ENGiNEERiNG ANd
`OPERATioNS iN
`TilE BELL SySTEM
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 1
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`

`
`ENGINEERING
`O and
`PERATIONS
`BELt
`SYSTEM
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`CISCO SYSTEMS, INC. Ex. 1012 Page 2
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`

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`CISCO SYSTEMS, INC. Ex. 1012 Page 3
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`

`
`ENGINEERING
`OPERATIONS
`B~nLt
`SYSTEM
`
`Second Edition
`Reorganized and Rewritten
`Telecommunications in the
`Bell System in 1982 - 1983
`
`Prepared by Members of the Technical Staff
`and the Technical Publication Department
`AT&T Bell Laboratories
`
`RJ. Rey, Technical Editor
`
`AT&T Bell Laboratories
`Murrav Hill. N.J. '
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 4
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`

`
`Copyright© 1977, 1983 by Bell Telephone Laboratories, Incorporated
`All rights reserved
`
`This second edition differs significantly from that of 1977. It
`contains revised and updated information, new entries and
`illustrations, and a different organization and format.
`
`Second Printing 1984
`
`International Standard Book Number 0-932764-04-5
`
`Library of Congress Catalog Card Number 83-72956
`
`AT&T Customer Information Center Select Code 500-478
`
`No part of this publication may be reproduced or transmitted in
`any form or by any means, electronic or mechanical - including
`photocopy, recording, or any information storage and retrieval
`system - without permission in writing from the publisher.
`
`Printed in the United States of America
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 5
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`

`
`1
`
`Structure and Activities
`
`1.1 INTRODUCTION
`
`The Bell System led the development and use of communications equip(cid:173)
`ment and techniques in the United States throughout most of this
`century. It became the nation's major supplier of telecommunications
`products and services ranging from basic residence telephones to increas(cid:173)
`ingly sophisticated information services.
`From its beginnings, the Bell System matched its organizational struc(cid:173)
`ture to the environment in which it operated. Early in the century,
`universal service---..,.providing basic telephone service at an affordable
`price anywhere in the nation-became the Bell System goal. The Bell
`System approached this goal by creating a functional organization: Each
`of the local telephone companies and the American Telephone and Tele(cid:173)
`graph Company (AT&T) itself were organized along the lines of the job
`that had to be done. Tasks in each functional area were performed by
`specialists in that area to maximize efficiency. The local companies were
`responsible for responding to the particular needs of the communities
`they served, but they all used standard technology and operating
`methods. Thus, AT&T and the telephone companies achieved coordina(cid:173)
`tion on a national scale, while responding to local needs. As a result, the
`goal of universal service has been met-nearly everyone in the United
`States has a telephone that is connected to a single nationwide network.
`This public switched telephone network! is available to the general pub(cid:173)
`lic and to other carriers and networks.
`The functional organization that made providing universal service
`efficient and practical was pcssible because, for most of its history, the
`
`1 Sections 3.3.1 and 4.2.1 discuss the public switched telephone network in detail.
`
`3
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 6
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`

`
`4
`
`Introduction to the Bell System
`
`Part 1
`
`Bell System was almost the sole source of telecommunications service(cid:173)
`although under terms and conditions approved by federal and state regu(cid:173)
`lators. AT&T and the telephone companies have changed their organiza(cid:173)
`tional structure to match environmental changes such as new and diverse
`customer needs and, more recently, new markets.
`Now, in the 1980s, the way in which telecommunications services are
`provided is changing entirely. The 1982 Modification of Final Judgment
`(MFJ), which terminated a 1974 Department of Justice antitrust suit
`against AT&T, ordered the breakup (divestiture) of the integrated Bell
`System. AT&T set January 1, 1984, as the target date for completion of
`the massive job of restructuring a business involving about 1 million
`employees and about $160 billion in assets.
`Subsequent sections of Chapter 1 describe the organization of the Bell
`System in 1982, the major provisions of the MFJ, and the postdivestiture
`structure. The chapter was revised late in 1983 to provide an introduc(cid:173)
`tory account of the impact of divestiture. The rest of the book describes
`the engineering and operations of the Bell System at the end of 1982 and
`in early 1983 and does not reflect divestiture because much of the
`material was prepared before the antitrust suit was settled in 1982.2 How(cid:173)
`ever, the primary effects of divestiture are on the structure of the cor(cid:173)
`porate units and the allocation of the roles in providing telecommunica(cid:173)
`tions services. The technology in the network, the considerations
`involved in its design, and the nature of functions required to operate
`the network and to provide service to customers remain essentially
`unchanged. Thus, this book constitutes a valid description of telecom(cid:173)
`munications engineering and operations and meets a growing need for
`an update to the previous book (Bell Laboratories 1977).
`
`1.2 THE BELL SYSTEM IN 1982
`1.2.1 AMERICAN TELEPHONE AND TELEGRAPH COMPANY
`
`In 1982, the Bell System, serving more than 80 percent of the nation's
`telephones, had long been the largest of hundreds of companies provid(cid:173)
`ing communications services in the United States. Before divestiture, the
`Bell System operated as a partnership among AT&T; a number of Bell(cid:173)
`owned telephone companies (known as operating companies); the Western
`Electric Company, Incorporated; and Bell Telephone Laboratories, Incor(cid:173)
`porated. The product of this partnership was service, provided through a
`dynamic and dependable communications network designed, built, and
`operated as a single system.
`
`2 Because the text describes the Bell System in 1982 and early 1983 and was written in that
`time frame and earlier, the reader will find the Bell System referred to extensively in the
`present tense.
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 7
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`

`
`Chap. 1
`
`Structure and Activities
`
`5
`
`Figure 1-1 shows the structure of the Bell System as it was in 1982.
`AT&T, the parent company, was publicly owned by 3.1 million stockhold(cid:173)
`ers. In turn, AT&T owned Western Electric and-totally or partially(cid:173)
`each of the Bell operating companies.3 AT&T and Western Electric jointly
`owned Bell Laboratories. Both AT&T and Western Electric also had
`subsidiary companies (shown on the figure); some of which supported
`Bell System operations, others that provided domestic and international
`communications services.
`
`AT&T
`
`GENERAL
`DEPARTMENTS
`
`LONG LINES
`DEPARTMENT
`
`195
`BROADWAY
`CORPORATION
`
`I-
`
`BELL
`OPERATING
`COMPANIES
`
`WESTERN
`ELECTRIC
`COMPANY
`
`I
`
`I--
`
`AMERICAN
`BELL
`
`I--
`
`AT&T
`INTERNATIONAL
`
`BELL
`LABORA TORIES
`
`I
`
`TELETYPE
`CORPORATION
`
`NASSAU
`RECYCLE
`CORPORATION
`
`SANDIA
`CORPORATION
`
`L.....-
`
`ADVANCED
`MOBILE
`PHONE
`SERVICE
`
`Figure 1-1. Structure of the Bell System (1982).
`
`3 AT&T was sole stockholder in twenty-one operating companies and a minority
`stockholder in two: the Southern New England Telephone Company and Cincinnati Bell,
`Inc. Bell Telephone Company of Nevada is wholly owned by the Pacific Telephone and
`Telegraph Company. Four Chesapeake and Potomac Telephone Companies offer service
`in Washington, D.C.; Maryland; Virginia; and West Virginia.
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 8
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`

`
`6
`
`Introduction to the Bell System
`
`Part 1
`
`AT&T, the parent company of the Bell System, had its headquarters in
`New York City.4
`
`Corporate Functions
`
`General Departments. The General Departments of AT&T set the major
`goals and large-scale programs for the Bell System. They advised and
`assisted the Bell operating companies on such matters as finance, opera(cid:173)
`tions, personnel, legal, accounting, marketing, planning, public relations,
`and employee information, thereby providing continuity of direction and
`consolidating the particular specialities of each Bell System partner.
`AT&T, through its General Departments, coordinated pricing activity and
`represented the Bell System before federal regulatory agencies. It deter(cid:173)
`mined price structures and recommended costing and pricing matters
`through federal agencies.
`The General Departments ensured that new developments, solutions
`to existing problems, and provisions for the future needs of customers
`became part of the entire Bell System. This involved directing the work
`of Bell Laboratories and Western Electric and coordinating the integration
`of new technology into the network.
`. The General Departments established and maintained standards and
`procedures for the Bell System and for the interconnection of non-Bell
`System equipment and facilities with the Bell System network. They
`served as an information clearinghouse for associations of independent
`telephone companies (such as the United States Independent Telephone
`Association) and for general-trade (that is, other than Western Electric)
`suppliers.
`
`Long Lines Department. The Long Lines Department, with headquarters
`in Bedminster, New Jersey, operated the long-distance network. Many of
`its activities were similar to those of the Bell operating telephone com(cid:173)
`panies. Long Lines built, operated, and maintained most of the interstate
`network of long-distance lines, thereby providing interstate and interna(cid:173)
`tional communications services for people throughout the United States.
`It directed the overall design and management of the network and coor(cid:173)
`dinated the teamwork among the various Bell and independent com(cid:173)
`panies who jointly own and operate this complex, widespread system of
`microwave radio, coaxial cable, optical fibers, satellites, and intricate
`switching systems.
`To handle the network efficiently, Long Lines was divided into six ter(cid:173)
`ritorial regions (see Fig1.l.re 1-2). Each region took care of engineering,
`sales, and network operations in its territory.
`
`4 A new headquarters building at 550 Madison Avenue has replaced the building at 195
`Broadway, which was the headquarters location for many years.
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 9
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`

`
`,0 ~\/
`
`-
`
`•
`
`,
`1 I
`/ \
`---~-i ),
`/
`\
`,
`l_ r- __ _
`'~'7' WESTERN REGION
`"
`"'--""7
`I
`I
`1---';
`SA~ FRANCISCO. CA
`L - r- - _
`•
`I
`\
`I
`\
`I
`
`I
`
`\ J -----1-
`: -----
`'{
`
`I
`"
`
`I
`I
`I
`I
`
`Figure 1-2. Long Lines regions and regional headquarters locations.
`
`Corporate Structure
`
`Figure 1-3 is a block diagram of the AT&T organization as it existed in
`1982. The office of the assistant to the president reviewed all aspects of
`the organization and ensured that each unit's plans, budgets, and opera(cid:173)
`It also maintained
`tions were consistent with system requirements.
`liaison with Bell Laboratories and with Western Electric. The figure
`shows the network function and how AT&T's customer-related operations
`and marketing functions were structured to reflect the Bell System's
`market segments: business, residence, directory, and public services.
`
`• Business organizations coordinated the response of the Bell System to
`the needs of business customers; assisted telephone companies in the
`areas of marketing, pricing, costing, forecasting, training, and budget
`matters related to serving business customers; and supported tele(cid:173)
`phone companies with installations, repairs, maintenance, customer
`contacts, engineering, and measurements required for customer
`services.
`
`Business Marketing provided leadership and support for Bell System
`business marketing efforts.
`
`Business Services combined under common management all the
`closely related delivery functions that flow from marketing and
`sales.
`
`7
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 10
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`

`
`CHAIRMAN
`AND CHIEF
`EXECUTIVE
`OFFICER
`
`PRESIDENT
`AND CHIEF
`OPERATING
`OFFICER
`
`I
`- BUSINESS
`
`--, - RESIDENCE
`
`,.---
`-
`
`ASSISTANT
`TO THE
`PRESIDENT
`
`I
`
`NETWORK
`
`-
`
`-
`
`BUSINESS
`MARKETING
`
`....
`
`RESIDENCE
`MARKETING
`SALES AND
`SERVICE
`
`NETWORK
`
`- PLANNING
`
`AND
`DESIGN
`
`BUSINESS
`SERVICES
`
`L. __
`~ STAFF
`
`~-.I - NETWORK
`
`SERVICES
`
`DIRECTORY
`
`- AND PUBLIC
`
`SERVICES
`
`- DEPARTMENT
`
`LONG LINES
`
`- SYSTEMS
`
`INFORMATION
`
`Figure 1-3. Corporate structure of AT&T (1982).
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 11
`
`

`
`Chap. 1
`
`Structure and Activities
`
`9
`
`· Residence organizations coordinated the response of the Bell System
`to the needs of residential customers for telecommunications products
`and services.
`
`Residence Marketing Sales and Service offered telephone companies
`help in marketing, pricing, costing, forecasting, training, and
`budget matters related to serving residence customers. It also sup(cid:173)
`ported telephone companies with installations, repairs, mainte(cid:173)
`nance, customer contacts, engineering, and measurements required
`for customer service.
`
`In addition, for organizational purposes, several other units reported
`to the executive vice-president-residence.
`
`Staff supplied support services within AT&T itself and coordinated
`support services such as inventory management, automotive opera(cid:173)
`tions, building planning, real-estate management, energy conserva(cid:173)
`tion, and environmental protection offered by other Bell System
`companies.
`
`The Directory organization assisted telephone companies with
`marketing, costing, pricing, forecasting,
`training, and budget
`matters for both white pages and Yellow Pages as well as with
`producing and distributing directories.
`
`Public services coordinated Bell System activities involved in provid(cid:173)
`ing communications services for users who are away from home or
`office. Public services comprised public and semipublic telephone
`service, including Charge-a-Call and DIAL-Irs network communica(cid:173)
`tions services such as Public Announcement Service and Media
`Stimulated Calling (see Section 2.5.1).
`
`Information Systems provided planning, design, and development of
`functional accounting and information systems for use by the
`operating companies.
`
`• Network organizations supported the business, residence, directory,
`and public-service markets by guiding and coordinating the operation
`of the network and the activities that provide telecommunications ser(cid:173)
`vices between customers' locations.
`
`Network Planning and Design oversaw the provision of reliable and
`innovative interpremises communications services, ensured that
`existing Bell System services were continually improved, coordi(cid:173)
`nated the development of the national and international network,
`guided the efforts of Bell Laboratories in the area of interpremises
`
`5 Service mark of AT&T Co.
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 12
`
`

`
`10
`
`Introduction to the Bell System
`
`Part 1
`
`services, guided the technical planning of the operating companies,
`and maintained technical liaison with both independent telephone
`companies and international and other domestic carriers.
`
`Network Services provided methods and guidance to operating tele(cid:173)
`phone company network organizations. Supported functions
`included the administration and maintenance of network switching
`systems and transmission facilities; operator services; and the
`engineering, construction, maintenance, and administration of dis(cid:173)
`tribution facilities and services.
`
`The Long Lines Department was included in the network segment.
`This integration made it easier to combine the planning, design,
`and management of the interstate network with the intrastate net(cid:173)
`works for improved overall network service.
`
`Subsidiary Companies
`
`AT&T owned several subsidiary companies that supported Bell System
`operations or provided domestic and international services. The primary
`subsidiaries were:
`
`• 195 Broadway Corporation, which provided real-estate management
`services for AT&T corporate locations. These services included con(cid:173)
`structing, owning, and leasing buildings; administering office space,
`facilities, and equipment; and providing related building and house(cid:173)
`keeping support services such as transportation, maintenance, and
`cafeterias for corporate buildings.
`
`• AT&T International Inc., which was formed in August 1980 to sell
`Bell System products worldwide and apply Bell System technology,
`products, and experience to the needs of telephone administrations
`overseas and international business customers. It also provides techni(cid:173)
`cal and advisory services and directory and informations systems.
`
`• American Bell Inc., which was formed in June 1982 in response to
`Computer Inquiry II (see Section 17.4.3). As a "separate" subsidiary,
`American Bell could sell its products and services to customers
`without government approval and had certain limitations in the way
`it dealt with other Bell System companies.
`
`• Advanced Mobile Phone Service, Inc., which was responsible for
`planning and developing a nationwide cellular radio system to pro(cid:173)
`vide communications from moving customers to the land-line telecom(cid:173)
`munications system. Section 11.4.1 discusses cellular radio.
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 13
`
`

`
`Chap. 1
`
`Structure and Activities
`
`11
`
`1.2.2 BELL OPERATING COMPANIES
`
`Before divestiture, the Bell operating companies built, operated, and
`maintained the local and intrastate networks and provided most of the
`day-to-day service for customers
`in
`their
`individual communities.
`Chapter 13 discusses the many functional activities performed by the
`operating companies. Long-distance calls also traveled over individual
`company facilities, but those that went from the territory of one company
`to that of another were carried by Long Lines or another common carrier.
`(Figure 1-4 shows the Bell operating companies as they existed in 1982
`and the territories they served.) The operating companies also joined
`with Long Lines to furnish certain interstate services such as carrying
`radio and
`television network programs
`to broadcasting stations
`throughout the country. They also cooperated with the hundreds of
`independent telephone companies so that the public had access to a
`unified national telephone network.
`The operating companies differed from one another in size and
`organization. Geographically, the smallest was that part of the Chesa(cid:173)
`peake and Potomac Telephone Companies that offered service in the 61
`square miles of the District of Columbia. The largest was the Mountain
`States Telephone and Telegraph Company, which operated in seven states
`and had a service area of more than 300,000 square miles.
`The difference in size was one reason for differences in organization.
`For example, a function that might have been centralized in a single-state
`company might have had separate organizations for each state in a multi(cid:173)
`state company. There were other reasons for differences as well. For
`example, the operating problems and priorities of rural areas differ from
`those of urban areas. Traditionally, each company worked out opera(cid:173)
`tional methods most suited to its own needs, within guidelines and stan(cid:173)
`dards provided by AT&T.
`As sole or part owner of the operating companies, AT&T derived a
`large portion of its earnings from those companies. The relationship
`between AT&T and an operating company was traditionally governed by
`an agreement called the license contract (which terminated with divesti(cid:173)
`ture). Each license contract described the reciprocal services, licenses,'
`and privileges that existed between the parties. The operating company
`was charged a fee for the services supplied by the AT&T General Depart(cid:173)
`ments. The fee was based on services the company received, but it could
`not exceed 2.5 percent of the company's annual revenues. The licensed
`company agreed to certain policies and procedures defined by the parent
`company.
`The term license contract goes back to the early days of the business
`when local companies were first licensed to use Bell telephones. For
`many years, the contract guaranteed that the operating companies would
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 14
`
`

`
`---
`
`\
`' ... " r- - __
`
`I
`- -J
`
`" I
`l _,_ ---
`,
`
`MOUNTAIN BELL
`I
`I
`
`---.L.. ,---
`, ,
`I ,
`
`I
`I
`
`---,--"
`-'--
`,
`
`\
`
`\
`-----t
`NORTHWESTERN BELL
`____
`,L ___ _
`
`~-", ,
`
`\.
`I
`I
`
`I --, ,.-----7
`
`•
`I
`SOUTHWESTERN BELL
`......
`
`MICHIGAN BELL
`
`NEW ENGLAND
`TELEPHONE
`
`SOUTHERN
`NEW ENGLAND
`- TELEPHONE
`
`NEW JERSEY BELL
`
`DIAMOND STATE
`TELEPHONE
`
`C&P TELEPHONE (VA.)
`
`CINCINNATI BELL
`
`Figure 1-4. Bell operating companies and their territories (1982).
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 15
`
`

`
`Chap. 1
`
`Structure and Activities
`
`13
`
`benefit from research, financing, engineering, and other important ser(cid:173)
`vices offered by the parent company. It assured the manufacture of tele(cid:173)
`phones and other devices and apparatus needed by the licensees for their
`business. AT&T accomplished this through Western Electric.
`
`Corporate Structure
`
`As with AT&T, the'original organizational structure of the operating com(cid:173)
`panies was defined by the jobs that needed to be done. This functional
`organization, shown in Figure 1-5,6 later evolved into a network orienta(cid:173)
`tion. Still later, marketing became the driving force in shaping the Bell
`System and its operations. When AT&T reorganized around market seg(cid:173)
`ments, it recommended that the operating companies do the same by
`
`EXECUTIVE
`
`PLANT
`DEPARTMENT
`
`I
`
`TRAFFIC
`DEPARTMENT
`
`OPERATORS
`
`TEST & MAINTENANCE
`
`TRAFFIC ADMINISTRATORS
`
`INSTALLERS
`
`TRAFFIC ENGINEERING
`
`OUTSIDE CONSTRUCTION
`
`MESSAGE TRUNK
`FORECASTING
`
`ASSIGNMENT
`
`I
`
`ENGINEERING
`DEPARTMENT
`
`FACILITIES ENGINEERING
`
`TERMINAL & SWITCHING
`EQUIPMENT ENGINEERING
`
`LONG-RANGE PLANNING
`
`COMMERCIAL
`DEPARTMENT
`
`CUSTOMER INTERFACE(cid:173)
`BASIC SERVICE
`
`MARKETING
`DEPARTMENT
`
`CUSTOMER INTERFACE(cid:173)
`SPECIAL SERVICES
`
`SPECIAL SERVICES
`FORECASTING
`
`Figure 1-5_ Traditional functional organization
`of the Bell operating companies.
`
`6 Chapter 13 describes functional activities such as those shown in Figure 1-5.
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 16
`
`

`
`14
`
`Introduction to the Bell System
`
`Part 1
`
`forming business, residence, directory, public service, and network
`organizations.
`The business, residence, directory, and public services organizations
`were to be responsible for marketing, sales, and delivery of products
`directly to customers. The network organization was to provide services
`between customer locations. It did the planning and engineering, pro(cid:173)
`vided the facilities and equipment, and operated the network. This re(cid:173)
`structuring of traditional lines of managerial authority did not reflect a
`difference in overall goals, however. Rather, it was done to keep pace
`with the emerging technological, business, and regulatory environment.
`
`1.2.3 WESTERN ELECTRIC
`
`Western Electric, with headquarters at 222 Broadway in New York City,7
`was the manufacturing and supply unit of the Bell System. In 1982, with
`about $12.6 billion in sales, Western Electric ranked 22nd on Fortune
`magazine'S list of the nation's 500 largest industrial corporations. The
`company's almost 150,000 employees worked in nearly every state.
`Before divestiture, Western Electric made a variety of customer(cid:173)
`premises equipment, including millions of telephones each year. It also
`manufactured much of the other equipment that made up the telephone
`network. These products were designed by Bell Laboratories, manufac(cid:173)
`tured by one of Western Electric's manufacturing divisions, and distri(cid:173)
`buted to the telephone companies by Western Electric's Bell Sales divi(cid:173)
`sion. Table 1-1 lists Western Electric's manufacturing divisions and their
`locations. Figure 1-6 shows the twenty-two manufacturing plants. The
`structure of Western Electric included a number of divisions responsible
`for major functional areas.
`The Corporate Engineering Division coordinated the work of the
`manufacturing divisions to ensure that the products were compatible
`with the network. The· division also provided research and development
`support for all Western Electric's engineering activities
`including
`manufacturing, equipment engineering, distribution, installation, and
`repair of products. In addition, it coordin(ited the company's quality
`assurance program, which required that inspectors check products to
`ensure that they met Bell Laboratories standards. Engineering also
`assisted in planning for the acquisition, leasing, and development of com(cid:173)
`pany facilities. It evaluated and verified company-wide cost reductions
`and monitored energy use at all company locations.
`Western Electric's Engineering Research Center near Princeton, New
`Jersey, developed and improved manufacturing processes. Examples of
`
`7 In October 1983, plans were announced for the sale of 222 Broadway and the
`establishment of a new headquarters facility in Berkeley Heights, New Jersey.
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 17
`
`

`
`Chap. 1
`
`Structure and Activities
`
`15
`
`innovations that emerged from the Research Center include industrial
`applications of the laser and a technique for sensing minute abnormali(cid:173)
`ties in ceramics.
`
`TABLE 1-1
`
`WESTERN ELECTRIC MANUFACTURING (1982)
`
`Products by
`Manufacturing Division
`
`Locations
`
`Cable and Wire Products
`
`Electronic Components
`
`Business and Residence
`Products
`
`Switching EqUipment
`
`Transmission Equipment
`
`Atlanta Works
`(Norcross, GA)
`Baltimore Works
`Omaha Works
`Phoenix Works
`
`Allentown Works
`Kansas City Works
`(Lee's Summit, MO)
`Reading Works
`New River Valley Plant
`(Fairlawn, VA)
`
`Denver Works
`Indianapolis Works
`Kearney Works
`Montgomery Works
`(Aurora, IL)
`Shreveport Works
`
`Columbus Works
`Dallas Works
`(Mesquite, TX)
`Hawthorne Works
`(Chicago)
`Lisle Plant
`(Lisle, IL)
`Oklahoma City Works
`
`Merrimack Valley Works
`(North Andover, MA)
`North Carolina Works
`(Winston-Salem)
`Burlington Works
`Richmond Works
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 18
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`

`
`16
`
`Introduction to the Bell System
`
`Part 1
`
`The Network Systems and Produ~t Planning Division ensured that
`products from the different manufacturing divisions were compatible
`with the network and met the needs of customers.
`The principal points of contact between Western Electric and its Bell
`System customers were the Material and Account Management Division
`and two Bell Sales divisions. These organizations were responsible for
`the delivery of products and services to the customer. To facilitate this,
`seven Bell Sales regions were established (see Figure 1-6). Regional
`account management teams assisted operating companies in planning
`applications for Western Electric products and services and helped
`Western Electric
`identify emerging
`telephone company needs and
`develop marketing strategies to meet those needs.
`
`• The Material and Account Management Division developed plans
`. and support for the regional account management teams. It also fore(cid:173)
`cast the demand for products, placed orders with the factories, and
`controlled stock supplies in all seven regions. The division estab(cid:173)
`lished prices and administered the standard supply contracts (see below).
`It prepared brochures, handbooks, and customer instruction booklets
`on products.
`
`• Two Bell Sales Divisions (East and West) provided regional account
`management. Their responsibilities also included systems equipment
`engineering, installation and repair of switching and transmission
`equipment, warehousing, and distribution for the Bell System. Sys(cid:173)
`tems equipment engineers tailored complicated Western Electric
`equipment to the exact needs of the customer and ensured its compati(cid:173)
`bility with existing equipment. The Bell Sales divisions operated a
`distribution network consisting of material management centers (huge
`warehouses) in each of the seven regions; thirty-one smaller service
`centers, which usually combined stocks of the most frequently needed
`items and repair facilities; and strategically located local distribution
`centers (see Figure 1-6).
`
`Through its Purchasing and Transportation Division, Western Elec(cid:173)
`tric coordinated the purchase of over $4.5 billion in supplies and services
`from other manufacturers both for its own m,anufacturing needs and for
`resale to Bell System companies. Western Electric used more than 47,000
`suppliers and transportation carriers and delivered raw materials, parts,
`and finished products to more than 100 company locations and to Bell
`customers around the country. Purchases included telecommunications
`equipment, computers, power equipment, telephone booths, telephone
`poles, office machines, maintenance items, and stationery supplies. An
`important part of this work, the engineering and inspection of purchased
`products to ensure their compatibility and quality, was the responsibility
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 19
`
`

`
`l
`PACIFIC !,EGION
`
`o SUNS~.WHITNEY
`* LlVERMO~
`\
`
`o GENERAL HEADQUARTERS
`~ SOUTHGATE OFFICE BUILDING
`
`OPERATING VICE PRESIDENTS
`e GUILFORD CENTER
`CORPORATE ADMINISTRATION
`GOVERNMENT a COMMERCIAL SALES
`0 RE'310NAL HEADQUARTERS
`m MANUFACTURING LOCATIONS
`0 MATERIAL MANAGEMENT CENTERS
`
`~ SERVICE CENTERS
`
`• DISTRIBUTION CENTERS
`I:l PURCHASED PRODUCTS ENGINEERING AND INSPECTION
`e
`INSTALLATION AREA OFFICES
`<> ENGINEERING RESEARCH CENTER
`CORPORATE EDUCATION CENTER
`
`•
`
`BELL SALES DIVISION TRAINING CENTER
`
`... NETWORK SOFTWARE CENTER
`
`* SUBSIDIARIES
`
`!
`
`SOUTHW;~'teRN~EGION
`
`DALLAS eljl
`MESQUITI! m
`
`•
`
`,
`SHREVEP~T
`
`i
`JACK SO,
`MONTGOMERY 0
`t
`t
`
`Figure 1-6. Western Electric's principal locations and regions (1982).
`
`CISCO SYSTEMS, INC. Ex. 1012 Page 20
`
`

`
`CISCO SYSTEMS, INC. Ex. 1012 Page 21
`
`

`
`Chap. 1
`
`Structure and Activities
`
`19
`
`of Purchased Products Engineering and Purchased Products Inspection,
`which were located in Springfield, New Jersey.
`Western Electric's responsibilities in this area were defined by the
`standard supply contract, an agreement it had with the Bell operating com(cid:173)
`panies. The supply contract, which terminated at divestiture, required
`Western Electric either to manufacture or to purchase materials that the
`operating companies might reasonably require, which they then might
`order from "Western Electric. However, the supply contract did not obli(cid:173)
`gate the operating companies to purchase these materials from Western
`Electric. They were free to buy from anyone.
`The Government and Commercial Sales Division was responsible for
`the sale of Western Electric products and services to the United States
`government and other non-Bell System customers.
`In addition to its role as the Bell System manufacturing and supply
`unit, Western Electric responded to the government's needs for both
`specific design projects and telecommunications systems. During World
`War II, Western Electric provided communications and radar equipment
`to the armed forces. After the war, the company did pioneering work in
`early-warning defense systems such as the Distant Early Warning (DEW)
`Line, extending from Iceland to the Aleutians. Later, Western Electric
`and Bell Laboratories developed
`the Nike-Ajax and Nike-Hercules
`ground-to-air missile defense systems. More recently, in the early 1970s,
`Western Electric was prime contractor for the Safeguard antiballistic mis(cid:173)
`sile system.
`Western Electric has been a major technological contributor to the
`space program. The company provided the tracking and communications
`system for the United States' first manned space flight, Project Mercury,
`and headed the industrial team that designed and built tracking and com(cid:173)
`munications systems for the Gemini and Apollo programs. Bellcomm, a
`subsidiary of Western Electric, was formed to carry out the systems
`engineering work on these programs under contract to the National
`Aeronautics and Space Administration. The United States Air Force and
`the National Aeronautics and Space Administration use a Western Electric
`command guidance system and missile-borne guidance equipment to sup(cid:173)
`port satellite launches.8
`Western Electric has also provided complete telecommunications facili(cid:173)
`ties for various government agencies both in the United States and at
`military bases and embassies abroad. Western Electric recently modified
`the Nike-Hercules air defense system for the N