Until the 1980s, most households rented rather than owned their phones.

Science & Industry

H ome phones really took off in the 1940s, but for the next several decades, almost nobody who used a telephone actually owned one. Instead, most customers rented the phones in their houses. Phone rental rates typically ran between $1.50 and $4.60 a month (depending on the model), and the charge was rolled into your monthly cost of service.

So why didn't people just own their phones? They didn't have a choice, due to the monopoly that AT&T had on telecommunications for the vast majority of the 20th century. AT&T provided the phone service and owned the company that manufactured the equipment, Western Electric, and required their customers to rent Western Electric phones.

In 1968, after several failed antitrust charges, the Federal Communications Commission (FCC) finally ruled that AT&T wasn't allowed to restrict customers to Western Electric telephones. Yet AT&T got around this by requiring that customers pay extra for the installation and use of special adapters for phones from outside companies, claiming third-party equipment could damage the phone network.

The Department of Justice took another crack at the corporate giant with an antitrust suit in 1974, but preparation took so long that the trial didn't officially start until 1981. The decision finally came down in 1982 that AT&T would have to divest from several smaller regional phone companies, finally easing the corporation's stranglehold on the telecommunications industry.

After that, the switch to phone ownership was rapid, and service providers gave customers opportunities to buy their rented phones outright. With the change came a slew of new telephone options from AT&T competitors, including speed dial, cordless phones, and Mickey Mouse styles.

Giftable Layers That Always Hit the Mark

This season calls for layers that look sharp without any fuss. Collars & Co.'s polished polos and crisp collared knits are holiday staples — perfect for gifting and even better for wearing. Explore their Holiday Gift Guide for can't-miss ideas, and enjoy seasonal deals like Buy 3, Get the 4th Free and up to $150 off your first order.

Shop Gift Guide

*This content is brought to you by our sponsor which helps keep History Facts free.

By the Numbers

Pages in a motion to dismiss filed by AT&T's lawyers in 1981

550

Active mobile phone service plans in 2022

8.58 billion

Did you know?

The first cellphone call was a taunt.

On April 3, 1973, Motorola engineer Martin Cooper stood on 6th Avenue in New York City to test his newest invention: an early prototype of a cellular phone. His first call was not to a friend or colleague, but to Dr. Joel Engel, his equivalent at rival Bell Labs. "Hi, Joel? It's Marty Cooper," he said. "I'm calling you from a cellphone, a real, handheld, portable cellphone." Cooper later claimed that he could hear Engel gnashing his teeth on the other end. The phone he used eventually became the Motorola Dynatac 8000X, which was released in 1984 and cost the equivalent of more than $11,000 in today's dollars.

Thank you for supporting our advertisers!