The grandparent thought this was implausible, researched it as an outsider (with a slight bias towards thinking the claim is false, which is not a problem per se) and still didn't find any refutation. While I applaud the impetus behind the research, I'm more inclined to believe the apocryphal story after reading the attempt to refute it; not every piece of gossip will be supported by a written statement.

while, rationally speaking, a diligent search for evidence regarding a story that comes up finding no evidence for it, and weak evidence against it, ought to make us less inclined to believe the story, people don't always work that way. this is a well-documented cognitive error, commonly called the 'backfire effect', though it doesn't always manifest

i wasn't attempting to refute the story. i was attempting to find out the truth, and i find your summary of that search as 'attempting to refute the apocryphal story' somewhat offensive

my summary of what i found is that the assignment of ^g to the bell control code happened before gordon bell was well-known, on a continent where he did not live, in the deliberations of a standards body he had no involvement with, revising a proposal from a company that competed with his company, before the construction of any software or hardware that used key-chords such as control+g to produce control codes

under these circumstances it is not impossible that one of bell's colleagues from dec made the proposal, or at least was motivated to advocate it by knowing him¹, but given that i couldn't turn up any involvement of dec or mit people in the standards process at all, much less in the delegation the usa sent to europe for the meeting where the change was made, it seems pretty unlikely

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¹ and predicting the invention of the control key, and that the proposal to start the alphabet at codepoint 64 instead of 65 would fail; but both of these seem to have been fairly predictable