Carterfone to Smartphone

"Here lies a stubborn Texan” is purportedly to be inscribed on Thomas H. Carter’s gravestone.  

Stubborn Texan!  Who is Tom Carter? Those of us who have used radiotelephones and radio pagers, then cellular telephone, and now smartphones are very thankful to Tom for allowing this to happen.

 

Tom Carter

But the road there was not paved!

Tom was just a radio guy, just like most of us in the land-mobile radio industry.  He loved this industry just as we do.  Tom owned a radio shop when land mobile radio was king. This was big business as police and fire departments, and all types of companies were using radio to communicate with their field staff – way before cellular radio or specialized mobile services like NEXTEL.

Tom’s radio shop was in Dallas, TX, called the Carter Electronics Corporation, starting business around 1946 when radio communications – wireless - began its skyward growth.  He also provided intercoms and other communications systems.  By 1959, his company was selling, installing and servicing 2-way radios systems in Texas and to a lesser extent in Oklahoma.

Tom owned a cattle ranch, and had been thinking about a solution to what he thought was a problem; that is, while on his horse riding fences around the ranch, or out working with his cattle, how can one make or receive telephone calls?   The phone was at the office or at the house.  Today, we just pull our cellphone out of the pocket to answer calls; actually, we may even check the Internet for something we’re thinking about or need to check on.  In the 1950s this was science fiction.

Early Carterfone

Tom was a true radio technician who was a problem solver.  In 1959 he found a solution to make calls while riding his horse, a device that patched the telephone network with two-way radio calls.  He called it the “Carterfone”.

The Carterfone worked this way:  when someone with a two-way radio in their vehicle, or a portable transceiver that wanted to talk to someone that had a telephone; the radio user would call his base station attendant at of the radio control point [FCC rules required that someone needed to monitor transmit audio and transmitter control], and tell them to set a patch to the called party.  The station attendant would then dial the phone number. When the recipient answered; they were informed that the call was a radio call.  The radio attendant then place the telephone handset onto the audio coupler cradle that was tied to the radio system. This “patch” allowed the radio caller and the telephone user to communicate directly.  The audio coupler was part of the Carterfone device, which used VOX [voice operated switch] that would automatically switched to the radio transmitter when the telephone user was talking.  When the telephone user stopped talking, the radio switched back to the receive mode.  The station attendant had a speaker to monitor the conversation and could adjust the audio with the volume control. Once the call was finished, the radio attendant would remove the telephone handset from the coupler, and then hang up to end the call when the conversation was completed.

This was a groundbreaking idea in the day. Now one could roam the ranch with their radio and make calls when needed.  Other ranchers, but especially oil-drilling companies were very interested in this system.  This included ambulance to hospital calls to easily communicate. No more telephone to telephone or radio to radio calls; the patch integrated the two systems.

Carter was the first to it!  Soon, he found that he was able to sell Carterfones just as fast as he could make them.  Life was good for all!

 

Carterfone

But hold on – You cant do that!  It’s not legal!

Well, at least that’s what AT&T thought. 

AT&T at the time had total control of their network, from any telephone handset to any other telephone handset and everything in between.  There was the local telephone operating company [e.g. N. E. Telephone], then there was AT&T Long Lines for long distance calling; Western Electric manufactured all of the telephone equipment, and all R&D was at Bell Labs.  Unmitigated monopoly!

The TV show “Laugh In” had a skit with Ernestine the telephone operator. She had AT&T labeled correctly:  “We don't care, we don't have to, we’re the telephone company”!

So AT&T began to harass Tom Carter’s customers, threatening them that if they did not stop using the Carterfone unit, AT&T would cease providing them telephone service.

The basis of their threats was based on FCC approved AT&T tariffs that stated:   “No equipment, apparatus, circuit or device not furnished by the telephone company shall be attached to or connected with the facilities furnished by the telephone company, whether physically, by induction or otherwise”.  The basis for this that they wanted to protect their system from devices connected to their network that could potentially harm equipment.  Therefore, any device connected to the telephone system had to be provided by AT&T.

Tom’s radiotelephone interface was acoustical; that is, audio sound was transmitted into the mouthpiece of a telephone handset without an electrical connection.  The Carterfone’s cradle acoustically coupled both sides of the conversation via the telephone handset, which had a mouthpiece and an earpiece.  The device did not electrically interface with AT&T equipment – all Carter was doing to the AT&T system was sending sound waves to a handset mouthpiece just like any human would do.

The stubborn Texas cowboy believed that he was not harming anyone or anything, and that no one had any right to tell him that he couldn’t be in the Carterfone business.

Then, around 1966, and with AT&T threatening to discontinue service to Carter’s customers, Carter decided to file a private antitrust suit against AT&T.  However, the courts referred the issue to the FCC.

AT&T, a powerful US firm always had behind them with many politicians and bureaucrats in alignment.  This inflicted AT&T lawyers with various levels of haughtiness and arrogance.  These men were very smart and as they worked for a very important company.

And here comes this unsophisticated Texan, with his inexperienced Texas lawyers. AT&T lawyers saw this cadre as a bunch of amateurs to be thrown aside.  They were so confident and so amused by it all that they often laughed openly among themselves.

Long story short - the joke was ultimately on them. It was AT&T’s management and their attorneys who faltered in their performance of the case, due to over confidence.  The FCC would not be there for them this time around.

One of the AT&T star witness testified that a person could speak into a telephone receiver held at arm's length, or shout from across the room to the handset – this was legal use.  However, the use of megaphone [or other device] to project the voice over to the phone handset was illegal. Any intervening equipment to send voice onto their system would damage the network; thus not legal per the tariff.

FCC attorneys asked AT&T for details on how the system would be damaged.  How does an acoustic device damage equipment, as there is no electrical connection, just sound waves.

AT&T could not produce any proof or evidence. The ten or so AT&T attorneys in the courtroom just looked around at each other unable to respond. Here we were, several elite attorneys, a decade in court and no response – the FCC was upset.

The FCC was also troubled by the fact that telephone users could install AT&T manufactured equipment that had the same exact functionality that the Carterfone offered – but one would damage the system but the other would not, it didn't make sense!  No more could AT&T claim harm to the network; they would now have to demonstrate specific harm going forward.

One again, AT&T may have thought the FCC was on their side.  Not this time.  The FCC got burned by AT&T the earlier Hush-A-Phone case [1955].  This was another unreasonable court case that AT&T objected to a device “connected” to their system.

Hash-A-Phone

The "Hush-A-Phone," was a small rectangular plastic baffle placed over the mouthpiece of a candlestick telephone. There was a cavity big enough to place your mouth into. When you talked, the party on the other end could hear you clearly as the plastic device filtered office or room noise.  Carter also invented was the Hush-A-Phone.

Incredibility, it took the FCC more than six years to decide this case. And the decision was in AT&T favor!  An appeals court easily reversed the decision.  The court said that “..a telephone subscriber may produce the result in question by cupping his hand and speaking into it, but may not do so by using a device which leaves his hand free to write or do whatever else he wishes, is neither just nor reasonable..”  The Hush-a-Phone decision was in 1955. This set up the stage for the Carterfone decision.

In the Carterfone decision, the FCC opened AT&T’s market to others for the first time. Equipment not provided by AT&T could interface with their network if certain rules were followed [FCC Part-68].

This ruling was major as it opened up the telephone network to others, like fax machines, answering machines, and ultimately modems for Internet access.  AT&T wanted to be the exclusive provider of this equipment.

Carter, the stubborn Texas cowboy, was willing to fight but did not fully recognize that AT&T was willing to drag this fight to the end.  His business fell apart and had to sell it.  He even sold his cattle ranch and home to pay legal fees fighting AT&T.  Carter got much moral support but no one helped financially.

Carter did settle the case in 1968 for $500,000 and the right to access the AT&T network.  The amount received barely covered his expenses. 

After 10-years in court, Carter was beat mentally and physically. He claimed he had ulcers and nerves, having to take medication.  Tom died in 1991 of lung disease.

AT&T was now on the defense, and in the not too distant future, a battle with microwave radio and long distance was brewing, setting the stage for the next level in the fight to break the AT&T’s monopoly.

Tom Carter, both with his Hush-a-Phone device and especially the Carterfone, was the first to pry open the strong control that AT&T had on their network, only allowing equipment they produced.  Now it was open for other to provide services not readily available by the giant AT&T.

AT&T has over 100 years of traditional telephone service, with the past 50 years or so adding data technology. They are now upgrading their network to be an all IP based telephone company.  In the end, the break up opened up applications and services for the consumer with AT&T still a strong company that was able to evolve keeping up with the advancement of technology and especially services.