Telephone history: lessons for today

Have you ever wondered how America became a world leader in mass media and telecom? Paul Starr’s excellent The Creation of the Media addresses this question. Here is one good bit from the book:

French policy was…unfavorable to the telephone. Unwilling to spend public funds on the medium, the French government, beginning in 1879, granted local concessions for telephone service lasting only five years. The idea was to let the private sector assume the risk of a new business, giving the state time to see if it was worth taking over. Private capital could lose money on the telephone, but if the medium proved profitable the government would step in: a policy nicely designed to depress investment. In 1885, the government itself began building long-distance lines but limited construction so as not to cause too rapid a depreciation of its investment in the telegraph. Four years later, it nationalized the local telephone carriers as well, not so much because of a positive commitment to improve telephone service as because of a defensive concern about the erosion of the state’s telegraph monopoly…

By 1895, while the United States had one telephone for every 208 people…France [had] one for every 1,216…In 1927, while Bell was reporting an average delay of 1.5 minutes in placing long-distance calls, it took, on average, more than an hour to put through a call from Paris to Berlin.

The bottom line: Keep this story in mind the next time you hear politicians talking about the regulation of VOIP.