Go here for full history:
http://www.bell-labs.com/history/unix/

Here is a snippet:

In 1976-77, Ken Thompson took a six-month sabbatical from Bell Labs to
teach as a visiting professor at the Computer Science Department at the
University of California-Berkeley (UCB). What he taught, of course, was
the UNIX system. While there, he also developed much of what eventually
became Version 6.

The system was an instant hit, and the word spread quickly throughout
the academic community.

When Thompson returned to Bell Labs, students and professors at
Berkeley continued to enhance UNIX. Eventually, many of these
enhancements were incorporated into what became known as Berkeley
Software Distribution (BSD) Version 4.2, which many other universities
also bought.

UNIX had been distributed via academic licenses, which were relatively
inexpensive, and government and commercial licenses from about 1975.
UCB became important in spreading the word about UNIX when it
established a Computer Systems Research Group (CSRG), originally under
the direction of Robert Fabry. The CSRG obtained a grant from DARPA to
support a version of UNIX for DARPA contractors, which were mostly
academic and military organizations, and some commercial firms. Ritchie
recalled, "The contractors got the UNIX licenses from Bell Labs, but
they got the BSD software from Berkeley." ...

<snip>

...As UNIX spread throughout the academic world, businesses eventually
became aware of UNIX from their newly hired programmers who had used it
in college.

Soon a new business opportunity developed -- writing programs to run on
UNIX for commercial use. What made UNIX popular for business
applications was its timesharing, multitasking capability, permitting
many people to use the mini- or mainframe; its portability across
different vendor's machines; and its e-mail capability.

In 1984, AT&T divested itself of its local Bell telephone companies,
and also created an independent subsidiary, AT&T Computer Systems. The
creation of the subsidiary enabled the communications giant to enter
the computer business. The new subsidiary marketed a number of computer
products, including the UNIX operating system. Its software flagship
was System 5, which ran on AT&T's 3B series of computers.
...

Hope this helps
Peter

--- Mark Phillips <phillips@usa.net> wrote:
> I thought UNIX was first developed at UC Berkley, and then moved to
> AT&T??
> 
> Mark
> 
> -----Original Message-----
> From: plug-discuss-admin@lists.plug.phoenix.az.us
> [mailto:plug-discuss-admin@lists.plug.phoenix.az.us]On Behalf Of Jim
> Sent: Thursday, March 07, 2002 9:45 AM
> To: plug-discuss@lists.plug.phoenix.az.us
> Subject: History question
> 
> 
> -----BEGIN PGP SIGNED MESSAGE-----
> Hash: SHA1
> 
> I know that Unix was developed by AT&T in the early '70s.  My
> question is
> why
> was Unix originally free?  Certainly AT&T knew the value of the
> product that
> they were creating.  Any helpful links lurking out there in the minds
> of
> PLUG
> members?
> - --
> Jim
> 
> Freedom is worth preserving
> -----BEGIN PGP SIGNATURE-----
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> SnSvKgaNGIm06WXelSGUcXtL
> =cnQf
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