rather than long-distance service, as no independent long-distance lines were able to compete with AT&T. ===Communications Act of 1934=== {{main|Communications Act of 1934}} Universal service in telecommunications was eventually established as U.S. national policy by the preamble of the [[Communications Act of 1934]], whose preamble declared its purpose as “to make available, so far as possible, to all the people of the United States, a rapid, efficient, Nationwide, and world-wide wire and radio communication service with adequate facilities at reasonable charges”.<ref>{{USPL|73|416}}</ref><ref>{{UnitedStatesCode|47|151}}</ref> The chief purpose of this law was to combine the [[Federal Radio Commission]] with the ICC's wire communications powers, including regulation of AT&T, into a new [[Federal Communications Commission]] with greater powers over both radio and wire communications. The language of the 1934 Communications Act was later re-interpreted to mean a commitment for telephone companies to provide service to all people, but historically this language was aimed at the more limited goal of unifying the United States' fragmentary telephone exchanges into a single universal system.<ref>{{cite journal | last=Mueller | first=Milton | title=Universal service and the telecommunications act: myth made law | journal=Communications of the ACM | volume=40 | issue=3 | date=1997 | issn=0001-0782 | doi=10.1145/245108.245119 | pages=39–47|archive-url=https://web.archive.org/web/20171111094633/http://spears.okstate.edu/home/graycg/tcom5173/Documents/Mueller-UniversalService.pdf|archive-date=2017-11-11|url-status=dead|url=http://spears.okstate.edu/home/graycg/tcom5173/Documents/Mueller-UniversalService.pdf}}</ref> To comply with the act, AT&T began increasing the price of long-distance service to pay for universal service. The act also established the FCC to oversee all non-governmental broadcasting, interstate communications, as well as international communication which originate or terminate in the United States.
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