In Germany the telephone was a government monopoly from the very beginning. Heinrich von Stephan was Postmaster General of Germany and Manager of the Imperial Telegraphs at the time when the telephone was first brought to public notice. He was an active administrator, founder of the Universal Postal Union, and was quick to grasp the possibilities of the new invention. In 1877 he wrote enthusiastically to the Imperial Chancellor, Prince Bismarck, of experiments in the establishment of telephone communication between Berlin and Friedrichsberg. He suggested that the telephone be utilized as an adjunct of the telegraph service in rural post offices where there was not sufficient traffic to require the services of a trained telegraph operator. The first public use of the telephone in Germany was along these lines which, it will be noted, differ from its early utilization in the United States. In America exchange service between persons in the same community was the basis of the early public service, the local areas being gradually linked by long distance lines. In Germany, on the other hand, the toll lines came first as a substitute for the more expensive telegraph facilities. Later, however, the German Government introduced exchange service in Berlin, Hamburg, Cologne, Frankfort, Bres lau and elsewhere.
A like policy of government ownership from the first was followed in the German states of Bavaria and Wurttemberg, where the telephone systems were operated by separate state ad ministrations until 1920 when they were transferred to the admin istration of the Reichspostministerium. At present Germany has more telephones in service than any other nation except America.
In France the telephone was first exhibited at the Paris World's Fair in 1878, where it attracted little interest. In the following year, however, representatives of American telephone manufacturers approached the French tele graph authorities with a view to securing permission for the estab lishment of telephone service in Paris. The French telegraph officials were unwilling to undertake the development of telephone service themselves, but granted concessions on a royalty basis to several different telephone companies. These concessions were passed about from one concern to another until in 1880 they were all consolidated in a single company called the Societe Generale des Telephones. Public telephone service was opened by this company in Paris early in 1881. The French Government established telephone exchanges at Rheims, Roubaix and Tour coing in 1883 and in several other commercial centres during the next few years. The private company also established exchanges in some other cities besides Paris, but in 1889 its entire system was taken over by the French Government, which has operated the telephone service throughout France ever since. The French telephone system has been developed to a much greater extent in Paris than in the less densely populated sections of the country.
In Switzerland a concession was granted by the government for the establishment of a privately owned telephone system at Zurich in 188o; and the government itself opened exchanges in Basel and Berne during 1881 and a year later at Geneva, Lausanne and Winterthur. After that the government proceeded rapidly with
the establishment of new exchanges and purchased the private system at Zurich upon the expiration of the franchise. Since 1886 the government itself has operated all telephones in Switzerland and the service has been developed to a greater extent than in many other European countries.
In Belgium concessions were granted to a number of private companies which established telephone systems at various cities, but these properties were bought by the government at the expiration of their respective franchises and since i896 the telephone has been administered as a government monopoly throughout the country. In the Nether lands a number of concessions were issued, several of the most important ones being ultimately consolidated in a single company which also enjoyed the right to establish inter-urban telephone lines. The competition of these lines with the government tele graphs, however, led the authorities to acquire the interurban telephone lines upon the expiration of their licenses. Municipal telephone systems were established in various Dutch cities suc ceeding those of the private company. Later the government adopted a policy of acquiring these local municipal networks with a view toward the ultimate creation of a single government sys tem operating throughout the country.
In Austria concessions were early granted to private companies for the establishment of telephone services at Vienna and a number of other important cities. Long distance lines were constructed by the telegraph authorities, who also opened their first local exchanges in 1887. Subsequently the con cessions were bought in by the government and the telephone business became a government monopoly. Much the same course was followed in Hungary. Italy granted a large number of con cessions for local telephone companies and telephone competition was inaugurated in a number of the important cities. Ultimately, however, the disadvantages of competition became apparent and consolidation took place, either voluntarily or at the instance of the municipal authorities. In 1883 the concessions were regular ized and placed upon a uniform basis surrounded by somewhat onerous conditions. In 1892 the conditions surrounding these concessions were liberalized, but Italy nevertheless failed to keep pace with other great powers in the development of telephone service. After various legislative attempts to encourage the private companies the government in 1907 adopted the policy of buying certain of their systems from time to time. Since the accession of the present regime, however, there has been a return to private ownership in Italy, territorial concessions for the opera tion of local telephone systems in various sections of the country having been granted to private interests while the government has maintained the operation of the long distance lines.