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Competence and improved economics

The telegraph “provided the crucial and cumulative break of the identity of communications and transportation,” wrote James Carey. It became “a model of and a mechanism for the control of the physical association of things, specifically for the railroad. . . . [It] . . . brought a decline in arbitrage, [that is,] the buying cheap and selling dear by moving goods around in space . . . [and it affected] the practical awareness of time through the erection of standard time zones. ” James Carey, 1991, pp. 133-137. The development of the telephone precipitated the second electronic communications revolution in the late nineteenth century.

Because it was a two-way...

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... medium and as it carried voice, the telephone initiated a more publicly and economically considerable communication revolution than the telegraph. The telephone is a wonder of technical and engineering design and operation, and it became the first true worldwide, instant, global, and personal, information, and communications medium. These days, the telephone system interconnects hundreds of millions of people around the world and provides them with the means to communicate instantaneously by voice, written message, computer, and facsimile whether they are at home, in the office, or in a car, a truck, or an airplane.

The telephone became one of the most significant social and economic technologies in history by providing a medium for exchanging personal and business information, coordinating social, economic, and political activities, facilitating decision making, and merely keeping in touch. And, it does this with little or no human involvement. Developments in radio communications ushered in the age of commercial public broadcasting after the First World War. For nine months commencing on February 23, 1920, Marconi broadcast a regular news service from his transmitter at Chelmsford in England.

These developments are significant in retrospect because they are not unlike the wave of mergers and acquisition and strategic alliances that leading manufacturers, network operators, and suppliers of software, content and services are implementing today in an all-out effort to create and dominate the electronic superhighways of the future. The postwar period witnessed the spread of telephone networks into the rural and remote regions of industrialized countries and the linking of all of them into a nationalized telecommunications infrastructure.

At the same time, this infrastructure was ongoing to undergo transformations as a consequence of major innovations in switching and transmission systems, many of which were developed by the Bell System. One of the biggest technological breakthroughs was the prologue of automatic, electromechanical switching. As it was automatic, it was faster and more efficient than manual switching, and it transformed the telephone business from an extremely labor-intensive to a highly capital-intensive one. One of the consequences was drastic cuts of telephone operators.

Electromechanical switching progressively gave way to fully electronic switching in the sixties and seventies, and these ultimately to the computerized switching systems of today with their highly automated, software features that give them the capability to process voice, data, and image communications; to route traffic optimally throughout the network; and to monitor, detect, diagnose and repair problems as they arise. Both local and long-distance communications were further transformed as a result of innovations in multiplexing and microwave radio and coaxial cable transmission systems.

Both developments increased transmission competence and improved economics by orders of magnitude, resulting in major reductions in the price of long-distance telephone service and stimulating a consequent increase in the demand for service. Multiplexing, invented by Bell Telephone Laboratories in 1927, was a way of modulating higher frequency transmission signals with lower frequency voice signals so that copper, for example, could carry several voice conversations concurrently. This meant a reduction in the use of copper and in the cost of local and long-distance services.

The former transatlantic radio-telephone link was installed by AT&T between the United States and England in 1929, and radio-telephone links were also recognized between North and South America. In 1933, European engineers began using microwave communications to transmit telephone signals across the English Channel, a distance of a dozen miles. But radio-telephone communications were not very reliable, and the quality of the signal was often poor for very long-distance transatlantic or transoceanic communications.

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