The American Bell Telephone Company was created after Western Union surrendered their massive phone network and from that point, the use of the telephone and Bell’s monopolising behaviour, flourished.
Bell purchased Western Electric Company, Elisha Grey’s Electrical Support Company. Grey and Bell had previously been rivals, with controversy surrounding who should be credited with inventing the telephone. Grey applied for a caveat for his invention on the same day that Bell applied for his patent, but Bell beat him to it, meaning his invention was listed above Grey’s on the patent application list.
Western Electric had previously supplied phones to Western Union, but Bell’s intentions were to control his telephone empire from the top. In 1882 the company became the sole telephone supplier to Bell’s companies, he was slowly buying out all competition.
In 1891, after reaching his wits end when dealing with rude transfer staff and slow connections, Almon Srowger, an undertaker from Kansas, decided to invent the first ‘automatic’ phone. His invention was able to dial a number with push buttons. This revelation happened outside of Bell’s company and marked the start of a decline in the popularity that Bell had become accustomed to.
The patents for Bell’s inventions were to run out in 1893 and 1894, the public were no longer satisfied with the controlling company which saw the birth of ‘Independent Telephony’. Smaller companies then had the power to create their own phones and systems, focused mainly in rural areas that were of no interest to Bell. The smaller, independent companies aggressively expanded.
As 1900 approached The American Bell Telephone Company had almost been outgrown by independents, at the time Bell had 800,000 phones, the independents had 600,000. By 1903 smaller companies had over taken Bell. With the demand for a telephone service expanding throughout the US, combined with the public distrust for The American Bell Telephone Company, Bell realised something needed to be done to prevent his company from being swallowed by independents.
Bell turned to Theodore N Vail, who had twenty years previously been the General Manager of the Bell Company, to steer the company back in the right direction. Vail knew the business well, he embarked on a project called ‘Universal Service’ with the intention of bringing everyone in the US access to the telephone, once again Bell’s brainchild was expanding.
"Alexander Graham Bell invented the telephone and Theodore Vail invented the telephone business."