A: New Haven, Connecticut, United States
In January 1878 the first regular telephone exchange was set up in New Haven, Connecticut.
"The switchboard was built from 'carriage bolts, handles from teapot lids and bustle wire' and could handle two simultaneous conversations" (Wikipedia article on telephone exchange, accessed 04-22-2009).
Prior to this the first experimental telephone exchange was based on the ideas of Puskás, and it was built by the Bell Telephone Company in Boston in 1877