The Rising Toll of the Telephone Hang-Up

PRESUMABLY Marshall McLuhan did not intend to spread alarm when he described communications networks as "extensions of our physical and nervous systems." What happens when that central extension, the telephone network, shows symptoms of a nervous breakdown? For a distressing number of months, it has. When there should be a dial tone, all too often there is only silence or a snap, crackle and pop. Sometimes a call connects to someone else's conversation. The epitaph for much of 1970 America could be "Sorry, the number that you have dialed is not a working number."

Probably the most bizarre experience was that of a young New York City woman who was billed $181.39 for three calls to Ireland that she did not make, then picked up her phone one day and heard violin music (apparently from a crossed Muzak line). A woman in Los Angeles asked the General Telephone Co. to let her keep her telephone number when she moved. The company did so, but it also gave the number to someone else. When the number is dialed now, two phones ring simultaneously in two different homes. At Atlanta Airport, some telephones continue ringing after they are answered (the local Southern Bell, in a delicious example of inefficiency, used to mail 200 separate checks in 200 separate envelopes to pay the airport's monthly commission on 200 pay phones). Complaints and tempers run high in Chicago, Miami and Los Angeles. In San Francisco, the simple transfer of service from one address to another accounted for seven errors, including a wrong number, a wrong listing at central, and a reconnection that wound up on an unwanted party line.

Wrong Numbers. What is bugging the telephone? The machine is not at fault. The average telephone goes out of order only once every 4 1/2 years. At telephone exchanges, the traditional electrical-mechanical crossbar switching equipment, which routes calls through an open path in an intricate network of switches, is so reliable that it averages only 20 seconds of down time a year. Newer electronic systems now being installed are not only faster than crossbars, but can be programmed like a computer to transfer calls automatically to another number when a subscriber is away from home.

The Bell people's commonplace explanation for all the trouble is that the system is overloaded. When more than 20% of the phones on an exchange are in use at the same time, the dial tone is delayed as calls stack up like planes over an airport. Planning ahead to avoid such overloads is the essence of efficiency and probably management's single most important function. The tangle in the New York telephone system today offers a case study in what happens when a company gets its number wrong.

Primitive Art. At the New York Telephone Co., a subsidiary of A.T. & T.'s Bell System, forecasts of demand for new phones were 22% too low in 1965, 14% too high in 1966, 19% too high in 1967, 20% too low in 1968. For 1968, the company raised its capital-investment budget, which usually ran around $400 million, to $500 million. But even that was not really enough to cope with frenetic business growth. On Wall Street, which has possibly the world's most concentrated demand for phone service, peak-hour calling jumped more than 50%, and the overworked system jammed up, at an inestimable loss of business to brokers and to the phone company itself.

There were, of course, extenuating circumstances. Bell uses two statistical methods in its forecasts, one projecting patterns of telephone use, the other economic growth. The art is still primitive. The New York Stock Exchange, for instance, vastly underestimated its trading volume, and Bell, in consequence, was unprepared to meet the brokers' demands. The company could not have foreseen the exchange's decision to go on a shorter day, which led to more calls in fewer hours. Nor could it have expected a city decision that people on welfare have the right to a city-paid telephone--which caused another upsurge in demand. Americans are also talking more; the average telephone conversation now takes 20% more time than it did a few years ago. In addition, the need for more maintenance men to fix business phones has meant that fewer are available to repair vandal-plagued pay phones. But all that does not explain management's reliance on forecasts that had been grossly inaccurate in the past, nor its slow response when trouble began.

Catch-Up Football. New York Telephone is scrambling to recoup, at considerable cost. It raised the capital-investment budget to $727 million last year and $880 million this year, and brought in 1,500 repairmen from other parts of the country for four months of overtime work. They found many unfamiliar problems. Often manholes became so crowded with lines that repairmen could hardly work in them. In its equipment production plants, Western Electric, which is also a Bell subsidiary, gave top priority to orders from New York Telephone--at the expense of some delay in deliveries to other systems.

Critics contend that New York Telephone could have done far more by bringing in outside contractors and buying equipment from Western Electric's competitors, as other Bell subsidiaries have done to maintain service. "They're playing catch-up football," says Telephone Consultant William Schwartz, "and they're falling farther and farther behind." Like other phone consultants, not all of whom agree with him, Schwartz earns part of his living from the company's inefficiency. In studying a client company's telephone needs with an eye to trimming costs, consultants often get refunds for clients who have been overbilled by Bell. One Manhattan brokerage firm for years unknowingly paid for a line to a vacant lot.

New York Telephone's ills are compounded by its seeming inability to hold a skilled staff. It takes three years for telephone repairmen to become expert in their job, but 50% of them leave within two years. The prime reason is pay. A repairman starts at $95 a week and after six years climbs to $184, not enough to hold the best of men in inflationary times.

It is sadly ironic that New York Telephone is vehemently faulted in one department where its efforts are most laudable of all. Fully 60% of its 10,000 operators are blacks or Puerto Ricans, often recruited from the ghetto. Many of the information operators are scarcely acquainted with the geography of New York City--let alone places out of town--and some are unable to cope as yet with demands of business life. New York Telephone spends an average $600 each to train the young women, even giving them remedial reading and elocution courses.

Rate Raise. What can be done about the telephone service? More competition is probably not the answer because the Bell System still provides decidedly better service than most of its much smaller competitors. It is also superior to the phone service in almost any other country. One interesting suggestion to assure a fairer deal for the customer is legislation--already in effect in Florida and Arkansas--that provides an incentive by directly tying the telephone company's permitted profit to the level of service that it provides. Bell contends that it needs a return of 8% to 8 1/2%, on invested capital, compared with its present legal limit of 7 1/2%, in order to buy equipment for future needs. Three weeks ago, New York Telephone raised its rates. The monthly cost of a typical Manhattan residential phone went from $12 to $12.75, which the company calculates will return it less than 7% --whether or not its service improves.

Last week Consultant Schwartz started the Committee for Improved Telephone Service to press for legislation setting minimum standards of service. The committee's goal: 95% of all calls to operators answered within five seconds, 90% of calls for repairs answered within 20 seconds, and a repairman dispatched within two hours. That would be a considerable improvement on today's performance. New York Telephone's current goal is ten seconds to get a dial tone or an operator, and four to 24 hours to send a repairman to the house. One measure of how far the telephone system has fallen is that what seemed natural only a few years ago appears positively Utopian today.

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