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The telephone dilemma

United Telephone Company subscribers handbook, 1880

The legacy of 1880 : the uneasy stand off

The events of 1879-1880 left the British telephone system in the grip of two strangleholds.

There was absolute control in the hands of the Crown - placed there by Act of Parliament and court judgement. This meant that all telephone services had to be Post Office licensed.

And there was a throatlock over the technology - established by Bell's and Edison's patents. Nobody could develop the telephone without running the risk of falling foul of the lawyers.

For more than a decade, there was an uneasy standoff between the Post Office and the telephone companies. In the end, the main loser was the public.

The national network developed more slowly in the UK than in other countries and services suffered. 

Derrick above Coleman St Exchange, c1890

Public discontent : the backlash begins

There were a number of politicians who wanted to break the monopoly of the National Telephone Company and they saw an opportunity to start the process when the telephone patents held by the NTC were due to expire. However, as the expiry date approached, the NTC manoeuvred itself into a positive position that gave it control of the trunk service.

This meant that even if the NTC were unable to control local calls any more, phone users could not call beyond their local exchanges without using the NTC network. Even so, it was clear that more had to be done to look after telephone users' interests.

The patents expired around 1891 and the legislation to nationalise the trunk lines was passed in 1892 but there was a general election immediately after that and the enactment didn't occur until 1896.

NTC canvesser's card, advertising party line service, c1900

NTC (National Telephone Company) (1881) : building the early phone network

The National Telephone Company traced its origins back to The Telephone Company, formed in 1878 to exploit Bell's telephone patents in Britain. It grew by various mergers and the creation of subsidiary companies, the name National Telephone Company first appearing in 1881.

In 1889 the company merged with the United, the Lancashire and Cheshire Telephone Companies keeping the name of the National Telephone Company. The new concern had a capital of 4,000,000 and provided 23,585 lines.

It continued to purchase smaller local operations around the country and it ended up sharing a virtual monopoly of the phone system in Britain with its main rival, the Post Office. However, when both the Bell and Edison master patents it owned expired in 1890 ands 1891, it faced a degree of competition from new operators, most of which was eventually seen off.

The company developed call offices around the country and operated a long-distance trunk network, although this was the subject of compulsory purchase by the government in 1892. The NTC trunk lines eventually transferred in 1896.

The company fought off further competition until it was taken over by the Post Office in 1912.

Telephone Cinderella - a Punch cartoon, casting the GPO and the Telegraph Service as the Ugly Sisters

The government intervenes (1892) : classic compromise

On March 22, 1892, the Postmaster-General Sir James Ferguson announced that the government would compulsorily purchase all telephone trunk lines in Britain. It was the government's best available compromise between full nationalisation - which Post Office officials opposed - and the effective monopoly built up by the National Telephone Company.

The decision meant that other new telephone companies could begin with access to a national network. There was a lot of complaint about the National Telephone Company's 'monopoly' - a word that the Victorians detested.

The irony was that if the NTC really had enjoyed a proper monopoly over telephone services, things might have developed much faster and more smoothly. As it was, the NTC faced opposition about laying cables - particularly underground - from municipal authorities, many of whom had ambitions to run their own telephone services.

NTC publicity for service in Brighton, 1903

Municipal authorities (1898) : fiasco at the town hall

By 1898, British dissatisfaction with its telephone services had the National Telephone Company cast in the role of public enemy.

The Rt Hon RW Hanbury MP, Financial Secretary to the Treasury and representative of the Postmaster-General in the House of Commons, headed a Select Committee to see what might be done. His report slammed the state of the network. It recommended that the Post Office and local authorities be allowed to compete with the NTC - with substantial public subsidy to help them do so.

The resulting 1899 Telegraph Act was supposed to inject competition back into the network - but all it did was to make it even more difficult for the NTC to provide proper services - and neither the Post Office nor the municipal authorities were equipped to fill the gap.

Glasgow Telephone Corporation booklet

New suppliers licensed (1899) : a licence to fail

The 1899 Telegraph Act gave the green light to municipal authorities to set up telephone operations, borrowing against the rates to pay for them. The results were almost uniformly disastrous.

Of the 13 authorities that took out licences, only six - Brighton, Glasgow, Hull, Portsmouth, Tunbridge Wells and Swansea - actually set up telephone services.

Tunbridge Wells sold out to the NTC and was followed by Swansea in 1907. Glasgow and Brighton were both bought by the Post Office, and Portsmouth eventually sold out in 1913. This left Hull as the only survivor.

Roof of the Glasgow exchange, c1910

What went wrong? : town halls and telephones don't mix

The municipal authorities that took out licences with such high hopes in 1900 would soon learn that there was more to providing a telephone service than laying wires and building exchanges.

Glasgow, for example, opened its system in 1901; this eventually served 12,000 subscribers across 140 square miles. But it was a system based on flat switchboards and call wires that was already out of date. Within three years the City Council was facing the need to replace the whole system with automatic calling and lamp supervision. It was more than they could afford.

In Tunbridge Wells, councillors found that the costs of operating the system were higher and the revenues were lower than they had expected. Faced with a ratepayer revolt, the council sold out to the National Telephone Company.

Publicity for National Telephone Comapny service, Hull, 1906

Kingston on Hull survives (1902) : the one that got away

They almost sold their system to the National Telephone Company, who made an offer in 1906, but a chairman's casting vote saved the Hull Corporation Telephone Department.

Six years later, with the demise of the NTC, the positions were reversed and the Post Office offered Hull the chance to buy out the NTC's local operation. The corporation voted in favour of making the municipality the sole controlling telephone authority in the city and district.

Since then, Hull has successfully negotiated five times to keep its licence - the last time in 1985, expiring in 2010.

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