The Telephone Revolution

The dissolution of American Telephone and Telegraph is bringing changes to our phone service.

| March/April 1984

The liberation of the telephone began back in 1968, when the Federal Communications Commission's landmark "Carterfone Decision" first allowed user-owned equipment to be connected to Ma Bell's system. During the 70's, tying into those formerly sacrosanct lines became a sort of "interconnection movement", and new telephone hardware proliferated. Then early this year, evolution turned to revolution when AT&T (the world's largest and richest corporate monopoly) was legally dismembered.

Americans are now dealing with a new and mostly unfamiliar communication environment. Some users will gain and others will lose, and you can best guard your bankroll by understanding the new system. One way to do that is to learn how to connect your own phones (as shown in How to Install a Phone Line). Another is to be up-to-date on the possibilities that the new arrangement offers.

The best overview of the situation I've found is a new 190-page book by Larry Kahaner and Alan Green, entitled Phone Book: The Most Complete Guide to the Changing World of Telephones. Larry and Alan offer a brief historical review of the legal battles against AT&T, take a quick peek at the dismantled Bell System of today, provide details on the opportunities for cut-rate long-distance service, and suggest innovative uses for the new system.

One of the major effects of the new law concerns long-distance calling. Your area phone company is continuing to handle your local calls, and some are still billing you for long-distance service. But you are no longer forced—automatically—to buy your long-distance calls from AT&T. Over 200 firms now offer some form of extended-range phone service, in direct competition with AT&T. Your local phone company is required to provide a connection for these upstarts, and if the area firm does billing for AT&T, it must also provide that service for competitors.

Some of the new long-distance companies have their own microwave networks, while others lease the use of facilities at wholesale rates and resell the service. Phone Book talks a bit about each of the major companies (MCI, ITT, Sprint, Western Union, and Satellite Business System), and 24 of them are listed in the "Yellow Pages" section at the back of the volume. Larry and Alan point out that it takes careful comparison shopping to figure out which of them offers the best deal for you.

The book also discusses the negative side of the new law: the effect on local rates. Back when AT&T and the local Bell companies were tied together, part of the payment for long-distance calls helped to subsidize the cost of local service. The long-distance access charge will be phased out over the next few years, and local rates will be adjusted upward to compensate.

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