Prelude to Change: Data Communications, 1949–1968

moon or Jimi Hendrix’s burning guitar in Monterey, the foundations of an aston­ ishing era of technology-based change were being forged. And as with all iconic moments, hundreds of people and decades of effort went into the changes that crystallized in public perceptions as a history-altering spectacle. The 1960s were likewise a pivotal decade for the data communications industry, even if there was little public fanfare to accompany the key developments. Throughout this book we describe market-structures—dynamic relationships between markets and pop­ ulations of firms that pursue similar product opportunities. During the 1960s, the market-structure for data communications slowly began to emerge, in spite of the dominance of two giant firms AT&T and IBM. The principal obstacle to the emer­ gence of the data communications market-structure was AT&T’s contesting the attachment of any devices not of its own, as well as the interconnection of other networks, to ‘its’ telephone network. But as we will see in this chapter, the FCC reversed its long-standing support of AT&T in 1968 and allowed independent com­ panies to sell equipment that connected to the public telephone network. The FCC’s decisions transformed telecommunications—clearing a path for a rush of new businesses forming around new technologies and the growing adoption of business computing. But before we get to the fateful events of 1968, and the extraor­ dinary events of the next two decades that are the main subject of this book, we need to begin with a brief review of some of the important decisions and events that occurred between the end of World War II and 1968. We have organized this history into five sections: the federal government and its interactions with AT&T, Prelude to Change: Data Communications, 1949–1968