A Century of Reaching Out : Pay Telephones Ring In a Centennial

Pay phones, the favored way for Americans on the go to reach out and touch someone, celebrate their 100th birthday this year, growing from a lone outpost in a Connecticut bank to a $3.5-billion-a-year market.

Born 13 years after Alexander Graham Bell first called for room service, the pay phone has drawn strength from America’s expansion, and its increased travel and commerce. Pay phones are now 1.8 million strong, sit atop Colorado’s Pikes Peak and fly on Pan Am Corp.’s East Coast air shuttle.

Americans place $3.5 billion worth of calls from pay phones each year, according to American Telephone & Telegraph Co., the nation’s largest pay phone-maker.

On Monday, AT&T; held a birthday party for the devices in its New York headquarters, celebrating their history with a display that includes the 1889 original and photos from the 1940s showing GIs lined up to call home.

The festivities have taken on a special urgency, as a federal judge ruled in October that long-distance calling from Bell pay phones should be opened to competition.

In some parts of the country, the process of converting pay phones to chosen long-distance carriers began April 1. AT&T;, once a virtual monopoly on the pay phone market, must now fight to keep rivals off its home turf. The long-distance pay phone market is worth about $2 billion a year.

The pay phone market is expected to grow 5% to 7% a year, said John Powell, AT&T;’s director of special long-distance sales, thanks to cheap air fares and the general economic expansion. AT&T; receives a large chunk of its pay phone revenue from travelers.

But progress has its price. Superman would be chagrined to see some of the current trends, such as the demise of actual phone booths.

“Booths are on the decline,” said AT&T; historian Jeff Sturchio. “Architectural styles have changed and that’s had an impact . . . Often a wooden phone booth will look out of place in a snazzy new Manhattan office building.”

In addition, the moving parts of a booth, such as sliding doors and hinges, are more difficult to maintain than the phones themselves, he said.

Coin calls are on the way out, Powell said, as calling cards help customers avoid a frantic fumble for loose change.

The telephone was invented in 1876, and entrepreneurs soon set up outlets to charge for calls. In 1889, inventor William Gray--creator of baseball’s inflatable chest protector--put a coin-operated phone at a bank in Hartford, Conn.

The first coin-op was a bulky wooden box, which the caller would crank to send a signal to the operator. After the operator contacted the other party, the caller would drop 10 cents, triggering the call by the sound of a coin falling.

But problems abounded: A slug could emit the same sound of a coin falling, and calls longer than the 10-cent limit would still go through on a post-pay, or IOU basis. The system, for obvious reasons, was short-lived.

By 1902, some 81,000 pay phones dotted the nation’s landscape, and the first outdoor pay phone debuted in 1905 on a Cincinnati street. By then, the cost of a call had also dropped to 5 cents.

But the outdoor idea was soon put on hold. Americans were not used to making private calls from public places, Sturchio said, and with only one in 25 owning a phone, there was no one to call.

“The major impetus for growth was World War II,” said Sturchio. “You had a lot of soldiers calling home from far away, and AT&T; had mobile units at Army and Navy bases all over the country. People got used to the idea of pay phones.”

The pay phone ranks blossomed to 1 million by 1960, Sturchio said, also boosted by technological factors that lowered costs. A 10-minute call from New York to Boston cost $4 in 1889, or about $48 in current dollars, compared to $3.12 in 1989 with an AT&T; credit card.

And the original 10 cents needed for a local call has peaked at 20 cents to a quarter.

Long-distance pay phone calls are a small part of the $50-billion overall long-distance market, Powell said. But the machines still carry muscle in high places. AT&T; said the U.S. Treasury consulted with its Bell Labs unit in 1964 before changing the metallic content of coins to make sure they could still work in pay telephones.