Still, the contrasts between these organizations and Bell Labs are crucial. “This was a company that literally dumped technology on our country,” the physics historian Michael Riordan has said of Bell Labs. “I don’t think we’ll see an organization with that kind of record ever again.” The expectation that, say, Google or Apple could behave like Bell Labs—that such companies could invest heavily in basic or applied research and then sprinkle the results freely around California—seems misplaced, if not naive. Such companies don’t exist as part of a highly regulated national public trust. They exist as part of our international capital markets. They are superb at producing a specific and limited range of technology products.
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“I’ve often said to my old friends that we were very lucky we got to work there, in an environment that I don’t think will ever exist again,” remarks Dick Frenkiel, who worked on the first generation of cellular technology. “It’s hard to say something will never happen again. But with the monopoly gone, with the whole concept of monopoly essentially discredited, how could there ever be a place like that again?”
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That perceived natural monopoly wasn’t only justified by the phone system’s technological complexity and interdependence; it was also—in an argument that telephone executives made over and over again—a matter of economics. With one company in effect serving the country’s phone customers, some parts of the phone business that were highly profitable, such as long-distance service, could subsidize other aspects that were less profitable, such as local calling. Profits from high-paying corporate customers, moreover, could subsidize service to residential customers. Profits from dense urban areas could subsidize expansion into sparse rural areas. All in all, this kind of “averaging,” as it was sometimes called, helped make telephone service available and affordable for most Americans.
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In testimony before the U.S. Senate’s Subcommittee on Antitrust and Monopoly, Bill Baker asserted that “the notion that Bell Laboratories could endure and function away from AT&T, Western Electric, and the operating integrated Bell System would be laughable were it not so sinister and so ominous.” It was an argument like the one a gifted child might make in favor of preserving his parents’ marriage.