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Home » International Business Communications Scholarship » 2020 Fall IBC Scholarship Winning Essay

2020 Fall IBC Scholarship Winning Essay

The Opposite of 1-800 Numbers: Explain the rise, fall, and controversy behind 1-900 numbers

By: Jasper Moh
IBC Scholarship

It is difficult to understand the birth, let alone the rise and the fall, of 1-900 numbers without understanding the era within which it existed in. 1-800 and 1-900 numbers were two sides of the same coin, but to understand why the latter succumbed to the rise of the Internet while the other still clings on for dear life deep into the digital age requires an exploration of exploring the niche which both networks filled.

Technology in the 1970s was a far cry from the modern cornucopia that 50 more years of innovation would bring to consumers across America. There were no mobile phones yet, let alone touch screen devices or an internet to connect to. Everything that humans needed to communicate with each other was hooked up with wires—landline phones, cable television, even some radios needed to be plugged into walls for power in order for them to work. Phone calls cost money, which makes sense since it is a service provided by phone companies that are sold to owners of telephones and phone plans. The money made from each call goes forward to help maintain the phone lines, pay the workers needed to keep things running, and also line the pockets of wealthy executives and shareholders sitting in the higher echelons of the corporate ladder. The central debate at play is to determine who exactly pays for the phone call. Most people who owned phones paid the company directly in exchange for access to the service, but some instances required frequent high volume or long-distance calls. In this case, it was uncertain who will pay for this more infrastructure-demanding service—the caller, or the callee.

The first widely available solution was to make the recipient pay for it. Toll free numbers allowed callers to call free of charge, with the bill ultimately ending up on the desk of the recipients. Networks such as Zenith numbers have existed in the 1950s, requiring callers to have a lengthy conversation with a phone operator and specify that the number they want to call was indeed a toll-free number. Ultimately, this made toll-free numbers prohibitively expensive and undesirable to most companies. This all changed in 1966 when AT&T launched its first Inward Wide Area Telephone Service (InWATS), the ubiquitous toll-free 1-800 network. InWATS was undeniably a revolutionary point in telecommunication history because the automated system vastly increased the efficiency with which long-distance toll-free calls could be made. No longer was there a need to pay the salaries of thousands of human phone operators, automated machines vastly reduced the price of toll-free numbers, making it considerably more marketable to companies across the country who wanted to establish a nationwide presence.

It wouldn’t be until a decade later when engineers at AT&T realized that this could work the other way around. The infrastructure to implement this already existed; the 1-900 number came into existence in 1971 and was first widely used in March 1977 as a partnership between the White House, AT&T, and CBS Radio during a nationwide talk radio broadcast featuring the newly elected President Jimmy Carter. The 1-900 number utilized a choke point, restricting large volumes of calls and allowing one person to talk on the network at a time. At this time, 1-900 worked just like a typical long-distance call, unlike the premium rate network it was known for today. That would not be until 1980, when AT&T engineers restructured the 1-900 area code, removing the chokepoint while still offering nationwide service, charging $0.50 per call as it marketed towards news agencies and TV networks to conduct votes and polls. The 1-900 number would first come into prominence in April 1982 when Eddie Murphy threatened to kill Larry the Lobster as a sketch on Saturday Night Live. Murphy gave two options, two 1-900 numbers, one to kill Larry, the other save Larry. Over 500,000 calls were placed that night, and AT&T billed callers for a beyond respectable $250,000.

This was the kickstart that 1-900 needed. Even though AT&T and other carriers collected almost all of the money generated from premium-rate numbers, by the mid-1980s, thousands of companies and individuals had acquired 1-900 numbers and connected them to automated systems to offer services such as the weather, public health updates, or other information services, creating something like a coin-operated proto internet. One such number was the Dial-a-Shuttle program at 1-900-909-NASA, which allowed callers to listen to the radio transmissions between astronauts and ground control. It was not until 1987 when the golden age of the 1-900 number would really kick-off, when AT&T launched a program that allowed content providers to make money from their messages. The price was set at $2.00 for the first minute, charging more money per minute, and individuals across the country flocked to fill this newly created niche. Money seemed to flow naturally, freely, and in large quantities when it came to new formed unregulated markets. Rumors were told about entrepreneurs becoming instant millions overnight after establishing a 1-900 hotline. Companies and sports teams saw this as a way to earn extra revenue and devoted customers and fans shelled out hundreds of dollars to listen in. Adult chat lines and phone calls psychics proliferated during this time, all while telecommunication carriers were swimming in their partial cuts from the massive success of 1-900.

As soon as this boom began, the bust started to peer over the horizon. Adult phone sex hotlines were one of the largest sources of revenue generated from premium rate phone numbers and were the most scrutinized by religious groups and the federal government. In 1988, just one year after the massive proliferation of the 1-900, Congress finally took aim and banned such services, only for the decision to be overturned by the Supreme Court in 1989. Still, there was ample news coverage, and it brought the unsavory image to the uninitiated public that just too many 1-900 numbers were solely dial-a-porn. Public support continued to waver as the lack of regular brought out crafty scammers and con artists who abused the nature of telecommunications to squeeze out as much cash from callers as possible. Calls often had artificially long delays to increase call time, automated messages were purposely distorted, sped up, or offered little usable information, and fees were often excessive and kept hidden from the caller until their monthly phone bill arrived in the mail. The most egregious scams targeted children who used chatlines or watched ads on TV that told them to dial 1-900 numbers. Nonetheless, news agencies across the country ate up these scandals, convincing the public to avoid 1-900 numbers entirely for the risk of suddenly having their bank accounts drained. In 1992, the US Congress took aim another at phone sex hotlines, and with the Supreme Court’s permission, they finally outlawed all premium-rate numbers that provided adult content beyond a very limited range of exceptions. Just another year later, the Federal Trade Commission delivered another crippling blow to the 1-900 industry, requiring all premium numbers to include a long message explaining that money will be charged before charges incur. In addition, carriers were also required to offer the ability to block all 1-900 numbers to safeguard children from incurring unintentional charges, while advertising to children under the age of 12 was outlawed in general.

All this newfound regulation came at an incredibly unfortunate time for 1-900 as a new niche, the internet, was opening up to the public. The internet offered more than what 1-900 could ever be, and all free of charge and in a visible text and image format. Websites had information that people could simply search up and online chatrooms allowed users to connect with other people free of charge. People who ran and used 1-900 numbers, effectively neutered at this point, flocked to the internet. Indeed, money was harder to earn, as revenue largely came from low-cost ads placed on websites, but it was still a means to continue a career or a lifestyle of content generation. Premium rate phone numbers were not abandoned by this point, but they were certainly forgotten, dropped like last year’s toys in favor of something new and shiny.

During all this, 1-800 still survived. It hunkered through, offering what they originally offered, that is toll-free nationwide phone service. Initially, after Congress banned adult phone chats in 1988 and 1992, adult content providers briefly turned to use 1-800 numbers, billing with a credit card instead of directly through the phone company, before joining the ranks on the internet. 1-800 survived with little regulation because there wasn’t a need for such. Indeed, the fate of 1-900 was exacerbated by overregulation; premium rate phone numbers were still a valid means to bill and collect money, akin to Paypal or Zelle, but the vast negative reporting in addition to the restrictive legislation would turn away prospective companies and individuals from using such service. This is evident in other countries without such strict laws in place such as in Europe, Mexico, or Canada. If the market cannot adapt to an environment, it must either move or perish. 1-900 moved, no longer operating in its country of origin, but it lives on, perhaps still with a bit of controversy attached to it, but it lives on regardless.

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