Telephones Get Smart

By Janice Castro

Roger Goldberger was relaxing at home after work when the phone rang. As soon as he answered, an unfamiliar voice blurted out a string of obscenities, then the caller hung up. Goldberger, a department-store manager in Harrisburg, Pa., calmly pressed *69 on his telephone, triggering an automatic return of the call. A phone rang; the same male voice answered. "You just called my house, and I don't appreciate what you said!" shouted Goldberger. The stunned teenager mumbled an apology and then asked, "How did you know it was me?" "It was easy," Goldberger replied. "My telephone is smarter than you are."

Telephones have come a long way in the 111 years since Alexander Graham Bell made the first call on his invention, summoning his assistant from an office down the hall with the words "Mr. Watson, come here. I want you." Today Bell might simply look at his telephone and say, "Call Watson." A torrent of new technology is turning the plain old telephone and its push-button heirs into sophisticated electronic instruments that are part phone and part computer. They can remember frequently used numbers, block out unwanted calls and listen to voice commands. Once available only to business customers, these "smart" telephone features are now being offered to residential customers.

! When telephones are connected to new computer-controlled intelligent networks, their capabilities rapidly multiply. Executives separated by thousands of miles, for example, can now use their telephones to send documents to one another, swap computer data or hold video teleconferences.

The momentum of technological change will get a major boost this summer when the General Services Administration receives bids from suppliers competing for the contract to provide new long-distance services to the U.S. Government over the next ten years. At a cost of $450 million for the first year, the job of linking 1.3 million telephones in 3,500 different federal offices in the U.S. and its territories will be the largest telephone project in history. Among other state-of-the-art features, the new system will provide Government workers with the capability of holding video teleconferences and sending messages to one another's personal computer screens. The companies that win the contract may be in a position to set the standards for the phones of the future.

In an effort to win the competition, each of the principal bidders has formed an alliance with other big firms that can bring to the project expertise in large computer networks and other skills. AT&T has linked up with Boeing, which already operates a high-tech voice-and-data network for the National Aeronautics and Space Administration. MCI is working with Martin Marietta, the aerospace giant, and Northern Telecom, Canada's largest telephone-equipment manufacturer. U.S. Sprint has enlisted Electronic Data Systems, the data-processing subsidiary of General Motors.

The proliferation of telephone technology abruptly accelerated when the Bell System was broken up in 1984. Since divestiture, consumers have returned some 70 million leased telephones to AT&T. Now they are buying equipment and services from companies as diverse as Sony, GTE and Panasonic. Today at least 60% of all telephones purchased in the U.S. have one or more sophisticated features. Says Christopher Jackson, a telephone expert at the Yankee Group, a Boston market-research firm: "The plain old black box is a relic of the past. People want their telephones to do something other than place calls and receive calls."

Some programmable phones can now memorize up to 100 numbers, so that users can dial just one or two digits to make a call. Unmanned automatic models can dial a list of other phones and play a recorded sales pitch or other messages. A new, memory-equipped phone from Colonial Data Technologies dials a call when the name of the person desired is spelled on its keyboard.

Some phones come with voice-recognition devices that enable them to follow verbal orders. These phones have proved especially popular with drivers, who can make a call while keeping both hands on the wheel. Innovative Devices, of Santa Clara, Calif., sells a car phone that "listens" for about $200. Once the owner has programmed up to 100 names, along with the corresponding numbers, he simply tells the phone to call George or Leslie.

After a new voice-synthesizing adapter goes on sale, phones may seem to develop their own crotchety personalities. Example: the phone might announce that "Norman Brown is calling." If the owner punches the code to reject the call, the phone will do the dirty work, politely informing Mr. Brown that the call has not been accepted.

The IQ of a phone dramatically improves when it is plugged into a telephone network with smarts. The intelligence is provided by special switching equipment running new software developed mostly by AT&T. The equipment has made a range of complex phone features available to about half a million homes in at least six states, from Indiana to New Jersey. The services are collectively known as Custom Local-Area Signalling Services, or CLASS.

Perhaps because it enhances privacy, call blocking is one of the more popular CLASS features. By punching a simple code into the phone, the user can program this service, which rejects calls from certain local numbers. To avoid having to talk to that former boyfriend or that pest of a salesman, the owner can direct the phone to generate a recorded message -- some version of "I'm sorry, the party you have dialed is not accepting your call at this time" -- whenever someone on the list tries to get through. Jeffrey Lipman, 35, a pharmacist in Harrisburg, Pa., has combined call blocking with another feature, known as distinctive ringing, which signals calls from selected numbers by trilling with a special tone. Now he can be sure to take calls from local hospitals and nursing homes -- his biggest customers -- while screening out those from certain pharmaceutical salesmen. Cost: $7 a month for these and two other features.

One CLASS option -- Identa Call -- can save lives. When equipped with this feature, a phone displays the caller's number on a small screen. In Atlantic City, N.J., employees at the Bally's Casino Hotel came to the aid of a heart- attack victim after the feature was programmed into the hotel's internal phone system last November. The guest had placed a desperate call to the front desk but could not stay on the phone long enough to give a name or room number.

High-tech phone services are not cheap, so some features may have limited appeal. Pennsylvania Bell charges $5 a month for call blocking and $3 every time a customer activates call tracing, which scans an electronic directory of phone listings in order to identify the source of a call. The cost may decline, however, as more users subscribe to the services. By 1990, about half of the more than 80 million U.S. households with telephones will have access to CLASS services.

Of course, new technology is always disconcerting, at least at first. At Chicago Kenworth, a heavy-truck dealer in suburban Markham, Ill., Accounting Clerk Luanna Domke shudders when she describes the arrival of the company's new Inter-Tel GX smart telephones earlier this month. Says Domke: "The first day, everyone was in a panic. People were saying, 'Oh, my God! What do I do with it?' "

The capabilities of phones will be dramatically enhanced when an entirely new transmission technology, known as the Integrated Services Digital Network, is put into place across the U.S. Currently, most phone service is based on analog transmission, in which voices and data are carried by ordinary electric currents. ISDN uses a dense stream of digital signals: 0s and 1s.

The chief advantage of ISDN, especially for businesses, is that it enables phone users to transmit voices, video images and computer data along the same line simultaneously. In analog systems, separate lines are required for each of these functions. But with ISDN, callers can easily exchange documents, see each other and talk all at the same time. Moreover, ISDN will enable otherwise incompatible computer systems to communicate with one another. And greater amounts of data can be transmitted much more rapidly through ISDN than with analog equipment.

Working with Illinois Bell, McDonald's is now using ISDN technology to link its Oak Brook, Ill., headquarters with its Chicago regional office. Tenneco and Shell Oil will begin tests by early next year. To the consternation of the local and regional Bells, a few companies, including Westinghouse and the Travelers insurance firm, have installed their own ISDN internal systems. The Bells are concerned that they may lose some of their largest customers if more companies follow suit.

By 1990 ISDN is expected to be installed in most major urban centers. All the equipment in the Government's new phone network will be compatible with the new system. Households and businesses with older equipment will be able to place calls in the ISDN network, but special adaptors will be needed to take advantage of the system's enhanced capabilities, like simultaneously transmitting images and data.

As users master the new complexities of phones, they find that the gadgets save them time and energy. Businesses, in particular, report that high-tech phones increase productivity and cut travel costs by making it possible to meet and swap information by phone line instead of by airline. Says Gary Handler, vice president of network planning for Bell Communications Research, the engineering arm for the local telephone companies: "The telephone network of the next generation will be capable of doing almost anything the public wants. The only question: Is the public ready?" If the speed with which smart telephones are appearing in homes and offices is any indication, the answer to that question is a resounding yes.

With reporting by Thomas McCarroll/New York, with other bureaus