CTA Centennial Part 5d: A Decade of Disruption – 1984 'Phones It In'

(Image credit: Getty Images, Nick Dolding)

This year marks the 100th anniversary of the founding of the CTA (Consumer Technology Association), which started out as the RMA (Radio Manufacturers Association). This is the fifth in a series of essays exploring and celebrating CTA’s and our industry’s first century of invention, innovation, and entrepreneurship, assembled from varying technology historical research and writings I have done over the course of 20-plus years, including from an annually updated industry history for CTA’s now-defunct Digital America, 20-plus years of CTA Hall of Fame inductee biographies, and numerous tech history articles for a variety of publications over the years.

Here are the previous chapters:

George Orwell’s dystopian vision for the upcoming year of 1984 loomed large in the late 1970s and early 1980s. But just as similar Y2K fears would fizzle 16 years later, U.S. and Western society, fortunately, didn’t resemble the authoritative information-manipulating surveillance state conjured by Orwell – he was just around 40 years too early.

Thankfully, in the real world at large, the steady stream of depressing tidings and events of the late 1970s seemed to be subsiding and happier times emerging. Six U.S. embassy aides managed to escape from Iran in January 1980. The U.S. Olympic hockey team upset the heavily favored Soviet Union team in the “Miracle on Ice” to win Olympic gold on February 22, 1980. All 52 Iranian hostages were released the day Reagan was inaugurated as president on January 20, 1981.

Mood-lightening mindless distraction seemed to be the order of the day: Steven Spielberg’s throwback adventure Raiders of the Lost Ark debuted in June 1981, Princess Di married Prince Charles in what seemed like a fairy tale wedding in July, and MTV with 24/7 music videos launched August 1, 1981. David Letterman launched his wacky talk show in February 1982, Disney’s futuristic EPCOT Center opened in Orlando, FL, that October, and Michael Jackson thrilled us with “Thriller” a month later. The final episode of “M*A*S*H” garnered the highest-ever TV viewership share on February 28, 1983, and the next month Madonna made her controversial not-so-virginal lingerie debut.

While society seemed to have at least staved off – or at least blissfully ignored – other bad news (the growing AIDS epidemic, the firing of striking air traffic controllers, the invasion of Grenada, the Falklands War, Tylenol poisonings) and Orwellian extremes, the real world of 1984 – especially January 1984 – did produce a notable shift in how new tech got into the market. Three of the biggest new tech developments of the era didn’t take the usual direct path from R&D labs to factories to stores to our homes. Instead, somewhere in the supply chain, some tech took a slightly serpentine detour through federal courts and agencies.

(image credit: Chicago Daily Tribune, Sunday, April 20, 1924)

Courts and governments, of course, have always influenced tech development, even acting as our industry’s ignition agent. After failing to gain congressional approval for a military monopoly over new radio technology in the months after WWI ended, the U.S. Navy urged Owen Young and General Electric, in the interest of national security, to create an American radio company to keep the foreign British Marconi from gaining global radio domination. The progenitor of CTA, RMA, was founded to defeat a proposed federal tax on radios.

The more direct government influence on tech in 1984 simply signaled the increasingly pervasive role the regulatory state, government policy, industry standards, and other lawyerly activities would assume in our industry.

But influence isn’t the same as the direct legal and federal action that enabled, created, or simply just allowed several technological developments to bloom into full-fledged society-disrupting industries in 1984. Three lawyers/judges arguably exerted more influence in the tech world in 1984 than any industry engineer, entrepreneur, or executive.

Judge Harold Greene

First on the docket was dealing with AT&T’s seemingly autocratic monopoly over our telephone system.

Colloquially known as Ma Belle, AT&T’s sole proprietor power and control over the nation’s communication system made an increasing number of entities and business people uncomfortable, angry, and even fearful. The 1967 black comedy The President’s Analyst postulated that The Phone Company was plotting to insidiously implant wireless devices into our heads to connect everyone and then to replace everyone’s name with a number.

The first ding to AT&T’s home phone hardware autonomy was the FCC’s June 26, 1968, Carterfone decision, which allowed consumers to attach devices to their AT&T-owned phones such as third-party speakers, answering machines, and, most importantly for the development of the Internet, modems.

By 1974, the U.S. Justice Department grew some of the cojones the FCC had to take on the country’s most controlling and feared monopoly and filed an anti-trust suit against AT&T. In 1978, the case finally made its way into a courtroom, the District Court for the District of Columbia, presided over by Judge Harold H. Greene.

While AT&T’s control may have been concerning to many, the general public was puzzled by what they considered unnecessary government action. After all, our telephones – both at home and ubiquitous pay phones – were the one thing we could count on in our lives to just work. Why fix something that ain’t broke?

It took a year, but the DOJ and AT&T finally signed a consent decree that split AT&T into seven Regional Bell Operating Companies (RBOCs), aka “Baby Bells,” similar to how the courts in 1911 broke up Standard Oil into several smaller “baby Standards” companies. The breakup was officially completed by Judge Greene on January 1, 1984.

While not everyone was happy with the resulting confusion, AT&T’s breakup resulted in two outcomes that directly impacted the consumer electronics industry. The first impact was AT&T’s divestiture of its Western Electric hardware division.

Pre-breakup, our home phones – largely those basic black square receivers equipped with a rotary dial and corded handset – were rented from AT&T’s Western Electric, which was responsible for home phone maintenance. If your phone broke, the phone company just brought you a replacement. One less thing to worry about.

Post-breakup, we could now buy – and were responsible for – our own home phone. Or, looking at it from the industry point of view, electronics companies – including the Bell companies – drooled over the judicial gift of two whole new product categories to exploit: home phones and telephone answering devices (TADs).

And, boy, did electronics makers exploit the new home phone product business. In no time flat, consumers could choose from the most wild and wacky array of phone designs imaginable – and some folks were really imaginative. You could buy phones shaped like sports objects – the football phone was probably the most memorable; fruit – bananas were, of course, a natural; body parts – big red “hot lip” phones were, well, hot; assorted non-electrical objects – there were multiple shoe phone styles, for instance; commercial brands such as Coca Cola, Ronald McDonald, and M&M phones; sports teams; and, especially licensed characters – you could buy Disney phones, including several Mickey Mouse phone variations, Looney Tunes phones – my favorite was the animated and actually dangerous Tasmanian Devil phone from which you had to carefully extract the receiver from his sharp-toothed mouth, movie tie-ins, Sesame Street, DC and Marvel superheroes, the Simpsons, Popeye, Garfield, Peanuts character phones… Licensing lawyers had a field day.

The variety of home phone choices seemed confusingly endless, and sales of both home phones and TADs exploded.

Look Ma, No Wires

Perhaps more impactful than this abundance of playful home phone alternatives, available in both old-fashioned rotary dial and more modern Touch-Tone push-button varieties, was the emergence of the cordless phone. Cordless phones had been available pre-breakup, but these early models were unreliable, reception was intermittent and scratchy depending on what was between the receiver and the base, they didn’t provide a lot of range, and poor battery life meant the cordless receiver needed to stay on its base as if it were wired. The only improvement these first cordless phones provided was the removable of the corded handset choking hazard.

Once consumer electronics companies – especially former CB radio makers such as Escort, Cobra, and Uniden – saw cordless phones as a new product, they applied their technological legerdemain to make them practical and sellable.

Cordless phone makers were further boosted by the feds. In December 1983, the FCC approved 10 new, wider-range, and more interference-resistant 46- and 49MHz channels, the inclusion of which in cordless phones became mandatory on October 1, 1984. A decade later, even wider range 900MHz models became available, followed a year later by more interference-resistant digital spread spectrum models – yes, using the frequency hopping tech co-invented by Hedy Lamarr during World War II – using higher 2.4-GHz and 5.8-GHz frequencies.

But I’m getting ahead of myself.

Bottom line, the home telephone finally became a bona fide consumer electronics product category more than a century after its invention by Alexander Graham Bell, thanks primarily not to any engineers, entrepreneurs, or executives, but to Judge Harold Greene and the FCC.

True Wireless

Motorola DynaTAC 8000X Old Mobile. World first mobile phone. Vintage classic mobile phone. 3D Rendered Illustration.

While Judge Greene was trying to figure out how to break up AT&T, the FCC was similarly figuring that maybe an AT&T monopoly over the new cellular phone network wasn’t such a hot idea, either. As earlier related, on April 3, 1973, Motorola demonstrated two hand-assembled DynaTAC battery-powered portable phones. In tandem with the demo, Motorola also submitted a lengthy report to the FCC arguing against an AT&T cellular monopoly, followed by a PR, lobbying, and marketing blitz to prove to the FCC that cellular competition could provoke innovation, i.e., a portable phone.

Cellphones are now a fact of life, so it’s important to understand what a radical concept a portable phone was at the time. Payphones were everywhere – more than 2 million of them dotted the U.S. urban, suburban, and rural landscapes. The expression “drop a dime” is a reference to the long-time cost of a payphone call (although by the late 1970s, payphone calls had jumped to 15 cents). Clark Kent never had a problem locating one to change into Superman.

And Motorola’s pursuit of a portable phone was not purposely prescient – it was pure survival. When people spoke of “mobile” phones during this period, they referred to car phones. While AT&T ran the limited car phone networks, which could only support a few thousand subscribers in a metro area hence the need for a cellular network, Motorola sold around two-thirds of the car phone hardware. An AT&T cellular monopoly meant Motorola would be out of the mobile phone business.

Plus, given the tech available at the time, a portable phone was hardly practical. No one, not even the folks involved in building the cellular networks or making gear thought cell phones would be a mass-market consumer device. The “portable” phone would be heavy – existing car phones required luggage-sized electronics to be mounted in a car’s trunk. Battery life would be short. The service would be insanely expensive since funds would be needed to build out a nationwide network. And the phones themselves would cost thousands of dollars.

And did we mention the country was blanketed by literally MILLIONS of cheap payphones?

Just as the industry cognoscenti at the time couldn’t fathom why someone would buy a computer for the home, the need or desire for a portable phone was considered even more phantasmagorical.

Not even Motorola figured that portable phones would be a thing. In its DynaTAC report to the FCC, Motorola wildly blue skied projected 200,000 users in any given metro area, and that 95% of cellular users would be calling landline phones, not other cellular phones.

There is honest disagreement about how much weight the FCC gave Motorola’s portable phone demos or its competition-breeds-innovation argument, or whether the FCC was simply drafting in Judge Greene’s anti-trust wake, or a combination of these and other considerations.

Before the FCC could make up its mind, however, the first cellular networks were launched in Japan by Nippon Telegraph and Telephone in 1979 and became the first nationwide cellular carrier by – you guessed, it – 1984.

In all events, on May 21, 1981, the FCC ruled against an AT&T cellular monopoly and instead allowed for two carriers – one “wireline,” or landline phone service provider, i.e., a soon-to-be Baby Bell, and one “non-wireline” carrier, aka a purely cellular provider – in each of the 734 designated geographic markets called Cellular Market Areas (CMAs).

First cell call AT&T Chicago David Meilahn

While both Judge Greene’s anti-trust and the FCC’s cellular deliberations were underway, AT&T had already started constructing cellular networks in major cities, with Chicago and the Washington D.C./Baltimore corridor being the first to come online. On October 13, 1983, insurance agent David Meilahn became the first cellular phone customer when he bought a cellular car phone-fitted Mercedes-Benz 380sl in the parking lot of Chicago’s Soldier Field on his birthday. Phone service was provided by AT&T’s newly created Ameritech RBOC and cost $50 a month (almost $160 in today’s dollars) plus 40 cents a minute from 9 am to 5 pm, 24 cents a minute off-peak.

Who bought the first actual portable cellphone and when, however, is lost to history, primarily because, again, everyone thought of a “cellphone” as simply a better car phone. Motorola had unveiled the first portable phone, the DynaTAC 8000X, designed by Motorola’s industrial design legend Rudy Krolopp, in March 1983, but it didn’t go on sale until Ameritech launched cellular service in Chicago that fall.

The DynaTAC 8000X was quickly dubbed the “brick” phone. It weighed 1.74 pounds and stood more than a foot tall not including its whip antenna. You got barely 30 minutes of talk time on a single battery charge, which took a massive 10 hours.

Motorola designer Rudy Krolopp with DynaTAC portable cellular phone prototypes, circa 1983

In 1984, Ameritech sold 12,000 cellular phones. Only around 10% of them were the DynaTAC 8000X, not surprising considering the phone’s awkward ergonomics, limited battery life, and if-you-have-to-ask-you-can’t-afford-it cost: $4,000 – $12,600 in 2024 dollars – versus a still hefty $2,500 for a car model.

Even if carriers thought portable phones would never amount to more than a niche market for the super-rich, and even with the AT&T breakup, cellular network build accelerated in 1984 in major metropolitan areas. Soon after the launch of cellular service in Chicago, service – and sales of the DynaTAC 8000X – started in D.C./Baltimore, and service came online in other major metro areas such as New York, San Francisco, and LA in time for the 1984 Summer Olympics. By the end of 1984, there were 91,600 cellular customers in the U.S., a smidge more than 340,000 at the end of 1985, the bulk buying car phones.

Appearances of the 8000X in films helped raise the portable’s profile. In 1984’s John Hughes classic Sixteen Candles, the father of Molly Ringwald’s rich boyfriend had an 8000X in his Rolls Royce. But the most prominent cinematic appearance of the 8000X was by Michael Douglas’ greedy Gordon Gekko in 1987’s Wall Street, which helped boost the portable phone’s cool factor and sales. “Guess where I’m calling you from?” became an annoying question by new 8000X owners.

But it would take years for cellular networks to be built out to provide critical mass coverage and for portable phone technology to improve and shrink in both size and price to make them not only a mainstream consumer electronics product but the single most popular and ubiquitous consumer tech product in history.

Your browser is out-of-date!