Chapter 1 Bell Canada: The Company
Bell expects that the public will use his instrument without the aid of trained operators. Any telegraph engineer will at once see the fallacy of this plan. The public simply cannot be trusted to handle technical communications equipment. Bell’s instrument uses nothing but the voice, which cannot be captured in concrete form … we leave it to you to judge whether any sensible man would transact his affairs by such a means of communications. In conclusion the committee feels that it must advise against any investment whatever in Bell’s scheme. — Minutes of a Western Union meeting, circa 1880
Alexander Graham Bell invented the first practical telephone in 1874. With his new invention, he transmitted speech in 1875 and received the Canadian patent in March 1876. He received the master patent for the telephone in the United States in the same year. Although many others laid claim to the invention, Canada’s thirty-seventh Parliament passed a Canadian Parliamentary Motion on June 21, 2002, affirming that Alexander Graham Bell was indeed the inventor of the telephone.
The word telephone is derived from two Greek words: tele (far-off) and phone (voice or sound). The earliest examples were no more than pairs of wooden hand telephones that operated between two locations, such as from a store to a nearby warehouse, or from a business to an executive’s residence, similar to what we know today as walkie-talkie systems. Bell Canada, formerly known as Bell Telephone Company of Canada (BTCC), was developed over 130 years ago in Ontario and Quebec to provide everything associated with telephone systems: not only the telephone apparatus, but also the physical infrastructure, including the phone lines and switching stations to facilitate phone calls. Bell Canada has always been one of Canada’s most important corporations. In 1975, the government listed it as the fifth-largest company in the country. It has played a pivotal role in changing business, social, and family life in central Canada and has always employed a large workforce, hiring many members of every community and neighbourhood. This book will explore the history and role of the telephone operator in providing telephone calling assistance to the customers of Bell Canada, in the broader context of these workers’ struggle with the company. Canadians became early adopters of the first telephones, as they did with mobile phones in the late twentieth century. The new invention helped to overcome the geographical distances of this vast country. Because the monopoly corporation had a captive market, and its financial interests were protected through federal regulation, it became a blue chip stock attractive to the middle class. From early on, the firm used the slogan “A telephone business run by Canadians for Canadians.” This new communication technology changed the culture in ways that are still emerging. In the twenty-first century, the modern version of the telephone — the mobile phone — is now used for business and personal communication on a global scale. At the same time, we are also witnessing its use as a tool of protest and for regime change in far-off dictatorships. Originally conceived of by its inventors and initial investors as a tool for business, the telephone, as with other life changing technology, has had applications developed for easier family and social communication. The large corporation that developed to support making a telephone call was nicknamed Ma Bell, because of its monopoly status, and it became known for its seemingly remote attitude toward customers and workers, and arbitrary business decisions. Monopoly status gave the company a position similar to the government in its influence in day-to-day life. The nickname “Ma” shows that Canadians in central Canada considered the company close enough to be family. Throughout the life of the company, the benefits of monopoly status, including a captive market and service rates approved by a government body, did not result in a public perception of good customer service or rates that favoured the ordinary customer.
Corporate Growth Bell Telephone Company of Canada was incorporated on April 29, 1880, by an Act of the Dominion Parliament, to develop a telephone system in Canada based on Bell’s patents. This was just four years after the telephone’s invention, a very fast timeline for any startup company to attract investors, create a corporate infrastructure, and get the national government on its side. The company’s charter from the government granted it the right, but not a monopoly, to offer services to all provinces except British Columbia (Alberta, Saskatchewan, and Newfoundland and Labrador had not yet entered confederation). The company would later focus its service delivery on heavily populated areas of the provinces of Ontario and Quebec. In 1881, one year after incorporating, the company had exchanges in forty cities and had a long-distance line from Toronto to Hamilton. By 1890, the firm was offering long-distance service over 3,670 miles. In 1880, Bell had only one hundred subscribers, but through slow but steady growth and cutthroat tactics against the competition, the number of subscribers went up to 1,500 in 1886. In the pre-monopoly period, dozens of entrepreneurs seized upon the opportunities presented by this new invention and many telephone companies were incorporated at the same time as Bell Telephone. Charles Fleetford Sise, the company’s first general manager, called the competitive environment that Bell Telephone operated in “guerrilla war.” Sise directed Bell to match the tactics of the competition and compete ruthlessly. This included giving exclusive privileges, including free installation and cheap rates, to railway stations and doctors, as well as stopping competitors through injunctions, cutting rates and even tampering with their phone lines. Bell’s incessant lobbying of provincial legislatures and municipal councils enhanced the cutthroat competitive behaviour. Monopoly status was the goal and to achieve it, Bell sales agents were not above lying or even installing telephones for free until the competition was dead. Of course, once the competition was gone, the cost of telephone service reverted back to full rates. When telephones were first in use, marketing them as an aid to family life was not part of the company’s sales efforts, as middle- and working-class families could not even afford the rates for a telephone until early in the twentieth century. To encourage the exclusive use of phones by the business class, the company kept its rates high and even tried to increase the cost of public telephone calls. Bell Telephone was a major corporate player right from the beginning, but growth did not come overnight or easily because the company was the subject of continuing government interest. Government regulation of phone service developed concurrently with the company’s growth. An 1892 amendment to the Charter of Bell Telephone Company of Canada read, “The existing rates shall not be increased without the consent of the Governor in Council.” After the turn of the century, government regulation of Bell Telephone increased. In 1902, the government amended the company’s charter to include a regulation requiring Bell to provide service to whoever applied for it, with the allowance that the instrument would not have to be placed far from a road.
The turn of the century was a time when the public was clamouring for government intervention in the delivery of what were coming to be seen as basic necessities of life, including water and electricity. These demands were due to the failure of the free market to deliver the commodities at a fair price and with adequate concern for public safety. Various organizational structures delivered these services, including monopolies run by the government, public utilities run by arm’s-length government bodies called commissions, and regulated monopoly corporations like the railways. The telephone company became the focus of ongoing public debate about public versus private control. Despite much competition by small municipal telephone companies, regulatory decisions by the Canadian Board of Railway Commissioners between 1912 and 1916 gave Bell Telephone exclusive control over the infrastructure for long distance calling and led to the gradual disappearance of most of the competition and virtual monopoly status for the company. Some small telephone companies remained operating until the 1980s. This debate emerged again in the 1970s with the new drive toward government deregulation. But in the late twentieth century only very large competitors could compete with Bell. Bell’s triumph over most of its competitors and the related public scrutiny led to a special investigation by a parliamentary committee in 1905. The committee produced two thousand pages of testimony and exhibits, but concluded the investigation without any recommendations for change. Bell Telephone put its own spin on the inquiry by claiming total vindication with the following statement: “Although the records of the Company have been searched from its organization twenty-four years ago, not a single fact has been adduced which reflects discreditably on the integrity or the justice of the management.”Despite the lack of conclusions by the parliamentary committee, in 1906 the government decided that Bell Canada should be included in the Railway Act of 1903, meaning rates would be regulated by the Canadian Board of Railway Commissioners. From then on, this arm’s-length, quasi-governmental body would decide the rates Bell could charge its customers. This changed the nature of the business. Offering telephone service had now become a social obligation and the public could have a great deal of influence over the rates charged for phone service. With the mandate of providing service to whoever requested it and a government-determined rate structure, Bell Telephone was now closer to operating as a public utility than an unrestrained private corporation that could determine the best use of its resources to meet the needs of the marketplace. After just twenty-five years, Bell Telephone was officially a regulated monopoly corporation. Bell Telephone Company was serving 237,000 subscribers by 1914. The First World War created overwhelming demand, but with shortages of supplies, the backlog for phone installations lasted well into the 1920s. However, innovation from new technology kept the company growing. For example, the company introduced the vacuum tube repeater in 1915 and enabled the development of a transcontinental network for long-distance calling. The capital costs of building a long-distance network prompted Bell to apply for a rate increase in 1918. By this time, the public understood its power vis-a-vis the company and a well-organized protest movement countered the request. No one believed that the company was going to give a 75 percent wage hike to its operators, as it suggested in its submission as a reason for the rate hike. The company’s interaction with the federal government was also mirrored at the local level, with local municipal councils having regulatory jurisdiction over the placement and rights of way of phone-line poles and wires. Local Bell management had to become involved in community and local politics to push its case for access to public space and special land uses.
It took a large workforce with staff assuming many roles and responsibilities to build a telecommunications network. Nonetheless, the first point of access was the voice at the end of the line.
At least for the public, the true voice of the networks was the operator. Across Bell’s territory, from the big cities of the Dominion down to the small towns, the operator was the “human switch through which passed the first traffic of the telephone age. Eventually, Bell operators became a mainly female force not only connecting subscribers, but also offering breaking news, the time, and the latest hockey scores; tracking down doctors and firefighters when needed; and even offering advice on how to keep the telephone in good working order. Operators soon came to occupy a unique status in the public imagination as a remarkable channel of all kinds of information and advice.
By 1909, political pressures in the western provinces, especially against large eastern corporations, led the company to sell its western assets to provincial and municipal governments. These jurisdictions set up government-run telephone companies, but the loss of these geographically dispersed markets in the West had only positive repercussions for Bell Telephone, as it allowed the company to concentrate on more profitable urban markets in Ontario and Quebec. In the 1910s, telephoning from one city to another needed an average of five operators to facilitate the connection.By the mid-1920s, the connection time for a long-distance call had gone from seven minutes to just over two and a half minutes. Installation of automatic exchanges had the greatest impact on operators, as it made customer self-service possible. The first automatic exchange opened in Toronto’s “Grover” central office in July 1924. (Early on, telephone companies named the telephone exchange or the central office for about one thousand subscribers “Grover.” The first three letters of the phone number corresponded to the first three numbers of the telephone number — so GRO represented 476. The Grover exchange building was located on Main Street just north of Kingston Road.)Underground cables, which had many times the transmission capacity of above-ground lines, also improved regular phone service a great deal. The first long distance call from Montreal to Vancouver via an all-Canadian route occurred in 1926. By the late 1920s, Bell had linked Canada to Britain via the phone system in the United States. Long-distance calls to many countries around the world became possible soon after. Toronto’s 1928 telephone directory contained 576 pages of listings. The number of Bell subscribers increased from 95,145 in 1906 to 761,456 in 1929. Toronto alone had 4,200 Bell workers in 1929, while the entire workforce of the company was 18,067 employees. All this innovation and growth provided good reason to call this period the Golden Age of Telephony. The Golden Age was not to last. The Great Depression dramatically slowed down the industry’s growth. In the first three years of the Depression, Bell lost 15 percent of its customers. In 1930, telephones were in 87 percent of all homes in Bell Telephone territory, but by 1935 the number of households with a phone had dropped to 68.2 percent. In 1932, the Bell stock dividend fell for the first time in four decades. The company was reluctant to offset the loss in revenues by cutting its workforce. Employees were highly trained and loyal to the company, so to counter the decline in revenue, Bell instituted “short timing” in 1931. This consisted of cutting employee hours and wages while keeping all of its employees on its payroll. Yet management kept the same level of spending on constructing telephone infrastructure (such as exchanges and long-distance cable) to position it for the growth that would occur when the Depression ended. Despite the doom and gloom, the seven major telephone companies in Canada even joined together to develop a coast-to-coast system of telecommunications called the TransCanada Telephone System. Canadians had little time to recover from the Great Depression before they followed Great Britain into the Second World War. The war brought new challenges to Bell Telephone Company of Canada. Out of a total population of 11.5 million, a million men and women were mobilized into the Canadian Armed Forces. The economy now suffered from a new issue: a shortage of workers. Bell faced similar labour issues, yet the Bell network, now considered a strategic national asset, had to dramatically expand its services for war purposes. Bell granted the Canadian government exclusive use of the transatlantic Montreal–London telephone cable. Simultaneously, telephone companies had to restrict their service to the general population, and Bell telephone acquired a huge backlog of seventy-two thousand phone orders by war’s end. As with other industries, the telephone companies made up the shortage of male workers with women, who took over traditionally male jobs and assumed positions on the craft side of the company. Bell Canada, imbued with a spirit of public service, supported the government’s war effort and met every expectation. At the close of the Second World War, the company was managing 1.2 million telephones and handled 127,000 toll calls per day. When the Montreal–London circuit reverted to civilian use, it handled four times as many calls as before the onset of the war. The CBC online radio archives contain a broadcast made on April 29, 1945, a few months before Victory in Europe Day. It was entitled, “Telephones Become a Necessity, Not a Luxury.” The following is a portion of the broadcast:
Couples court, businessmen deal, and firefighters help — all by telephone. Nearly all aspects of Canadian life have changed since the telephone took hold. Even before the start of the Second World War, Canadians made more phone calls per capita than citizens of any other country. Now, as the war draws to a close in 1945, CBC Radio host John Fisher predicts “the very words of victory shall be spread by telephone.” Fisher is saluting the sixty-fifth anniversary of Bell Canada, the largest of the country’s four thousand telephone companies. In 1914, he notes, the telephone had been a luxury in Canadian homes. But now there’s one phone for every five people, and Canada supplies phone equipment to many other countries. Because of its speed of communication and the way it has shaped users’ lives, the telephone is a necessity for everyday life.
The radio broadcast also notes that 1945 was the year that saw installation of the millionth telephone by Bell Canada. The end of the war ushered in a second golden age for telephony. Rapid corporate growth to meet the needs of a growing population required a corresponding increase in the workforce. Bell’s twenty-one thousand employees in 1946 grew to forty thousand in 1966. The slogan developed in the 1940s, “The Bell is a Good Place to Work!”, reflected a systematic approach to the attraction and retention of employees. The company’s need to retain its employees, in whom they invested a great deal of training time, led to workplace improvements, including the introduction of a five-day work week in September 1946. The war had also catalyzed large union-organizing campaigns in the manufacturing sector, whose workers wanted a share of the economic gains made by their employers in wartime. The labour movement developed a new model for worker-management relations through collective bargaining for large workforces. Large international unions like the United Steelworkers and United Automobile Workers (UAW) had recently organized steel and automobile plants in Canada. With a workforce of forty thousand, Bell Telephone was ripe for organizing. To prevent this from happening, Bell presented its employees with the Canadian Telephone Employees Association (CTEA) and the Traffic Employees Association (TEA), two employee associations that undermined the drive to organize into a legitimate union but presented an opportunity to engage in collective bargaining, which began in 1945 and 1946. Bell’s approach to industrial relations was to give its employees just enough to keep them happy and stymie any organizing drives. The company provided for its employees a well-rounded security program, comprising a plan for pensions and a plan for sickness, accident, and death benefits financed entirely by the company. A group of voluntary payroll deduction plans enabled employees to buy shares of the company’s stock and to meet premiums on regular life insurance and group insurance policies, government annuity contracts, and hospital medical care contracts. In the larger centres, the company maintained well-equipped, professionally staffed medical departments where employees could obtain minor treatments, medical examinations, and health advice without charge. Paternalism infused the benefit program, as the company focused on security and benefits instead of wages. In Canada, generally, women were under extreme pressure to return to the home after working in munitions plants and many other jobs. They were told to free up jobs for men returning from the war, and communities frowned on women who were in jobs that men could do. Those lucky women who remained in the workforce, like Bell operators, were under extreme pressure to conform and accept lower wages in return for the security of having a job. Other female workers had to give up basic human rights, such as the women in the Canadian civil service who had to stop working upon marriage. In this climate, most working women would fear for their jobs.
With a complacent workforce, Bell Canada was free to respond to market demands. After 1945, the company was installing a million telephones every three years or so, and had spent over $100 million to improve and expand telephone service in Ontario and Quebec by the end of 1947. In 1947 Bell introduced mobile radio telephone service to the public in Montreal and Toronto. Taking up half the space in a car trunk, sixty-five mobile telephones went into service by the end of that year. On December 23, 2007, Mike Filey wrote an article entitled “Toronto Was Experimenting With ‘Cell’ Phones 60 Years Ago” to draw attention to the fact that the cell phone was not really all that new.
The cell phone phenomenon all started 60 years ago this year with a series of experiments with the goal of establishing wireless communication using what were initially called mobile radio-telephones. And some of those tests were conducted right here in our city by the Bell Telephone Company of Canada. Their experiments went like this. First, a radio transmitting station with a range of twenty miles was set up on the top floor of the Bell building at 76 Adelaide St. W. In addition, several of the company’s green and black sedans were fitted out with low-power receiving and sending sets and were conspicuous with an eighteen-inch antenna on the roof. These vehicles would then wander the city to establish where signals between the car and the radio station worked best. It wasn’t long before it became obvious that the twenty-mile range of the main station was insufficient to cover the sprawling (even back then) city. The numerous tall buildings in the downtown core also interfered with the signals. To get around these problems “repeater stations” would have to be established at various locations across the city where special equipment would capture the signals and send them on to the Bell building on Adelaide via the regular telephone lines. Each of these locations would soon be known as a “cell”. Thus it was that over time the original term “mobile radio-telephone” was replaced by the term “cellular phone” and eventually shortened once again to the modern-day “cell phone.” Filey then went on to explain how, in those primitive days, a call on a cell phone was placed. First, the customer wishing to call the person with the cell phone had to call a special operator. The operator would then send a radio signal to the car with the phone, which would be set up with some kind of audio or visual signal to alert the driver. He would then pick up the phone’s receiver, press the “Listen” button, and he would be connected. In 1957, the company arranged the first one-way conference call for the Imperial Life Assurance Company, connecting twenty-six cities across Canada. Bell operators provided these services. The introduction of direct distance dialing eliminated the need to have operator-connected long-distance calls. First introduced in Toronto in 1958, this innovation expanded throughout the company in the following years. Continued growth created the need for more technological advancement. Bell was no longer just a telephone company; it was transforming into a telecommunications company by developing a transcontinental microwave system to support broadcasting. In early 1953, the company installed the world’s first permanent international microwave television link between two countries, delivering programs from Buffalo, New York, to the CBC in Toronto.
By 1966, an astonishing 95 percent of all households had a telephone. Because of this market saturation, the workforce was now at thirty-eight thousand; however, as was the pattern with technological change, the operator workforce had contracted, declining two thousand employees from its peak in the 1950s. This theme of technical innovation leading to workforce decline is one of the drivers behind the eventual unionization of the company. On March 7, 1968, a new Canadian law renamed Bell Telephone Company of Canada, Ltd., as Bell Canada. The name change modernized the brand and clearly differentiated the Canadian company from American phone companies. It also signified that the company was now providing more than telephone service. A number of subsidiary companies developed shortly after that, and although Bell Canada still provided service to the public with voice communications, the focus of the company switched to investing in the emerging field of telecommunications, including defense communications and data transmission. Within Ontario and Quebec, some 670 independent telephone systems operated in co-operation with Bell Canada and serviced 290,000 additional telephones. The sixties and seventies became a period of consolidation, with Bell purchasing many smaller telephone companies. In the seventies, however, the government developed a contrary vision for the company. Now the government decided to deregulate Bell Canada to position it to meet new demands, and to open the long-distance market to competition. Very high long-distance rates were subsidizing unlimited local calls, which were included in a cheap basic monthly package that all customers paid, regardless of how remote those customers were or how difficult the geography made it to serve those customers. The company was mandated to serve all equally. This situation led to the desire by the company to cut the costs of long-distance calls in order to meet the challenge of new competition who were not mandated to provide service to remote regions and pay for costly infrastructure that Bell had already built and paid for. To make up for the decline in revenue from long-distance calls, however, changes would need to be made in the company’s other operations. As was the case throughout the company’s history, change was to come and turn the work of the telephone operator upside down. Ma Bell, the formerly staid telephone company, found itself transitioning to an entrepreneurial culture and undergoing the modernization of its operations.