The Sale That Never Had to Happen
It built almost every telephone in the country and had exactly one buyer for them. A court order ended that arrangement in 1984.
The Heaviest Thing in the Front Hall
The telephone sat on a small table in the hall, and it stayed there.
It was heavy in a way household objects no longer are. The handset had real weight in the hand, and the coiled cord pulled back if you walked too far with it.
You dialed by putting a finger in a hole and pulling the ring around to the metal stop. Then you let go and waited while it clicked its way home before the next number.
It rang with an actual bell struck by a small hammer, loud enough to hear from the yard.
When it broke, a man in a company truck came out and fixed it, and there was no charge for the visit.
Nobody in the house had ever bought it.
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Nobody in the House Owned It
The name on the underside of the phone was Western Electric.
It began in Cleveland in 1869 as a small partnership making telegraph equipment. By 1882 it held an exclusive agreement to build what the Bell telephone system used, and from then until 1984 it was the only supplier that system had.
Here is the part almost nobody noticed while dialing. The telephone was not a purchase. It was a rental, billed at roughly $1.50 to $4.60 a month depending on the model, for as long as the instrument stayed in the house.
The equipment never left the company's books, and that was the entire design. A customer who wanted a telephone the local company did not offer had to buy it, hand it over to be rewired, pay a service charge for the work, and then pay a monthly lease on his own property.
Durability Was Cheaper Than a Sale
The arithmetic runs backward when the maker keeps the object.
A company that sells a telephone would like it replaced. A company that rents one wants it to last twenty years and never require a truck.
So the standard set introduced in 1950, designed by Henry Dreyfuss, was built to survive decades of daily handling. About 183,000 went out in the first production year, and it stayed in production until 1984. Old sets came back, were rebuilt, and went out again to another house.
The factory behind all this needed no sales force. Its customers were the regional telephone companies owned by the same parent, their equipment purchases went into rates that regulators approved, and those costs came back through the monthly bills of everyone on the line.
At the plant in Cicero, Illinois, nearly five million square feet under one roof, more than 48,000 people worked through the Second World War.
The Requirement Went Away
The advantage was never manufacturing skill. It was a rule.
Federal regulators began dismantling that rule in 1968, when they held that a customer could attach equipment of his own to the network. The company answered by requiring protective devices and charging for them, but the principle was settled, and inexpensive imported telephones started appearing in ordinary stores.
The Justice Department sued in 1974, and the case settled in January 1982. The settlement separated the regional telephone companies from their parent, and those companies were then free to buy switches and handsets from anyone selling them, including European firms that had never been allowed near the American market.
A century of guaranteed orders ended in a paragraph of a consent decree.
The Charter Changed Hands
On January 1, 1984, the corporate charter passed to a newly formed company carrying the parent's own name, and the manufacturing business went on under it.
The decline shows best at Cicero. That plant held 23,364 workers in 1970 and about 4,200 by 1983.
Households were offered the chance to buy the telephones they had been renting, and most of them did. The manufacturing arm was renamed Lucent Technologies in 1995 and spun off, merged with a French competitor in 2006, and was absorbed by a Finnish one in 2016.
What Stayed on the Bill
The company is gone. The arrangement outlived it.
The modem in the corner belongs to the cable company, and the phone in a pocket is usually twenty-four monthly payments that stop the software when they stop.
A sale ends a relationship. A rental is one.
Nobody rents a telephone anymore.
Almost everybody rents something.
