Rise and fall of the landline: 143 years of telephones becoming more accessible – and smart

The global economy has changed dramatically over the past century and a half.

When I lecture my Boston University business students on this topic, I use one of the world’s most transformative inventions to illustrate my point: the telephone.

Before the telephone was invented, it was impossible to communicate by voice across any kind of distance. The landline in 1876, along with the telegraph a few decades earlier, revolutionized communications, leading leap by leap to the powerful computers tucked snugly in our pockets and purses today. And in the process, living standards exploded, with inflation-adjusted GDP surging from US$1,200 per person in 1870 to more than $10,000 today.

What follows are a few facts I like to share with my students, as well as several others that you might not be aware of about how the phone has reshaped our lives – and continues to do so.

‘Watson – I want to see you!’

One of the reasons I use the telephone in my lectures is because inventor Alexander Graham Bell actually created his phone and made the first call while a professor at Boston University, where I teach economics.

Alexander Graham Bell opened the first long-distance line from New York to Chicago in 1892. Gilbert H. Grosvenor Collection/Library of Congress., CC BY
The first telephone call happened on March 10, 1876, a few days after the Scottish-born inventor received a patent for the device. After he accidentally spilled battery acid on himself, Bell called for his assistant with the famous phrase “Mr. Watson, come here – I want to see you!”

But that’s not the end of the story. Controversy continues over who actually invented the phone first. While Bell won the series of court battles over the first patent, some historians still give credit to Elisha Gray or Antonio Meucci, both of whom had been working on similar devices.

In fact, in 2002, the U.S. Congress acknowledged Meucci’s role in the invention of the telephone – though it didn’t give him sole credit.

Number of connected telephones

Phones started out as novelty items shown just to kings and queens.

Today, they are something almost everyone carries with them, even the homeless.

In 1914, at the start of World War I, there were 10 people for every working telephone in the U.S. By the end of World War II in 1945, there were five people for every working phone.

The technology passed a key milestone in 1998, when there was one phone for every man, woman and child in the U.S.

As of 2017, there were 455 million telephone numbers for the United States’ 325 million residents, or 1.4 per person. About three-quarters of those numbers were tied to mobile phones, a little over 10 percent were for old-fashioned landlines, and the rest were for internet-enabled phones.

This Trimline phone came out in December 1986. Wikimedia Commons, CC BY

People used to rent their phones

It may sound odd today, but until the early 1980s many consumers had to rent their phones from AT&T.

Until then, the company had a monopoly over most of the U.S. phone system. And in many states, AT&T would only rent phones to customers. In the early 1980s, the rental fee was $1.50 to about $5 per month depending on the type of phone.