Re: Skipping the announcement (was Re: Pop song) [telecom]

When my siblings and I were growing up in suburban Boston in the

1950's, we had measured phone service because my parents too cheap (er, thrifty?) to pay for unlimited service.

All of our friends had unlimited service. We were instructed to arrange with each friend that if we wanted to call them, we would let call them and hang up after two rings. That was a signal to call us back.

My brother and I got weekend jobs at a local supermarket a mile from our home. When we got ready to come home on a Friday or saturday night, we would drop a nickle into the pay phone, dial, let it ring twice, hang up and get our nickle back. That was a signal to our parents to come and drive us home.

Hopefully, the statute of limitations has run out on these actions. :-)

***** Moderator's Note *****

It's funny how people are sometimes: the rates came down, users stopped trying to game the system, and the ILECs are making more money than ever.

Does anyone have data on the rate/usage curve(s) that shows the "knee" point in the price curve? In other words, how much did the prices have to fall in order to stimulate the demand to the point where the lower prices resulted in higher profits?

Bill Horne

In today's dollars, the cost differential was about $15-$25 per month. For a family of modest means, that extra $15 each month adds up; certainly $25 adds up.

In the 1950s, plenty of people had two or even four party service, again due to the cost savings. My parents had message rate / two party service back then; later on they switched to private line unlimited. They were able to do this because phone rates were stable while salaries were increasing.

It's a tricky question because for an analysis to be accurate, all prices must be adjusted for inflation. Many phone rates essentially went down due to inflation even if the dollar amount remained constant.

In the case of long distance rates, after WW II each rate decrease generated higher demand. The Bell System developed higher capacity inter-city trunks (coax, microwave, carrier) which created economies of scale. The cost per individual call dropped.

I came across a Western Union ad from the mid 1950s claiming the telegram was cheaper than the typical long distance call; with a chart of costs. Around 1960 or so long distance rates dropped while telegraph rates went up and a phone call became cheaper than a telegram.