How the Telephone Conquered the World. Episode Seven: German Efficiency
How a public-private partnership helped create the telephone network in Germany
The history of the invention of telephony reads like a captivating detective novel, but even more intriguing are the events that contributed to the worldwide adoption of this technology. In this series of columns on IQ.HSE, Anton Basov, HSE Faculty of Computer Science editor, discusses how telephones have become an integral part of our everyday life. The seventh episode in the series recounts the story of German bureaucrats, who proved to be the most astute in Europe by ensuring effective telephony first for themselves and subsequently for all major cities in Germany. However, even there, the government's dominant role over the free market slowed down the adoption of the new technology.
Compared to Great Britain and France, the uptake of telephony in Germany did not look too bad. As previously covered, the German Postmaster General, Heinrich von Stephan, had outsmarted Bell, and the German Empire began manufacturing its own telephones as early as 1878, before the original inventor secured a patent.
Instead of establishing a telephone network for general subscribers, Heinrich von Stephan's plan was to make telephony available to bureaucrats at the postal and telegraph department. The Morse telegraph, which required extensive training to operate, was the most widely used communication system at the time. Keeping highly skilled personnel in remote villages was unfeasible, which was why the postmaster general favoured the telephone, as it did not require trained operators to maintain a direct connection between the provinces and the central government.
Thanks to German efficiency, 10,000 rural post offices had telephone service by 1890. However, this telephone was exclusively for official use and unavailable to the general public. The remaining telephone networks in Germany evolved similarly to those across Europe—without much enthusiasm.
The Berlin Telephone Exchange commenced its service for the first eight subscribers on January 12, 1881. Interestingly, its launch had initially been scheduled for April 1, 1881, but it was changed to an earlier date so that Berlin could become the first city in Germany with a telephone network. The city of Mühlhausen (now Mulhouse, France) followed closely, opening its telephone exchange on January 24, 1881. It is noteworthy that the German Post and Telegraph Office intentionally delayed the issuance of a license to Mühlhausen, ensuring that Berlin would still be the first city with a telephone network.
The development of telephony in Germany was fostered through a public-private partnership involving the postmaster general and the industrialists Rathenau and Siemens. Initially, the partnership proved effective, leading to the establishment of telephone networks in 30 cities by 1884. However, by 1902, telephone density in Germany was still only one telephone per 128 individuals, whereas in the United States, it was one telephone per 34 individuals. In German cities, the coverage was comparable to that of the United States, but in rural areas, there was less than one phone per 500 residents.
***
The story of telephony in the rest of Europe was similar. In some places, the partnership between government and business turned out to be more successful, while in others, it was less so. However, everywhere, without exception, legislative restrictions hindered the development of the telephone market.
Here is how the journalist Herbert N. Casson, author of The History of the Telephone, described this situation in 1910:
'Too much government! That has been the basic reason for failure in most countries. Before the telephone was invented, the telegraph had been made a State monopoly; and the telephone was regarded as a species of telegraph... And so, wherever a group of citizens established a telephone service, the government officials looked upon it with jealous eyes, and usually snatched it away... Under such conditions the telephone could not prosper. The wonder is that it survived.'
IQ