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The history of the PSTN is mostly the history of American Bell and AT&T. Here is a very brief timeline:

• 1875
  • Alexander Bell forms American Bell
• 1876
  • Patent #174,465 - "IMPROVEMENT IN TELEGRAPHY" - Alexander Graham Bell's Telephone
• 1878
  • First telephone exchange is built in New Haven, Connecticut.
  • First switchboard (and switchboard operator) in New Haven, CT.
  • The first telephone in the White House is installed.
• 1882
  • American Bell aquires controlling interest in Western Electric power company.
  • Western Electric Company becomes the manufacturing arm of American Bell
• 1884
  • AT&T is incorporated as a subsidiary of American Bell
  • Bell Telephone creates the first long distance connection from Boston to New York City
• 1891
  • Almon Strowger receives patent for his automated electromechanical call switching device
    "No longer will my competitor steal all my business just because his wife is a BELL operator."
• 1899
  • AT&T buys out American Bell assets.
  • Cleyson Brown founds Bell System competitor Brown Telephone (eventually becomes Sprint)
• 1949
  • U.S. Anti-Trust Lawsuit against AT&T
• 1956
  • Final Judgement rendered by U.S. Department of Justice; AT&T signs Consent Decree
    • AT&T was not allowed to enter computer and information services business
    • AT&T was permitted to keep their manufacturing arm, Western Electric, as a subsidiary
    • AT&T Long Distance was a Long Distance Telecommunications
    • The Bell Companies were from AT&T
    • Bell Labs is separated as Telecommunication Research
  • AT&T lays Trans-Atlantic Telephone cable TAT-1 across the Atlantic.
• 1968
  • Microwave Communications of America is incorporated (MCI)
• 1971
  • MCI receives Government approval to compete with AT&T in the long distance market.
• 1974 - D.o.J. files Anti-Trust Lawsuit
• 1978 - Execunet II
  • Execunet II Decision
  • Southern Pacific Communications Company (subsidary of Southern Pacific Railroad) becomes Sprint.
• 1982 - Modified Final Judgement -
  • The FCC allows AT&T to get into the computer and information systems business, provided:
    • AT&T leaves the local-exchange market
    • Divests itself of all Bell Telephone assets except phone system manufacturing facilities
    • Converts the 22 separate Bell Operating Carriers into 7 Regional Bell Operating Carriers (RBOC)
      • Ameritech
      • Bell Atlantic
      • BellSouth Corporation
      • NYNEX
      • Pacific Telesis Group
      • Southwestern Bell Corporation
      • US West
        
    • The RBOCs are barred from competing in the long distance market
  • Southern Pacific Communications/Sprint merges with GTE
• 1983
  • LDDS (Long Distance Discount Services) begins operation (becomes WorldCom)
  • MCI goes International
• 1986
  • US Telecom and Sprint merge (US Sprint )
• 1987
  • Sprint completes deployment of all fiber-optic network
• 1996 - Telecommunications Act
  • Removes most of the protections against competition--all carriers are allowed to compete in all markets, provided they prove they are cooperating with other carriers.
  • Qwest Startup
• 1998 - MCI/Worldcom Merger
• 2001 - Qwest fined for 'slamming' ($1.5 million)
• 2002 - MCI/Worldcom files for bankruptcy (Chapter 11)
• 2005 - Sprint/Nextel Merger approved

The history of the Public Switched Telephone Network is a history of monopoly, regulation, anti-trust, deregulation, patents and right-of-way issues. Mergers permitted by the deregulation in 1996 have produced large regional carriers with near-monopolistic control over certain markets. Here is where the regional 'Baby Bells' ended up. Here, the Baby Bells are listed by their parent company, post merger and their relative size:

• (AT&T) Pacific Telesis Group
• (AT&T) Southwestern Bell Corporation
• BellSouth Corporation
• (Verizon) Ameritech
• Bell Atlantic (changed its name to Verizon)
• (Verizon) NYNEX
• (Qwest) US West