The first commercial cellular radio system
In January, 1969 the Bell System made commercial cellular radio operational by employing frequency reuse for the first time. Aboard a train. Using payphones. Small zone frequency reuse, as I've said many times before, is the principle defining cellular and this system had it. (Some say handoffs or handovers also define cellular, which they do in part, but MTS and IMTS could use handovers as well; only frequency reuse within a local network is unique to cellular.) "[D]elighted passengers" on Metroliner trains running between New York City and Washington, D.C. "found they could conveniently make telephone calls while racing along at better than 100 miles an hour."[Paul] Six channels in the 450 MHz band were used again and again in nine zones along the 225 mile route. A computerized control center in Philadelphia managed the system." Thus, the first cell phone was a payphone! As Paul put it in the Laboratories' article, ". . .[T]he system is unique. It is the first practical integrated system to use the radio-zone concept within the Bell System in order to achieve optimum use of a limited number of radio-frequency channels."
For a great, personal account of this, please click here. (internal link) John Winward remembers his work on the Metroliner
If you want another explanation of frequency reuse and how this concept differs cellular telephony from conventional mobile telephone service, click here to read a description (internal link) by Amos Joel Jr., writing taken from the original cellular telephone patent.

The brilliant Amos E. Joel Jr., the greatest figure in American switching since Almon Strowger. Pictured here in a Bell Labs photo from 1960, posing before his assembler-computer patent, the largest patent issued up to that date. In 1993 Joel was awarded The National Medal of Technology, "For his vision, inventiveness and perseverance in introducing technological advances in telecommunications, particularly in switching, that have had a major impact on the evolution of the telecommunications industry in the U.S. and worldwide."
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Resources:
Resources
Douglas, V.A. "The MJ Mobile Radio Telephone System." Bell Laboratories Record December, 1964: 383
Paul, C.E. "Telephones Aboard the 'Metroliner'." Bell Laboratories Record March, 1969: 77
[SRI2] David Roessner, Robert Carr, Irwin Feller, Michael McGeary, and Nils Newman, "The Role of NSF's Support of Engineering in Enabling Technological Innovation: Phase II Final report to the National Science Foundation. Arlington, VA: SRI International, 1998.
http://www.sri.com/policy/stp/techin2/chp4.html (external link, now dead)