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 sixth episode of the series recounts events in France when the private owner of the telephone network was compelled to sell it to the government at a knockdown price, and the impact it had on the development of communications in the country. Spoiler alert: the impact, naturally, was detrimental.
The previous episode provided a detailed account of the early history of telephony in Britain. While British telephony might have had its challenges, it looks like a miracle of efficiency compared to its French counterpart. In France, much like in England, the government monopolised the telephone business by seizing it from private entrepreneurs, but declined to invest in enhancing the network.
In 1879, the French government announced the conditions for granting licenses for commercial telephone operations. A license was only valid for five years, requiring 10% of profits to be paid to the state. Moreover, the private licensee was obligated to sell all telephone equipment to the authorities upon demand. All construction of telephone networks was overseen by government engineers.
In that same year, three companies were granted licenses to construct a telephone network in Paris, but shortly after they merged to form Société Générale des Téléphones (SGT). Its services were costly, and the connection quality was subpar. The government decided to set up and run telephone operations in small towns, leaving the networks in larger cities to SGT, but the financial allocations were very modest. In 1884, the licenses were extended for an additional five years.
In 1887, the Minister of Posts and Telegraphs, Félix Granet, proposed a bill aimed at significantly expanding the rights of private telephone operators. However, his successor in overseeing the telephone service, Pierre Tirard, opposed the move, advocating for a more prominent role of the state. By 1889, marking the centenary of the French Revolution, left-wing populists finally succeeded in nationalising the entire telephone network following the expiration of licenses. There were concerns that the continued advancement of long-distance telephony would lead to a decline in the government-operated telegraph service.
SGT disagreed with the decision and refused to voluntarily hand over the telephone network to the government. Nevertheless, the government proceeded to confiscate the business. At that time, the entire French telephone network had 8,500 subscribers, with only 2,000 of them located outside Paris. After years of litigation, the company received 11 million francs in compensation—double the amount the Ministry of Posts had initially been willing to pay, but less than what SGT had demanded.
Nationalisation, of course, did not lead to improved service. The government showed no interest in enhancing the telephone network and refused to allocate funds for its improvement. By 1900, the network was in a profound crisis. There were only 30,000 telephones in France (as a reminder, in the USA, this number had been reached by 1880). As for the connection quality, the landscape architect George Kessler noted with utter annoyance, 'One blundering girl in a telephone exchange cost me five thousand dollars on the day of the [financial] panic in 1907.'