"3) In the heyday of the telegraph era, deploying lines was an extremely expensive and capital-intensive process, and it wasn't until other technological advanc

"3) In the heyday of the telegraph era, deploying lines was an extremely expensive and capital-intensive process, and it wasn't until other technological advancements that made possible various multiplexing and aggregation schemes (frequency-division, and later digital TDM) came along that the idea of running a copper line into every home really got to be realistic[1]. I agree that Western Union was a bit shortsighted in turning down this patent, but one could hardly blame them for thinking that universal telephone service wasn't economically possible. That's like selling a business idea today that relies on everyone having a 10 terabit fiber cable run to their home. Yeah, it's possible, and I have no doubt someone will make fun of me in a decade or two for naysaying it in any way, but would you invest $2bn in a related patent today?" I disagree - Multiplexing didn't play a significant role in the local loop until the 1980's. There were multiplexing techniques for toll lines prior to the paper you cite - look up phantom circuits. [1] If you want to check out about what drove the creation of the telephone network check out "Universal Service: Competition, Interconnection and Monopoly in the Making of the American Telephone System" [2], its a great book on how local toll traffic (among other things) drove the creation of the telephone network. Western Union didn't see the future in the telephone network because it disagreed with its existing model - wich is to say office to office messages - also their network was multiplexed from very early, telephones for practical reasons couldn't be until the invention of the vacuum tube. [1] http://en.wikipedia.org/wiki/Phantom_circuit http://en.wikipedia.org/wiki/Phantom_circuit [2] http://surface.syr.edu/books/18/ http://surface.syr.edu/books/18/