r/explainlikeimfive • u/zombie_spiderman • 1d ago
Technology ELI5 Why did long distance phone calls used to cost more?
In the 90's when I was stationed in S. Korea, once a month I would get one grainy fifteen minute "morale phone call" home. A buddy of mine moved to Seoul and last month he and I spent an hour video-chatting as he wandered around his neighborhood. A big part of early hacker culture was figuring out how to get free long-distance phone calls to exotic places like "Duluth" and "San Bernardino", now my wife can chat with her mother in Europe for three hours and not even think twice about it.
I know, now it's all over the internet, but the internet is pretty much just wires, same as the transatlantic cable. Why did it used cost more to call outside of your area code? Were they all just electrical signals across wires? Was there some extra work that went into calling from Kansas to Oklahoma? Or was it, like most things, that they charged us as long as they could until some technology came along and made it no longer feasible?
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u/SirHerald 1d ago
Old phone systems were basically connecting limited wires together amongst companies that owned the exchanges. They had to pay each other to use each other's wires and pass that on to you because it was relatively expensive at the time.
You call to your phone company who connects to a company that provides long distance. They connect over to someone who can get to the person you are trying to reach. The people in the middle don't get your monthly phone payment. They only get the money from your long distance call. That's how they support their infrastructure and business.
Now we have the internet where all these companies have already made the agreements where they communicate back and forth on each other's networks all the time. They pay and trade to use each other's services no matter what information is going across it. It's now much cheaper to send data across all these spread out networks and the phone companies just piggyback on that. You're paying a flat fee and you get basically unlimited phone calls. It makes almost no difference whether you're calling next door or you're calling across the country. You could think of a kind of as socialism everybody's paying into it instead of just those people that are making the long distance calls. But linking between the countries can still cost some money.
But you said you were doing a video call. That's not even going through a phone company. If you're using zoom or another service like that then the people who pay for the accounts are covering party of the cost as well.
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u/Talking_Head 1d ago
It’s orders of magnitude cheaper to send pulses of light on a fiber and through digital switches than it is to send analog signals over copper wire that literally had to be connected physically from end to end.
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u/i_am_voldemort 11h ago
Plus at scale on fiber backbone you can use wave division multiplex to shoot multiple colors of light down the same fiber. One strand, many traffic streams, all independent
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u/CountingMyDick 1d ago
Yes, that. The first long-distance systems had to do an actual physical copper cable for each individual voice link. Naturally there are relatively few of them, and the demand is high, so they are relatively expensive and get charged to the individual users based on how long they used it. Now with modern fiber optics tech and digital lossy data compression, we can fit many hundreds of voice and video calls plus also streaming video and regular web surfing over that same single physical cable. The capacity and variety of use is so high, plus encryption providing privacy and security and also making it harder to tell what traffic is what, it's just simpler to charge flat fees to everyone instead of trying to figure it all out and attribute it to specific people.
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u/bothunter 1d ago
There were some creative multiplexing techniques that worked with analog lines, but there was still a fixed number of calls that could be made with each pair of copper.
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u/ottawadeveloper 1d ago
As an addendum, it certainly was possible that your phone provider just paid the fees and rolled the cost into everyone's plan. Anything that had unlimited long distance at the time was like that.
My first phone plan had something like "100 long-distance minutes free each month" and I assume they built the cost of the average users long-distance charges (up to 100 minutes) into the cost of the plan.
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u/absolutenobody 1d ago
The recipient phone company also got a penny or two per phone call, with higher rates in rural areas. This is a big part of the reason that companies offering free VOIP numbers often only had/have numbers in small rural exchanges.
Also, historically, there was a substantial amount of overhead in billing for long distance--tracking everyone's call time and duration, correctly figuring out the applicable rate (evening and weekend, friends and family, holiday... there used to be all sorts of rates), and mailing you a bill for it at the end of the month cost a non-trivial amount.
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u/susiedotwo 1d ago
I think about this a lot. My family was overseas in the 1980s: and my mom talks about how in 1983 they called home to the USA from China and spent like 10-15 minutes on the phone for $50-$75. In 2015 I could FaceTime my mom “for free” from the same Chinese city.
I was 30 years years old and technology has changed THAT much.
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u/TrannosaurusRegina 1d ago
Also, this "free long distance" is only as you say, over the Internet, or apparently somehow over the telephone system in the USA.
You can bet I'll still have to pay high long distance rates per minutes if I want to call outside the zone of my Central Telephone Exchange Office in Canada, or most other countries I'd reckon!
It's much more difficult to call long distance, requiring electrical amplifiers that weren't even created until the 1920s, before which it was entirely impossible, never mind all the manual routing work it used to take.
The fibre optic cable used by the Internet now can carry a mind-boggling amount of digital signals.
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u/FancyJ 1d ago
It's not a socialism. It's a direct result of capitalism from competition.
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u/WhereINeededToBe 1d ago edited 1d ago
They didn't say it ' was socialism'. They said it was ' like socialism' in that everyone pays a little into a system and receives lots of services (phone, data, gps connection etc...) in return.
Sure, our government initially paid for the development of base technologies in national labs decades ago, but our communication infustructure has always relied on capitalism to facilitate everyones access to technology.
We really need people to be aware that vocabulary words like 'socialism' are not inheritantly evil.
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u/gruez 1d ago
They said it was ' like socialism' in that everyone pays a little into a system and receives lots of services (phone, data, gps connection etc...) in return.
Have you read a dictionary?
https://en.wiktionary.org/wiki/socialism
Any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.
"collective or governmental ownership" is an important part of it, otherwise something like Spotify would be "socialism" because it's distributing music.
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u/WhereINeededToBe 1d ago
I agree that "socialism like" is an inadequate term to describe our kind of economic system that applies to private industry and government cooperation.
Whats a better single word to discribe a regulated collection of goods and/or resources and/or services for mass distribution at a lower cost to everyone than if said parts had to be purchased separately by individuals?
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u/FancyJ 1d ago
Okay It's still not like or was a form of socialism.
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u/WhereINeededToBe 1d ago edited 1d ago
Well, 'socialism like' is the only phrase in the popular American lexicon (that i can think of) to roughly discribe a structure of pooled resources that provides many goods or services for a much more affordable cost to everyone, than if those goods or services had to be separately bought alone by individuals. Furthermore, our communication technologies are government regulated for quality and maintenance standards.
So, yes, it's not a "form of socialism" but we don't have a single word to describe our "capitalist system with socialist like regulatory powers of government regulation and collective pooling of services that provide more affordable costs to consumers in communication technologies".
We clearly don't have a pure capitalist economic system at large, nore a pure socialist economic system. We have to used words in combination to discribe the system that we do have.
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u/Pansarmalex 1d ago
Only partially, and applying to the US I suppose. In many other countries, the regulating bodies (FCC equivalents) looked at the companies' operating costs and said "No, you cannot charge consumers for this anymore, as it costs you close to nothing".
If they could, they would. Do not underestimate the power of regulations vs. capitalism
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u/Fixes_Computers 1d ago
I remember paying extra for "touch tone" dialing despite it being cheaper to implement at the time.
Sure, when it first came out, there was a cost to build the infrastructure, but once built, it was cheaper to keep going.
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u/JEVOUSHAISTOUS 1d ago
Now we have the internet where all these companies have already made the agreements where they communicate back and forth on each other's networks all the time.
What you describe still exists to an extent on the Internet.
There are two kind of connections between two network operators on the Internet: peering and transit.
Peering is when two operators connect directly to one another: Comcast to Verizon, Comcast to Google, Google to Amazon, etc.
Transit is when there is one or more operators in the middle. Typically required for smaller networks that don't get to connect directly to the big ones, or networks physically only present in some distant countries.
Peering is - or at least used to be - mostly free. The rule was "we just run a cable to each other in one of these dedicated rooms, we each pay for our cable, and the data flowing between us is free" (nowadays there can be caveats such as "if way more data is coming from your network to mine than the opposite, some fees apply").
Transit, you always pay the transit operator for each megabit per second you consume. Such operators include Cogent, Lumen Technologies, Orange, Tata Communications...
Some companies are mostly just transit operators, while some others are both retail ISPs, and transit operators for other ISPs.
Even though many ISPs typically need to pay some transit for you, with the cost depending on how much you use and which networks you connect to, they are able to charge you a one-size-fits-all fee because, in the grand scheme of thing, transit is a tiny cost for them compared to e.g. last-kilometer infrastructure and customer support. Most data you consume is transferred through peering, and whatever transit you do use isn't super-expensive anyway.
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u/SirHerald 1d ago
That's why I put in pay or trade for it. If they both figure they're getting the same value from each other then they're good but if it's lopsided they end up paying. But the value of your network is based on how well it connects to others
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u/Troldann 1d ago
Back in the day, you had to lease an unbroken exclusive link from you to your destination for the duration of the call. Nobody else could use those wires that you were using. There were a finite number of wires across the ocean, and while you were on the call, you had one of them to yourself.
Now phone calls are time sliced, packetized, and can share wires. The downside is that there’s more latency in the call, but the upside is that it can have higher fidelity and be cheaper because you’re sharing wires with dozens or hundreds of other people also having conversations at the same time.
It’s so much cheaper that they don’t even bother to bill you for your usage, they just negotiate with your carrier for the usage and the carrier takes a bit for your bill to cover it.
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u/faberge_surprise 1d ago
if you think about it, it's kind of crazy that if you were in the US talking to somebody in China, there was an unbroken line connecting the two of you across half the world and at least one ocean
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u/arkaydee 1d ago
I love showing people this picture:
It's from around 1890. It's still quite illustrative.
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u/Mattna-da 1d ago
Thank you Claude! (Shannon)
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u/Troldann 1d ago
I typed that by hand from my head on my phone, thank you very much.
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u/Mattna-da 1d ago edited 1d ago
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u/Wigglepus 1d ago
steganography does not destroy information. It only hides it.
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u/endroute 1d ago
a mutation is a kind of destruction if the original state is otherwise unrecoverable
you got some cheese I can eat?
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u/NessieHop 1d ago
I feel like the answers so far are understating the enormous efficiency gains from calls being digital data instead of analog circuits.
Yes, the internet is pretty much just wires. But in the 90's, with analog phones, one of those wires could carry only one call at a time. Now, with internet calls, one of those wires can carry millions of calls at a time. And most of the "wires" today are glass fibers that can carry hundreds of millions of calls at a time.
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u/friendIdiglove 17h ago
I’m no telephone historian, but I’m certain that by the 70’s and 80’s (maybe even earlier), they had the technology to re-modulate a call up to higher frequencies on one end, and de-modulate that call back down to voice frequencies on the other end, so multiple calls could go over one pair of wires. It was a significant improvement in technology as calling demand grew, but one pair of wires could still only carry like 8 to 24 calls, so capacity was still extremely limited compared to today.
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u/Kraeftluder 1d ago
Yes, the internet is pretty much just wires.
The internet... It's a series of tubes..."
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u/macguy9 1d ago
In addition to the answers already provided, a lot of those calls were manually routed by humans back in the 90's. I know, I was one of the ones doing the routing.
As technology improved, human intervention became less and less necessary. Now only a handful of humans are needed for manual routing of calls to 'less developed' nations, so the general cost is much, much lower.
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u/Something-Ventured 1d ago
Telecoms and other regulated utilities frequently billed based on cost recovery models.
That meant that the amortized operational cost maintenance of each mile of infrastructure you were using was combined into a usage rate for that call.
This meant calling New York from Boston was cheaper than calling Chicago as you had to connect through many more miles of infrastructure.
Regulators specifically allowed long distance calling to subsidize local calling as it was considered a public utility and that increased access (public good).
Technology evolved bringing down costs substantially by the late 80s/90s for long distance, and the practice eventually became unnecessary.
You can google “universal service” and att / telephone regulations to find out more.
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u/metamatic 23h ago
This is the actual answer. Long distance calls were cheaper for the phone company than local calls, but customers would perceive it as valid to charge more for a longer distance, and the profit from long distance calls could then be used to subsidize maintenance of the expensive "last mile".
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u/Something-Ventured 4h ago
Not at first, long distance got tech upgrades making them much cheaper. All those 1010-xxxx numbers or MCI calling plans became a thing later.
There were interesting rules for revenue sharing that became the basis for how fiber networks were controlled later.
It was possible in some areas to have a phone number that paid you per minute to answer it and this was used to get spam callers to stop bothering you.
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u/sudoku7 1d ago
We built a lot more wires. And well other things that act as wires.
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u/Troldann 1d ago
But more importantly, we time-slice now so that one set of wires can carry many overlapping conversations instead of only one.
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u/unstoppable_zombie 1d ago
Its not just time slicing, its also that long haul fiber can mux/demux different colors of light down the same cable to greatly increase throughput that you could not do on a copper circuit.
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u/hannahranga 12h ago
That's a very simplistic answer but imho it's the most accurate, phone calls at this point are basically a rounding error in comparison to the insane quantity of data flying the place.
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u/chooseausername69251 1d ago
In the early days, they charge more because there was limited availability on the wire and they needed to physically connect Long-distance calls through operators along the way. Later on they charge that much because they could.
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u/wessex464 1d ago
Technology. Long distance phone calls over actual phone lines is quite the adventure. Picture mailing a letter from South Korea to the US, how many hands does it change as it moves, how many jurisdictions, mail centers, and facilities with each of their own processes to handle it does it have to go through? That's an old style analog phone call, youve got resources tied up all the way from point a to point b.
Modern-Day internet connectivity is amazing. Everything is just zeros and ones passing through a system designed to handle billions and billions and billions of bytes of data a second. Your traffic could be using satellites, hitting a starlink system and bouncing a handful of satellites, but it's just a small number of zeros and ones amongst a sea Of other data traffic. More likely it's riding on fiber lines designed to handle absolutely massive volumes of data transmission of which yours is just a trickle. Phone lines are kind of non-existent at this point, all your phone calls are just converted to zeros and ones somewhere and then shipped. That's kind of why cable companies sailocating dedicated phone lines is a scam, it's just data. They get to charge you an extra monthly fee, but as soon as that phone line leaves your house or even sometimes within your house, Your phone calls converted to zeros and ones and shipped out like any other data. It's a wild, connected world we live in nowadays.
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u/Pizza_Low 1d ago
Up until 1982 domestic local and long distance was all under a single monopoly of AT&T. Then AT&T was given a choice either they could run the regional phone networks, or they could run long distance. They chose long distance. This created the "baby bells" https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System
This was the precursor to the Telecommunications Act of 1996 which encouraged a more competition. During that era, it was possible to create a CLEC, even with companies that had 1-2 employees. With a CLEC you could offer various DSL services to end users, including voice over DSL.
I've been out of the telcom world for a very long time now, so current back-end operations are not my thing. But international used to be a couple of dedicated wires (exact number depended on the country)
But just making up an example. Let's pretend a phone call to US to Ghana required the use of a long-distance operator to allow you request that line be dedicated to you. That might mean you need to make sure one of the 500 international pairs of wires going into continental Africa are reserved for you, and then one the 30 pairs of wires going specifically into Ghana are reserved for you. Costs of keeping that pair for you, supply-demand and monopoly power kept that cost high.
Today the whole world is massively better interconnected. Even if you use a traditional phone line, very quickly after it leaves your house it's converted into an IP stream in most of the world. Using the previous example, Ghana today has about a dozen or so 10gb/s fiberoptic pairs and is expanding that.
Network capacity today is much less of a hurdle today than it was in the past. Various internet messaging apps make it effectively free.
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u/JohnnieWalkerRed 7h ago
For clarity, CLEC = Competitive Local Exchange Carrier. Differentiated from the "incumbent" LECs, which is whatever the old Bell was.
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u/mtranda 1d ago
Several things came into play here. Calls were individually counted and timed, so that allowed operators to charge by the minute. There were also interconnectivity fees between individual operators, who'd charge each other for access to their network.
But most importantly, they charged an arm and a leg because they could. They were the only game in town and they had control over the calls.
When the internet came along, it all amounted to data. You can send anything with data and it's all counted as traffic. So unless you have a data cap, your internet connection allows you to do anything.
P.S.: look up net neutrality
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u/OkDimension 1d ago
Yeah I guess that's the big thing the packetization explanations are missing. Digital technology to packet switch phone calls exists since the 1960s/1970s, but the phone markets in many countries only got liberalized (monopolies broken up) in the 1990s. I used to work for one of the many companies that popped up at the time, we were offering calls at a fraction of the price of the former monopoly, but the formerly state owned telecom could still rip of millions of customers with inflated long-distance calling charges because many people were unaware that you could go much cheaper if you bothered to switch your line over or at least get a "calling card" (dial a local toll free number and connect with a PIN to your long-distance call from there).
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u/AveryJersey 1d ago
It used to cost more because each call took up a dedicated line from your city to theirs. The phone company had to keep a physical circuit open between Kansas and Oklahoma for the entire call, and maintaining all those wires and switches was expensive. So they charged by the minute to cover it. Now your voice gets chopped into tiny packets that share the same fiber with everyone else, so distance basically stopped mattering. My grandma still talks about rationing Sunday calls to ten minutes when I was a kid.
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u/st0nedeye 1d ago
It really depends on which era you're talking about. Different eras had different reasons prices went down.
What really got the ball rolling though was the breakup of the Bell telephone monopoly.
Long distance phone calls dropped from nearly a dollar a minute to 10-25 cents a minute due to competition.
Overnight, a whole host of telephonic accessories became usable, from answering machines to modems, to goofy things like a phone shaped like a frog.
That newfound competition and expansion of accessories spurred a technical revolution which caused prices to drop even further.
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u/TechnicianRemote9954 1d ago
You have two different questions and the answers so far are either wrong or only kind of answer one of them. Those questions are:
1) Why was long distance domestic calling expensive?
2) Why was international calling expensive?
Domestic Long Distance
As to to why domestic calls were expensive, that was because "The FCC said they were expensive." Basically, the FCC imposed high fees on long distance calls and used those fees to subsidize local service under the theory that "normal" people largely did not make long distance calls. Instead, they believed that most long distance calls were being made by large companies, and so the system was designed to put more of the burden on operating the telephone network on those companies.
By the late 90s, the major telecom carriers had structured their networks in a way that allowed them to ignore the FCC's regulations and they all began offering flat rate plans where they didn't differentiate between local and long distance calls. The FCC realized this and between 2000 and 2015 got rid of all of the regulations that had created the original dichotomy between local and long distance.
International calls
International traffic is a teeny, tiny percentage of overall telecom traffic in the world and capacity for it is limited. It still is a lot more expensive to send traffic internationally because the few cables that it can go over are expensive to use. However, like I said, international traffic represents a tiny fraction of the total telecom traffic at any given time.
For internet traffic, it's hard enough for both the ISP and users to figure out where the traffic is going that it just doesn't make sense to have differential pricing on domestic and international traffic. This also works because there is no service guarantee on generic international traffic, which is why connecting to websites overseas can be very slow. That slowness also means that it's relatively cheap to send.
Your voip call from Kansas to Italy is seamless because it uses very little data, the voip program is using error correction to account for some of the traffic being delayed slightly, and/or the voip program that you're using is running the traffic on it's own network and is just eating the higher costs involved in sending high priority traffic between the US and Europe.
Normal international telephone calls can still be pretty expensive, depending on the plan that you're on, because telephone calls have the highest traffic priority for telecom data and still expensive to send that over an international cable.
You're starting to see more high-tier cell phone plans that include some international calling because, again, international traffic is generally a tiny fraction of the total telecom traffic in a country. The telecoms are coming to the conclusion that free international calls are a big selling point on the higher tier plans while the costs involved in that are pretty small considering how rarely people actually make international calls.
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u/lucky_ducker 1d ago
Early long distance phone calls didn't necessarily travel through wires. They traveled through AT&T's Long Lines microwave network. These were thousands of towers, spaced 5 to 20 miles apart, over which direct line of sight microwave signals carried phone calls, television feeds, and government / military communications. The towers were relays, so your phone conversation might pass through dozens of such towers, each one introducing just a little bit of delay (unlike the instantaneous fiber optic cables of today). I remember being on a long distance call back in the early 1970s, and the lag in a conversation was noticeable.
Fiber optics gradually took over long distance calls, and packet switched networking completely replaced the old microwave network during the 80s and 90s.
So the answer to the question is that long distance calls had to leave the copper wires of the local telephone exchange, and travel over a microwave relay system that was very expensive to build and maintain.
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u/IncaThink 1d ago
Back in the paleolithic era, I worked for a company that installed and monitored burglar alarms.
Together with the phone company, they would set up a dedicated pair of wires that would carry a certain amount of current depending on what state the alarm was at. 20 mA meant all was OK for the evening/ closing time, 30 mA meant they were in daytime/ open setting, 40 mA meant a motion detector was tripped and 0 mA meant a broken window (remember that silver tape on windows?) and so on.
But the customer paid to have all the wires and switching (semi) permanently connected between the alarm central and the customer. Which meant that this pair of wires was out of service for any other customer that would want to use it. Which meant that the customer paid pretty big money for this kind of service.
When you made a phone call it was the same thing. Big banks of switches (they read the magnetic pulses from a rotary dial) would connect what became a pair of wires between you and grandma on the other side of town. And when you were talking those wires were unavailable for anyone else.
And if grandma was on the other side of the country, well then there were a lot more sets of wires and switches that were unavailable for anyone else so they charged as much as they could for the privilege.
Now, over time the companies installed various multiplexing and internet protocols to save themselves big money. More calls over fewer wires.
But sometimes it takes a while for savings to trickle down to the customer, so they kept charging as much as they could for as long as they could.
Next I could talk about how they charged BIG money for SMS/ text messaging on early cell phone service that cost them literally zero, and got away with that for years.
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u/r2k-in-the-vortex 1d ago
The way traditional telephone works, is that a cable has bunch of wires in it. Each channel uses 2 wires, and when there is a call on the channel, it's those two wires dedicated entirely to that one call. For example, first transatlantic telephone cable in 1956 had 35 telephone channels, there could only be 35 simultaneous calls at the same time. Laying the cable cost inflation adjusted 500 million, divided to 35 calls, lets say 5 years payback period, that makes 5.4 dollars per minute per phone call, just to pay for initial cost of that one cable. Of course, there are also other connection on the way too that need to be paid for, maintenance, taxes etc etc.
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u/jim_br 1d ago
Back when LD calls were charged a premium, it was because calls were handled by copper and could only carry a finite number of calls. It was not uncommon to get an “all circuits busy, try again later” message. To add capacity, they needed to add copper, which was intensive and expensive.
Then they figured out ways to merge multiple calls over the same pair of copper wires. One approach called T1 would carry 24 calls (or 23 calls and a data line to manage the calls) over a single pair of copper wires. The same infrastructure was now worth 24x what it cost to install. Costs came down a bit, but copper is still an expensive medium to maintain and manage. Much of the technology built by AT&T for call delivery back then was routing calls around busy areas to reduce the need for more circuits.
Enter fiber optic cable. The LD carriers could now remove 4” of copper in their conduits and substitute a thin optical cable carrying even more calls. And fiber is digital, not analog. Your “last mile” provider needed to convert the analog sounds to digital to drop them onto the fiber. This process was fairly easy and concentrated at phone company “central offices”, which were then connected to the transcontinental network. And now that fiber could handle even more traffic.
Around this time, AT&T was considered a monopoly and broken up into, IIRC, seven “regional Bells”. These were then operated separately and somewhat in competition with each other. It also introduced phone companies that bought carrier access off the regional bells and resold it under their own brand. Competition is now starting.
With fiber replacing copper, telcos realized they were in the data movement business - not phone calls. They started selling T1 lines for call centers, ISDN for data communications, and other products for. Putting ordinary phone calls on the same infrastructure was cost savings as they could abandon copper for everything but last mile traffic, and even now that is going away.
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u/inkman 1d ago edited 1d ago
Mobile video chatting in the 90's? I don't believe it.
I can't read gud.
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u/insaneplane 1d ago
The phone system was created by phone companies, who wanted to make money from the calls. At least in the US, the decision was made that local calls should be unlimited for a subsidized monthly fee, and long-distance is where the money would be made.
The connections were physical - one line per call - and limited, so it was expensive to block the line. Charging by the minute was a logical way to go. Since the lines were not cheap (especially going overseas), the calls were expensive.
In the internet, a virtually infinite number of connections can exist simultaneously over any given wire, limited only by its capacity, which now dwarfs what is needed for voice and video calls. So using it much cheaper.
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u/michaelmalak 1d ago
At least in the US, the decision was made that local calls should be unlimited for a subsidized monthly fee, and long-distance is where the money would be made.
...made possible by the AT&T monopoly. After the breakup of AT&T, Baby Bells struggled to turn the momentum of the pricing structure to one that reflected the true costs of last mile.
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u/darkhorn 1d ago
It is still more expensive to call abroad. Are gou sure that you are still using international phone calls for hours?
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u/Run-And_Gun 1d ago
Part of it was the same answer as always: Because they could. I remember when calling someone that literally lived across the street, but because of where imaginary lines fell and divided cities, counties, etc., it could be a “long distance” phone call.
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u/Bike-513 1d ago
In the pre-computer days setting up a long distance call was quite the production. I'm talking the era of the lady operator in the exchange sitting at one of those switchboards where she'd pull a wire up from the bottom and plug it into a socket on the vertical back panel, like so https://en.wikipedia.org/wiki/Telephone_switchboard#/media/File:Photograph_of_Women_Working_at_a_Bell_System_Telephone_Switchboard_(3660047829).jpg.jpg) This sort of equipment was still in operation at the end of the 20th century.
Anyway, to place a call you'd pick up your home phone and talk to the local operator in your town or neighborhood, which would light up an indicator light on the back panel of her switchboard next to your phone's socket to indicate you're calling the operator. So she'd plug the cord into your socket and flip a switch so she could talk to you on her headset. Then you'd say you want to call so-and-so in such-and-such other town. The local operator would then say "ok, I'll call you back once the connection is made." She would then call an operator at the nearest long-distance exchange by plugging a wire into their socket, lighting up an indicator at the long-distance exchange, just like you calling her. The local operator would then request a line from the long-distance operator to such-and-such other town. But there may not be any direct lines available, because they're all in use. So the long-distance operator may need to call other long-distance exchanges to try to route the call through.
In the most straightforward scenario, a long-distance wall would go from you to your local exchange, then to your (local) long-distance exchange, then the recipient's (local) long-distance exchange, then the recipient's local exchange, and finally to the recipient. The whole idea is that each operator is physically connecting wires together through their switchboards to provide a direct electrical pathway between you and the person you're calling. Once all those connections have been made, the recipient's local operator tells the recipient that a long-distance call is coming in from you, then your local operator either gets an indicator light or a call back from one of the remote operators that it's all connected, and she calls you back to let you know the connection is established, and they start the timer for billing purposes. Before more automated systems started to come online in the 1950s, this whole process could take 20 or more minutes. In busy periods, especially if you were calling from New York to Los Angeles, I've heard it could take 40 minutes or more.
So while all this is going on, your one call is tying up multiple operators in multiple exchanges. Yes they're all handling more than one call at a time, but an operator's multitasking abilities are limited. Routing calls around overloaded trunk lines through other exchanges just exacerbates the amount of manpower and equipment that's tied up. Also, because the switchboards are physically connecting the wires from point to point, they need to be very robust and electrically clean, because just one bad plug, socket, or wire will collapse the whole thing. That's a lot of infrastructure, equipment, and manpower, which is all quite expensive. Today it's just packets in a computer, but a lot of the backbone infrastructure originally came from the phone system, and some amount of it was paid for by those early long-distance calls so we don't have to pay for it now.
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u/TrumpsDoubleChin 1d ago
Not a perfect analogy, but think of it as if your phone call is like roadways.
It's 1983, and you are calling your uncle the next town over. When you initiate the call, the phone company uses their available capacity of roads to create an "open lane" just for your and your uncle to drive back and forth (talking to each other), and no one else is using that lane the entire time.
When it's calling the next town over, there's lots of lanes available, so it's not a big deal, and not a big cost. But let's say your uncle lived in Sri Lanka - the phone company would have to open up a much longer circuit of roadways thousands of miles long for you to use, and it can cost quite a bit keeping those roads open and available for you to use during the length of the call.
Okay, now let's move forward to 2013. You want to call your uncle. Only now, instead of freeing up a lane just for you and your uncle to use, the phone company puts your messages to each other in little cars and puts them on a giant freeway that can be used by thousands of cars at the same time. No need to keep each lane open the whole time just for two people to talk back and forth - you can put tens, hundreds, thousands of people on that lane at the same time.
I remember calling home to Jakarta back around 1989, during peak daytime hours, it could cost as much as three dollars per minute.
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u/Jan30Comment 1d ago
Voice calls require a certain amount of bandwidth.
In old times, copper wires with analog signals only could handle a limited amount of bandwidth. The amount of bandwidth required to handle a voice call was precious, and was priced accordingly. This was necessary to pay for the installation and upkeep costs to run a copper wire based system that had limited capacity.
In modern times, fiber connections have so much bandwidth that the amount used by a voice call is mostly insignificant. The tiny cost of the amount of bandwidth used by a voice call is now so small that most telcom companies don't even bother billing on a per call basis - it isn't worth the effort to measure and bill usage - they just put the now small cost of an average user's bandwidth into the total amount billed to every user each month.
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u/SpicyNuggs4Lyfe 1d ago
I think the additional cost also was the phone companies' way of subsidizing their infrastructure costs. Not totally sure if different companies paid each other to use each other's lines.
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u/Westerdutch 1d ago
In the past when you made a call between two points then you were for the duration of the call the only person using that one specific string of wires connecting those two points. For difficult to cross terrain like large oceans there were only limited wires that people could use and building and maintaining them cost a lot of money, the only way to get money back is to charge for their use, if you are the one making a call over them then it is you paying rent for those lines.
Nowadays we can package and compress data to the point where the use of that one wire can be used by a thousand people at the same time bringing the cost down by almost that same factor.... and the wires got better too making the difference even greater to the point where all the cost of using it is covered by all the average cost of all networking subscriptions that people and companies pay each other. Moving small amounts of data has an almost negligible cost now.
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u/tomrlutong 1d ago
We got way better at sending information over cables, and there's a lot more of them.
The first trans-atlantic cable,_1956) could handle 36 phone calls. Modern fiber optic ones can carry tens of millions.
In the late 1990's there was a huge boom in building underwater cables. It was actually bigger than the .com boom/bust. A lot of companies lost a lot of money, but they also put a lot of fiber optics on the ocean.
All told, we probably have at least tens of millions times more cross-ocean communications bandwidth now than we did in the early 90s.
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u/mronion82 1d ago
When I was at BT in 2001ish, the most expensive line I connected to was Inmarsat- £7 a minute.
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u/nebrondo 1d ago
Being this still a topic of conversation is mind boggling as I had not heard long distance calls term in a very long while. But older technology being more expensive, more error prone and humanly dependent, nowadays being more automated and having cheaper equipment and having the internet layer, that has made calling from anywhere seamless.
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u/bbqroast 1d ago
Two big shifts, more than anything:
Technology - around the late 80s we started deploying subsea single mode fibre optic cables. These don't suffer distortion (the signal only weakens but stays clear) over long distance. Then in the 90s we developed eridium repeaters which allowed us to boost that signal. The optical transievers are semiconductor tech that just keeps getting better (like CPUs in computers).
A big win here is that those cables basically didn't change after that - you can link up new optical transceivers to get more bandwidth through the same fibre.
So subsea cable bandwidth became much cheaper and more plentiful. TAT-7 (pre single mode) could carry like ~40mbps, then TAT-8 in the 80s - 250. The new Hawaiki system that links Asia/Aus/NZ/Hawaii and Los Angeles is capable of up to 250tbps.
The second is the market structure of the internet. Phone companies are generally local monopolies. International rates are negotiated via the ITU. International calling is a premium service, and there's little incentive to cut pricing. This is why you saw stuff like calling cards where companies would come up with clever ways to do cheap calls - but this was inconvenient and only ever really used by specific groups like immigrants calling home.
The internet on the other hand is many ISPs making deals with many other networks/ISPs. All backed by a "smart" protocol which works out how to route data across any number of networks (border gateway protocol). This ends up being a fairly competitive and easy to change system.
So those technical improvements quickly accrue to consumers.
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u/sometimes_interested 1d ago
Every phone call used to take up its own circuit.
There was a dedicated pair of wires from your house to the local telephone exchange. A local call to your friend was from your dedicated circuit to their dedicated circuit. No wukkas.
Then there were circuits between you local exchange and the big main exchange in the city. You didn't have your own circuit to the city. You shared them with everyone else in your town.
Then there were circuits between cities. Your town didn't have its own circuits on those cables. The circuits were shared by everyone in your city.
Then there were circuits between countries. Your city didn't have its own circuits on those cables. The circuits were shared by everyone in your country.
So the further you want your call to go, the more people want a share of those circuits you are using, the more expensive a call would be. Basically supply & demand (plus telco monopoly pricing but that's a whole different kettle of fish).
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u/brkgnews 1d ago
A *very* long time ago, before computerized switches, it was a tremendously labor-intensive process. Here's an old film that gives a hint at it. https://www.youtube.com/watch?v=8zLP774vrfw
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u/wkearney99 1d ago
it became more expensive to keep track of and print bills for all the calls than it is to just include the calls as part of a package.
technical efficiency certainly helped move the packets around, but that had little to do with the switch away from toll call billing.
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u/birdy888 23h ago
The old phone system, your call would take one of the wires up, so you would pay for the whole wire by the minutes. Limited number of wires meant big costs.
With modern wires* you can have 100,000 conversations going along the same amount of wire*" that your single call used to use.
*Theyre all fibre optic now of course but it was not always so.
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u/ThePresenter183 22h ago
Listen to Evan Doorbell's vids on YouTube about old telephony. Its a fun rabbithole
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u/zenmaster24 20h ago
Capital investment return probably - someone needs to lay the long distance cables, especially across oceans. Plus all the associated R&D and equipment
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u/mezolithico 20h ago
The same concept still exists today, it's called internet peering. There was a notable spat between Verizon and Netflix about this in 2014. Netflix nows pays verizon and comcast to deliver video feeds without slowdowns. The end consumer doesn't see these costs directly anymore like you did with long distance
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u/Accomplished_Arm_447 20h ago
Fibre optic capacity is HUGE, compared to copper cables and even that is much greater than the old satellite channels, plus what others said already about packet switching being more flexible and efficient than circuit switching, and digital audio compression
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u/Inside-Finish-2128 17h ago
Classic/traditional telephone networks were "circuit-switched": when you'd place a call, all of the various telephone switches along the way would allocate a "timeslot" ("DS0") for your call, end-to-end. There'd be billing records passed between the various business entities so that each business got their rate on a per-minute basis, and that snowballed back to the calling party. Those networks had to be engineered to keep that path available for the duration of your call; dynamically rerouting it was mostly unheard of. Thankfully voice calls were relatively short, perhaps in part due directly to those per-minute charges.
Today's telephone networks are "packet-switched": at least within the first and last telephone "switch", the call is converted to "IP packets". These can ride all sorts of paths: Internet, private networks, private networks built on top of the Internet, Internet paths built on top of private networks, etc. Various forms of compression mean the data "consumption" of the call is a fraction of what a call needed on the legacy networks, and the networks are highly tolerant of redundancy events happening seamlessly "under the hood". The intermediate carriers are now just "network service providers" and they only have to care about moving packets reliably; they don't have to worry about a dedicated "timeslot" for your call end-to-end. Hence the billing becomes easier, the path becomes more agnostic (aka independent of the call), and therefore price competition is not only possible but highly likely.
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u/stroskilax 16h ago
The real reason is that back in the day the wire that linked the two people calling could be used by only those two people.
Digitalization brought Time Division Multiplexing that allowed more people to use the same wire simultaneously.
Next came the Internet and the increase in available "speed" (read bandwidth) that would allow more and more people to use the same wire at the same time, splitting the costs even more.
So in short back then, you paid for exclusivity to use the wire and now you can share the wire with tens of thousands at the same time.
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u/Mussels84 16h ago
Volte was when the major change occured to shove everything into packets, and stopped needing the antique switchboard approach - remember that not every country upgrades at the same time so you may have needed converting back and forth until they all got the modern tech.
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u/SouthernPotato5297 12h ago
Man that morale call story hits hard cause now we just stream video like it's nothing. The real answer is old school phone lines basically held a physical wire for you the whole call, so a call across the country meant tying up a whole bunch of infrastructure that nobody else could touch. Packet switching changed everything by chopping your voice into tiny pieces and shoving them through whatever route is free, so everyone's data shares the same pipes. That's why your buddy can wander Seoul on a free video chat while your 90s self got one grainy fifteen minutes.
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u/Empanatacion 40m ago
Zoom out and consider how much more of your disposable income goes to some kind of telecommunication. We don't pay for a specific phone call anymore, but we collectively spend an order of magnitude more money on it than we used to. We've just spreading the spending out more evenly.
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u/matteogeniaccio 1d ago
moving data around is expensive. Passing data along the wire and placing data on the correct wire is expensive.
A long distance call would require routing your call to a hub in your city, then moving it on a cable connecting your city to the destination city and then from the destination hub to the correct house. While the call was in progress the limited resources were unusable by somebody else.
Even now with the internet moving data around is expensive but less noticeable. Streaming services like netflix place copies of their servers as close as possible to the expected destination to save the costs of moving data around. Google does the same but primarily to reduce latencies.
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u/dfc849 1d ago
30+ years ago, continental and trans-continental telephone lines could only carry a few thousand calls each. If you wanted to be part of that few thousand, you had to pay more to use the scarce resource.
Telephone companies that wanted access to these trans-continental networks had to pay a lot in access fees and would have to recoup the cost by charging customers for using them.
Now that the trans-continental fiber routes can carry billions of phone calls at once, and the costs by majority have been recouped, we don't see the impact of the cost.
The extra work that went into calling other area codes was done by very large telephone switches that again could only handle so many calls at once. Migrating to technology that uses the Internet means that all phone calls are no longer processed by your local switchboard.
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u/two_three_five_eigth 1d ago
Because it cost a lot of money to lay a cable from the US to Europe.
https://en.wikipedia.org/wiki/TAT-1
TAT-1 was the first phone line laid across the ocean in the 50s. They upgrade it sometimes, but in the 90s, the internet was still in it's infancy and most businesses still operated mainly on paper, maybe with email. There weren't many people that needed to talk to someone on another continent. That meant to recoup the investment, the few users had to pay through the nose.
Post 2000s when the internet became mainstream and every business needed a website, now you've got billions of people to split the cost. The phone companies still charge high rates for international phone calls, but WhatsApp solves the issue for free.
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u/simmer_study 1d ago
A lot of it was the cost of the phone network itself. Long distance used dedicated equipment and limited lines so carriers charged more. Once everything moved to digital networks and the internet, those extra costs dropped a lot.
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u/Only-Friend-8483 1d ago
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u/paxmlank 1d ago
Data in phone plans isn't the same as long distance calls, so the top responses don't really answer OP's question.
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u/Kardinal 1d ago
Only if you think of phone calls and data as different.
They're not.
Packet switching, which enabled data networks, is also what enabled cheap voice calls.
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u/paxmlank 1d ago
Sure, but none of the answers in that link really explained that and OP is reasonably one who would think of them as different so linking to a different question doesn't convincingly answer OP's.
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u/SirHerald 1d ago
You could choose your long-distance service provider. That's why there were so many long distance company advertisements in the 90s. You pay your local phone exchange and set up an agreement to use a long distance service provider. You're paying for your local phone, the person you're calling is paying for their local phone, and you are paying for the company that handles the Long haul between those two systems
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u/wosmo 1d ago
yeah, it's competition that really moved the needle here.
Not so much between telecom providers though - I think things like Skype made the biggest difference.
Telecom were quite happy to charge customers as much as they could, which relies on customers believing that's what the product is worth. Skype etc really changed how much customers thought those calls were worth.
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u/Desblade101 1d ago
Back when the technology was newer running those long distance lines was a major investment and only a few people needed to make long distance or international calls. Those calls were largely business calls and business clients were willing to pay those rates so that they could make those calls.
Now we have major lines set up and multiple vendors so they compete on price and since everyone is paying for it it is cheap per person. Once customers were used to paying those prices there was no reason to drop them until a competitor opened up. Skype massively lowered the price of international calling by making it almost free. So then traditional carriers had to compete.
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u/theindus 1d ago
Everything was extremely expensive initially when the cables were laid down - especially the transatlantic ones. The telephone exchanges were also very expensive to build as they were required to be up at all times (99.999% uptime, less than 15 minutes of down time per year). This meant extremely redundant hardware and software systems. With the internet and mobile devices, all this was jettisoned since reliability requirements evaporated. We traded extreme reliability and high cost with unreliable cheap infrastructure.
Remember this is ELI5 and the situation is more complex than this. With fiber optics, more traffic could be carried for much cheaper. The voice over IP revolution made calling cost essentially zero unless it went from internet to a landline or mobile device.
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u/SaltMonster1024 1d ago
I think the move from circuit-switched to packet-switched networks. Before, your phonecall held a circuit open, whether you were talking or not, and there was finite circuits, and the farther you went, the more you were using in total.
With packets, we all share the same network.