The Telegraph Act of 1868 gave Her Majesty's Postmaster General the right to acquire and operate the inland telegraph systems in the UK, which had been installed and operated by independent telegraph and railway companies. The Telegraph Act of 1869 further conferred on the Postmaster-General a monopoly in telegraphic communication in the UK and, on 28 January 1870, the previously privately owned telegraph system was transferred to the State.
In 1878, the Post Office provided its first telephones, on rental terms to a firm in Manchester and, on 20 December 1880, a court judgement was issued in favour of the Post Office in a landmark legal action which laid down that a telephone was a telegraph, and a telephone conversation a telegram, within the meaning of the 1869 Telegraph Act. Independent telephone companies were thereupon obliged to obtain 31-year licences to operate from the Postmaster-General. As a result of this court judgment, the Postmaster-General was to continue providing the telephone service under the provisions of the various telegraph acts until 1951, when the first telephone act was passed.
On 4 April 1896, the Post Office took over the trunk network of the National Telephone Company (the largest of the private telephone service providers) and, in 1905, the Post Office agreed with the National Telephone Company that the company's undertakings would be transferred to the State in 1912. Consequently, on 1 January 1912, the Postmaster General took over the system of the National Telephone Company and soon became the monopoly supplier of telephone services in the UK, with the exception of the municipal service in Kingston-upon-Hull.
The Post Office also became involved in wireless and early broadcasting services: in 1904 the Wireless Telegraphy Act was passed, which conferred licensing powers on the Postmaster General. The 1949 Wireless Telegraphy Act vested responsibility and the necessary statutory powers with respect to regulating the use of radio frequencies in the Postmaster General.
In 1969, this responsibility was transferred to the new Ministry of Posts and Telecommunications. The General Post Office ceased to be a government department in 1969 and, under the provisions of the Post Office Act 1969, the Corporation was split into two divisions - Posts and Telecommunications - which thus became distinct businesses for the first time.
The Post Office ceased to be a Government Department on 1 October 1969 and was established as a public corporation under the Post Office Act of that year. The idea of converting the Post Office into a nationalised industry had first been raised as early as 1932 when a publication by Lord Wolmer entitled "Post Office Reform" made reference to the subject. A committee under the chairmanship of Lord Bridgeman was set up in 1932 to investigate criticisms that the Post Office, as a large scale commercial undertaking should be run along the lines of a business concern rather than an ordinary government department.
In the event it was not until 1965 that the process was put in motion whereby the Post Office was changed to a public corporation. The Post Office Act, 1969, laid down the structure of the new organisation, the Corporation being split into two divisions - Posts and Telecommunications - which became distinct businesses for the first time. Under the Act, the Post Office had the exclusive privilege of running telecommunications systems with limited powers to authorise others to run such systems.
In 1977, the Carter Committee, in one of a series of reports commissioned by the Government on public corporations, recommended a further separation of the postal and telecommunications services of the Post Office, and for their relocation under two individual corporations. The findings in this report led to the creation of the British Telecommunications Act, 1981, and the creation of British Telecom as a public corporation in its own right. Although it remained part of the Post Office until 1981, in 1980 the telecommunications business of the Post Office was given the distinguishing name of British Telecom.
On 1 October 1981, British Telecommunications, trading as British Telecom, finally severed its links with the Post Office and became a totally separate public corporation under the provisions of the British Telecommunications Act, 1981.
It was also at this time that the first steps were taken to introduce competition into the United Kingdom telecommunications industry: British Telecom lost its monopoly of the supply of customer premises equipment and the Secretary of State for Trade and Industry was empowered to grant licences to operators other than British Telecom to provide network and value added services. In 1982, Mercury Communications Ltd was licensed as the main competitor to British Telecom and, on 19 July 1982, the Government formally announced its intention to sell up to 50.2% of British Telecom to the public: the first example of the privatisation of a public utility. The transfer to British Telecommunications plc from British Telecom as a statutory corporation of its business, its property, its rights and liabilities took place on 6 August 1984.
