One of the problems with the modems circa 1960 was that AT&T felt they
> should operate over nearly any dialed-up connection between any two
> points. With the state of the telephone plant in the early 1960s this
> was a tall order.
I am far more sensitive to minute power outages and "blinks" because my electronic gear gets wacky. Newer gear has internal battery backup, but usually the clock is off by a minute or two and some settings are lost. Other gear (like my microwave) goes to blink. One of my clocks takes a 9V battery as backup, but chews them up.
Anyway, the phone system as of 1960 was similar. It was fine for us to talk over and an occassional click or pop or slight crosstalk was ignored by humans.
But sending data at 2400 is another story. One little click disrupts a whole stream and requires a re-transmission. The older switches could be 'noisy'.
This would be a requirement for TWX, offering nationwide
> service, and for higher-speed modems.
TWX was low speed and more tolerant of errors, though obviously undesirable. I understand modern Teletypes could be equipped with parity detection, but that needed ASCII and IIRC TWX was still Baudot. From the little I've seen reprinted in books and actual use, I believe some errors were expected and critical fields like money amounts were spelled out. In 1974 my employer had a TTY and using it was supposedly a pain.
Meanwhile the telephone plant was rapidly improving and the
> probability of getting an unusable connection was steadily going
> down. So the Bell modems were overdesigned and consequently
> overpriced for the kind of service that much of the market needed.
Yes the Bell System was constantly improving its physical plant, but it was also expanding very rapidly. In 1960 plenty of calls were still handled over open wire through SxS offices and it would take years to upgrade that.
Given the criticality of data transmission, I suspect overdesign was prudent and valuable. In the 1970s my employer was always switching between AT&T and IBM modems seeking one that provided the highest reliability. Private leased lines has mixed reliability and digital lines looked promising (although a digital line was either fully working or broken and a bad analog line still got some data through.) BTW, divesture hurt us badly because suddenly our lines were arbitrarily split between the local and long distance carriers and immediately finger pointing began.
We take effortless data communication for granted today, but not long ago it wasn't so easy.