Chapter 1
Data Communications: Emergence 1956-1968
Modems and Multiplexers

1.11  In Perspective

The pre-conditions to the birth of computer communications were inauspicious. They consisted of a guarded AT&T, a handful of military contractors innovating modems, a few firms innovating FDMs, and an FCC seemingly satisfied with the course of events. Few would anticipate the wrenching changes following IBM’s introduction of the System/360 and the commercialization of time-sharing. The popularized vision of the Computer Utility captured the future of computing and highlighted the need computers had for access to and use of the telephone network. Decades of regulatory policy and AT&T intransigence could not stem the tides of technological change set in motion by computers.

1968 ended with real competition emerging in data communications. Milgo and Codex had innovated high-speed modems, revealing AT&T’s lack of commitment to advancing modem technology and products. A bullish stock market rewarded both company’s efforts and potential futures as they launched successful initial public offerings. American Data Systems would introduce the second-generation multiplexer, a TDM, and win a major contract from IBM. The imaginations and hopes of other entrepreneurs would be unleashed by the success of Milgo and Codex. Newly emerging venture capitalists awaited eagerly to invest in their dreams and soon new companies would be born,

Yet even as the future of data communications seemed to be successfully unfolding, a small network of computer scientists, supported by the same IPTO office of ARPA that had funded time-sharing, began questioning whether computer networks really could be built of modems and multiplexers. The results of that questioning and the revolution leading to a radical paradigm shift comes next.