Southern New England Telephone Company:
The telephone has become so much a part of our daily routine it is difficult to think what life must have been like without the instantaneous communication it provides. When you pick up your telephone you have at your fingertips a world-wide communications system. Moreover, the infrastructure which has been built to facilitate voice transmissions has become the foundation for the Internet and other sophisticated computer applications. Yet, it has been only 127 years since a group of daring Connecticut telephone pioneers initiated a series of events revolutionizing communications and leading to the formation of Southern New England Telephone - a company of notable technological achievement and industry leadership.
On January 28, 1878, two years after Alexander Graham bell was awarded a patent on his primitive telephone, the world's first commercial telephone exchange opened for business in New Haven, Connecticut. George W. Coy, Herrick P. Frost and Walter Lewis, with a great deal of courage, some makeshift equipment, and $600 of borrowed money, put Mr. Bell's wonderful invention to work. Their enterprise was called the District Telephone Company of New Haven.
It was a small beginning. There were only 21 subscribers, served by eight lines - lines strung from trees, rooftops, anything available. The office itself was crudely finished. The switchboard rested on a kitchen table, a packing box served as Coy's desk and a soapbox was his chair. The only other furniture was a battered armchair reserved for visitors. The switchboard was designed and built by Coy himself, improvising with bustle wires and other materials. The furnishings of the office, including the famous switchboard, were valued in the company's books at $39.50.
Although the technology of the growing Bell system, with which District Telephone was affiliated, was tightly controlled, fierce competition sprang up. Coy and Frost, then in charge of the company, sold a controlling interest to financier Jay Gould to raise needed funds. Gould, who eventually gained control of Western Union, Bell's chief rival until that company won a patent dispute, lost interest in Connecticut telephone activities and sold his stock to local investors headed up by former Governor, diplomat and Postmaster General Marshall Jewell. Connecticut Telephone, District Telephone's successor, along with a newly created inter-state long distance service, became Southern New England Telephone in 1882 with Jewell as its first president.
When SNET started, the future looked bright indeed. It was operating 24 exchanges with a total of 3,634 subscribers. Sub-licensees, many of which would later be bought or absorbed by SNET, operated in smaller communities and generated additional toll revenue. However, two developments soon slowed the company's anticipated growth and prosperity. The first was the increasing installation of electric power cables which by 1884 began to interfere with telephone transmissions. The only solution was a costly one -- virtually doubling investment by connecting every customer to the central office by "metallic" circuits: two copper wires rather than a single iron one. It was also necessary to replace every switchboard.
The second economic blow was the commercial failure of the New York-Boston long-distance line in 1886. For technical reasons, the line lost money and the Connecticut group sold it to American Telephone & Telegraph, the new long-distance company which would later become the parent company of the Bell System. SNET made a decision to limit its operations to Connecticut and thereafter it stayed within the state except for some scattered pockets of customers served by Connecticut central offices.
The company stumbled financially but survived its initial problems and, beginning with the economic boom of the 1890's, SNET began to grow at a rapid pace. In the last decade of the century the company's telephones almost tripled from 5,489 to 15,007, spurred by reduced rates and the first major advertising campaign. Much of the outstanding debt was retired and the former dividend was resumed. Growth was faster during the early years of the new century even though the Bell patents had expired and competition was once again a factor. By 1911, the State of Connecticut had established the Public Utilities Commission and telephone service, like other utilities, became regulated.
At the close of its first fifty years, SNET had installed over 300,000 telephones statewide and could look back at a rich history including several important "firsts":
Text derived largely from: The Telephone in Connecticut from 1878 to the Present (SNET, 1969); and The First Century of the Telephone In Connecticut by Reuel A. Benson, Jr. (SNET,1978)