Startup Story: The Amazing Invention of the Cellphone

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Do you remember the 1970’s? Well, if you do you’ll remember the bell bottoms and Saturday Night Fever and and the war in Vietnam and Donna Summer. What was really interesting was the state of telecommunications back then. Now it was long before deregulation. It was highly regulated industry.

AT&T was not one of many possible carriers, it was your long distance carrier, it was in fact the only long distance carrier.

If you were on the road and had to make a phone call, well, you needed a dime and a payphone. How different was the world back then? If you turned your AM radio to the far end of the band back then you would probably pick up some police dispatch calls, there was such a shortage of allotted frequencies at that end of the dial that the very far end was allotted for police use.

Now, their was a much needed telecommunications revolution on the horizon and we’re going to find out how it happened. It all began with an engineer from Motorola.

For some time Motorola had been the in the business of wireless two-way communication devices. Back then the technology consisted mostly of walkie-talkies and emergency paging systems. Now the problem for Motorola, among other companies, was that their was not enough bandwidth, as I was just mentioning, to do everything that the engineers could imagine they would do.

So, to expand the service more room was needed on the radio/television spectrum. It was not that there were no wavelengths available, but it was in fact true that the FCC wouldn’t let any more be available. Now a lot of companies, including Motorola, petitioned the FCC to open the lower end of the VHF band so that they could start using it to transmit other things. But, in the first of several bureaucratic hurdles that Motorola had to overcome, the FCC denied their request, stating that when it did open up the frequencies it would only be on the high end of the spectrum.

All of Chicago had only 2,500 mobile phone numbers available and most were used by doctors and emergency vehicles.

Now it is important to understand the difference at the time between a mobile phone and a portable phone. Mobile phones were used in cars, portable phones, or later what would be called cell phones, were not even in existence. The only transportable telephone or telephone system that was available in the late 1960’s was a crude automobile mobile phone system and its use was really limited. All of Chicago, for example, had only 2,500 mobile phone numbers available and most were used by doctors and emergency vehicles.

So at the time people shared mobile phone numbers. The phones actually used tubes like an old radio and the small range of the phones was so limited that it really only could go a couple of miles. Yet, according to John F. Mitchell, the Motorola engineer who hit up the companies cell phone development team, there was, as they saw it, pent up demand.

Mitchell and his colleagues at Motorola knew that an actual portable cell phone was the answer. By tapping into the higher end of the VH spectrum, eventually it was going to be opened by the FCC, Motorola figured that they could create this new cell phone system, not as a revolutionary innovation but rather as a national extension of their previous wireless communication work. The engineers at Motorola saw what few engineers at the time did, that by tapping this 1,900 megahertz frequency line, to be geeky about it, and installing cell towers throughout an area, a useable cell phone network could be created.

Well, was it visionary? A little bit. Because even though there were no cell phone towers anywhere and even though the FCC had yet to open any frequencies, and even though no one knew that there was such a thing on the horizon as a cellphone, Mitchell and his team at Motorola knew that cell technology was where the future was going to be and that was where they were going to make their bet.

So they pumped more than 100 million dollars, Motorola did, into the development  of this technology. Although creating the actual cell technology was not easy, Motorola continued. They had a working cellphone by 1973, and all that was actually missing was government licensing. It had taken the company many years to get to this point but they said it was where they had to go.

AT&T nevertheless was the industry giant and what was it focused on? Not cellphones but car phones, and that proved to an even bigger hurdle. So in 1973, 97 years after Alexander Graham Bell made the first phone call ever (what did he say by the way? “Mr. Watson come here. I want to see you.”) Martin Cooper became the first person ever to speak over a cellphone. It was then that Cooper logged his two pound telephone, containing 2,700 different parts to Lexington Ave. in Manhattan and called his friends Joel Engel. The company obviously had high hopes later that year when the FCC announced that yes, it was going to open the high end of the VHF band.

But the FCC decided to grant an exclusive license not to Motorola but to, yes, AT&T.

Motorola was ready. It sent people to Washington, D.C. to testify before Congress and to the FCC. Motorola had every reason to believe that regulations be damned, they’re going to get their new technology out there. And yet, for some reason, maybe it was lobbyists, maybe it was the era, the FCC decided to grant an exclusive license not to Motorola but to, yes, AT&T for its mobile phone business, not for any kind of cell phone business. Even though at the time there’s only a couple of mobile phones available.

So what did Motorola do? They petitioned the FCC for reconsideration and it’s amazing to even share a start-up story with you that has to do with government regulations and a government hearing but when you find out what they did I think you’re going to really enjoy the topper to the story. So, Motorola knew it had to do something different and they created this little secret that they kept up their sleeve. The FCC granted reconsideration although they were clearly not inclined to grant Motorola any kind of request. But Motorola sent its team to the hearing a day or two early to get things ready.

And what they did was this:

Part of the necessary secret apparatus that they brought was placed atop a building near where the consideration hearing was going to take place, on the day of the hearing the FCC commissioner called a hearing to order. In attendance were several senators and congressman. andOf course AT&T executives, their lobbyists and people from Motorola, including John Mitchell and the rest of the FCC commissioners. The FCC commissioners explained that while Motorola had every reason and every right to seek reconsideration at the hearing the decision had been made and the decision was probably going to be final. The AT&T mobile phone technology system would set the standard. AT&T had done this for a long time and had done it well and Motorola would just have to adapt to the protocols that AT&T was creating.

Finally, Mr. Mitchell was allowed to speak.

It had no wires, it was attached to nothing.

He slowly stood up and opened his coat pocket and in his hand was a large, white, boxy looking phone with a little antennae at the top of it and a mouthpiece at the bottom. It looked like what Jerry Seinfeld used to talk into, if you watched Seinfeld back in the day. Big, clunky, heavy thing. It had no wires, it was attached to nothing. The commissioners had never seen anything remotely like this contraption.

Across the street, atop the neighboring building, the secret portable cell tower the Motorola engineers had set up the day before powered up and began to emit a silent, little signal. “Here,” Mitchell said to the commissioner, “Make a phone call.” The commissioner was confused. He looked at this thing and said, “How?” So Mitchell demonstrated to the chairman, and to the senators and to the congressman, to AT&T, and everyone else, what the future was going to look like. He walked up to the FCC commissioner, showed him how to turn on the device, showed him how to dial and how to hit send. He then stood back and waited.

And so here it was, at a reconsideration hearing, in 1973, in Washington, DC, that history was made in the first cell phone call ever made in Washington, D.C.

Needless to say, the FCC commissioners were amazed at what Motorola had been able to accomplish. The cell technology had developed and was far superior to anything they had seen before, including the AT&T people at the the time, and the FCC reversed its decision and opened up the high end of the VHF band to everyone and Motorola became the leader in cell phone technology.

And now you know the start up story for that little device that’s sitting in your pocket.

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