American History 1988
Chapter 145 - 139 Arrogance

Chapter 145: Chapter 139 Arrogance

After spending two days at the AT&T headquarters in St. Louis, Mississippi, William Kennard returned to San Francisco.

His main purpose of visiting the headquarters was to report on the privatization of the NSF network.

Because it had already been split due to antitrust once, AT&T could now legitimately enter the telecommunications industry.

The market for NSF network privatization certainly attracted AT&T’s interest, but the situation was somewhat complicated.

The current network data transmission relies on telephone lines, which are owned by the local Bell companies that spun off from AT&T.

AT&T itself has no hardware resources for networking and had already completed its separation from the local Bell companies.

From the perspective of organizational structure and shareholder groups, AT&T has no association with the seven regional Bell companies. Their boards of directors and decision-making bodies are independent of each other, with no interference.

So the awkward part was that AT&T could enter the telecommunications industry, but it lacked the hardware resources.

The seven regional Bell companies had nationwide telephone lines but didn’t have telecommunications-related business.

Even more awkwardly, the two couldn’t join forces because they had just been split due to antitrust regulation.

Although William Kennard had met with executives from several regional Bell companies this time, in the end, they had not found a suitable way to cooperate.

"Boss, your coffee." Ruth, who came off as cold outside, reverted to her coquettish demeanor as soon as she entered the office.

Knowing her way around, she didn’t need William’s instruction to open the drawer and find that little box.

"Boss, there’s only one left~" Ruth licked her red lips, unsure whether this amount would interest William.

"Leave now, Ruth, and call Alex over on your way out." William Kennard took off his coat and began to bury himself in the paperwork that had accumulated over the past two days.

Ruth, who had been preening, paused, her keen senses picking up that something was unusual about William. "Alright, Boss, I’ll go now."

"Also, collect the latest news and information about Byte Software and bring it over." William Kennard added another instruction just as Ruth swayed to the door.

He still remembered the young man he had met in the airport, who had made a lasting impression on him.

Flooded by advertisements during two round-trip flights, William Kennard now had Teams’ advertising slogans filling his mind.

Alright, as they wished, William Kennard decided to take a serious look at this potential threat.

In less than five minutes, Alex rushed in, holding a stack of documents.

"Boss, the investigation into Teams software by the computer systems company is complete."

Without waiting for William Kennard’s instruction, Alex placed the gathered materials in front of him.

"So we found something, right?" The expression on Alex’s face told William everything he needed to know.

"After a detailed analysis of Teams software, we have identified traces of AT&T’s technology at two distinct points."

"Then what are we waiting for? Have our lawyers taken action?" William Kennard asked after hearing Alex’s answer, losing even the interest to look at the documents in his hands.

"It’s a bit complicated," Alex hurriedly flipped to the most crucial page of the materials, "For one, the vocoder technology. It’s the foundation of voice data packets, a prerequisite for VoIP calls, and it comes from Bell Labs."

"So?" William Kennard spread his hands, "Is it because it belongs to the original Bell Labs?"

After the antitrust breakup in ’84, the current AT&T only inherited half of the estate from Western Electric and the original Bell Labs.

The once renowned Bell Labs was also split into two parts, with one belonging to the current AT&T and the other to other regional Bell companies.

If this technology belonged to the regional Bell companies, then AT&T’s intention of suing Byte Software might indeed be problematic.

"No, Boss, that’s not the point." Alex explained with resignation, "The vocoder technology was created in 1938, and it’s been 52 years since then. So..."

"So we have no rights anymore because its patent protection period has passed." William Kennard’s expression was grave; he hated the 20-year limit on technology patents more than ever at that moment.

"Talk about the other point. I’m sure it won’t disappoint us, will it, Alex?" If he dared to say no, William Kennard swore he would make Alex pay.

"Another technology, Adaptive Differential Pulse Code Modulation (ADPCM), also originated in Bell Labs. However, its patent was filed in 1973, which is still within the protection period."

"Good, continue~" William Kennard quietly retracted his decision to fire Alex.

"ADPCM is a key technology for voice sampling; it’s part of the G.722 standard wideband audio codec defined by the International Telecommunication Union (ITU-T).

Teams software adopts the G.722 standard for voice data sampling, and that’s our technology."

Alex flipped through a few more pages of the document, pointing to the information and explaining, "However, the trouble is that ADPCM belongs to Southern Bell Labs, and additionally, as G.722 is a public standard, it is recommended by the International Telecommunication Union."

"William Kennard didn’t care about those details at all, "You just need to tell me, can AT&T file a lawsuit against Byte Software on this basis? I’ll handle Bell South myself."

Alex considered for a moment and then nodded resolutely, "They can! The standards of the International Telecommunication Union are merely recommended mechanisms. If we disregard their opposition and forcefully launch a lawsuit against Byte Software, the patent protection regulations will still apply to us."

"When has America ever followed international organizations’ arrangements? Now, gather our lawyers, it’s time for them to make a move. I will make a call to Bell South."

"Within this year, I want to see Byte Software out of business, and then next year, AT&T Computer Systems can launch a similar software to fill this market void."

William Kennard was now very eager to meet that young man again and tell him personally, "Kid, you bumped into me, so I’m going to shut down your company!"

...

Virginia, the town of Vienna. It was Dean’s first visit to this old dominion, recognized as the mother of Presidents, one of the initial thirteen colonies.

The White House was just a dozen or so miles away from Dean, in the Columbia district, the center of power in the whole of America.

However, Dean was not here to admire the splendor of Washington; he was here to visit an online service provider known as AOL.

"Dean, your business plan is detailed and ambitious, but there’s one thing I can’t figure out," Steve Case put down the plan he was holding, incredibly curious about this young man who had suddenly come to visit.

"Steve, I am ready to answer any questions," Dean gestured, showing his sincerity for the other party to ask away.

"Why come to us for such a grand plan of network interconnectivity?" That was the part Steve Case couldn’t understand, "AOL has only about 100,000 users, and in Virginia we’re only third."

"Because AOL provides online services for people who are not familiar with computers, that reminded me of Apple in the past," Dean became even more convinced of his idea after experiencing AOL’s client.

Apple significantly lowered the barrier to using computers for ordinary people, thus opening up the personal computer market.

AOL is doing the same thing right now, their client stands out in stark contrast to UUNET. The latter is quite famous in the tech community but has a higher barrier to entry.

Although AOL’s user base is limited at the moment, Dean is optimistic about its future.

Besides, AOL’s predecessor is Quantum Technology, which had previously developed corresponding service platforms for Apple II and IBM compatibles, so it already has a certain user base.

As long as it continues on its current path, AOL is sure to win over ordinary users.

Steve Case was barely able to accept Dean’s explanation, "But, the plan doesn’t seem likely to be effective with only AOL."

"To be frank, I have also contacted CompuServe, and they have already agreed to join. After you, I’ll be visiting UUNET, PSI... these other companies," Dean added.

Since private network interconnectivity is the goal, the more participants, the better, and Dean planned to meet with other internet service providers one by one.

"One last question, who will be in charge of managing this data exchange center?" Concerned about data security, Steve was very cautious.

"Either a third-party neutral organization or we take turns hosting," Dean preferred the third-party organization, but he could only offer his suggestion.

Network interconnectivity, data exchange center... with AOL’s scale in mind, this would undoubtedly benefit them.

Although private service providers would achieve data connectivity, users would still use the corresponding service packages.

The difference would be that, after interconnectivity, the internet user base could be linked together, allowing the internet’s network effects to become possible for the first time.

If AOL joined this community, its paid user base would definitely skyrocket.

What really excited Steve, however, was the clear distinction between AOL and the other service providers—the richness of online content it offered.

Aside from CompuServe, which could be considered a nominal competitor, others like UUNET and PSI focused on offering hardware network services.

This was akin to telecom and mobile companies in later times only providing broadband services, not content browsing.

AOL, on the other hand, filled this gap, and joining such an organization would all be benefit and no drawback for them.

"Dean, we would be happy to join the network interconnectivity organization, but this requires everyone to sit down together to set the rules," Steve proposed.

Steve understood well that it would be difficult to unify such a complex coalition with just their individual wishes.

"OK, if things go well, I will invite everyone to meet as soon as possible," Dean was already intending to feel out each company’s stance, and if they were all interested, discussions could follow.

His eagerness to push for network interconnectivity was not just for the sake of his own shares but also to achieve substantial internet scalability sooner.

Tim Berners Lee’s hypertext markup language was nearing completion, and if the internet also achieved scalability, there would be much more Dean could do.

Plus, he was planning on discussing another deal with AOL—as opposed to UUNET, AOL’s shares were of much greater interest to him.

But just as he was preparing to continue his visits, starting with UUNET in Virginia, an urgent call from California interrupted his itinerary.

Byte Software, had received a letter from a lawyer.