(((kadrey remarks: I stumbled on the AT&T Research Lab site and found some interesting short pieces.)))
"In 1918 H. Nyquist began investigating ways to adapt telephone circuits for picture transmission. By 1924 this research bore fruit in 'telephotography'== AT&T's fax machine.
"The principles used in 1924 were the same as those used today, though the technology was comparatively crude. A photographic transparency was mounted on a spinning drum and scanned. This data, transformed into electrical signals that were proportional in intensity to the shades and tones of the image, were transmitted over phone lines and deposited onto a similarly spinning sheet of photographic negative film, which was then developed in a darkroom. The first fax images were 5x7 photographs sent to Manhattan from Chicago and Cleveland and took seven minutes each to transmit."
PicturephoneSource(s): AT&T Labs Research site; http://akpublic.research.att.com/history/70picture.html
"The first Picturephone test system, built in 1956, was crude == it transmitted an image only once every two seconds. But by 1964 a complete experimental system, the 'Mod 1,' had been developed. To test it, the public was invited to place calls between special exhibits at Disneyland and the New York World's Fair. In both locations, visitors were carefully interviewed afterward by a market research agency.
"People, it turned out, didn't like Picturephone. The equipment was too bulky, the controls too unfriendly, and the picture too small. But the Bell System was convinced that Picturephone was viable. Trials went on for six more years. In 1970, commercial Picturephone service debuted in downtown Pittsburgh and AT&T executives confidently predicted that a million Picturephone sets would be in use by 1980.
"What happened? Despite its improvements, Picturephone was still big, expensive, and uncomfortably intrusive. It was only two decades later, with improvements in speed, resolution, miniaturization, and the incorporation of Picturephone into another piece of desktop equipment, the computer, that the promise of a personal video communication system was realized." Richard Kadrey (email@example.com)