Receiving a U.S. patent for the invention of the telephone March 7, 1876, Alexander Graham Bell formed the Bell Telephone Company in 1877, which in 1885 became AT & T When the original patent Bell expired 15 years later in 1894, the telephone market open to competition and 6,000 new telephone operators started while the Bell Telephone Company showed a significant financial downturn.

April 30, 1907, Theodore Newton Vail returned as president of AT & T.Vail believed in the superiority of one phone system and AT & T have adopted the slogan "One policy, one system, universal service." This is the philosophy of the company for the next 70 years.

Under Vail, AT & T started buying most smaller telephone companies, including Western Union telegraph. In an effort to avoid government action antitrust suits, AT & T and the federal government signed an agreement known as the Kingsbury Commitment.