Category: Network

by Gene Retske

What?

Last time we talked about why a system for exporting U.S. dialtone to foreign countries was attractive. It was a win for the foreign caller who saved a bundle on international calls. A win for the U.S. based service provider who made a profit, and for the U.S. carrier who was paid for the calls made by the service provider. Not as fortunate was the government owned foreign PTT – Post, Telephone and Telegraph, who sold phone service at a significant, often obscene, markup. To top it off, the PTT was a combination of the phone company and the government telephone regulator, so they could prohibit any competition. This was the ultimate in monopoly, where one company not only provided the service, but regulated it as well, prohibiting any competition. What if General Motors could legally ban any cars, except its own, from traveling down the highways and streets?

If you were prevented from building or operating any infrastructure in the country, how could you possibly compete? There was certainly a financial incentive for the service provider and the customer alike, but with regulatory barriers, it appeared impossible to offer a service in competition to the PTT.

Where’s there a will, there is a way. A few U.S. based companies offered services to overseas travelers. International Discount Telephone (IDT), based in Hackensack New Jersey, founded by Howard Jonas was one such company, as was Kallback founded in Seattle by Joel Eisenberg, both offered innovative international calling services. Both companies provided services that connected to the service provider with a U.S. originated call placed by an operator, who spoke to the subscriber who gave them the number to call. The call to the foreign end was at U.S. rates, and the completion call, whether U.S. or international, went at low U.S. calling rates.

As you can imagine, having the call originated from the U.S. had a plethora of problems.

First, the subscriber had to be by the phone in the hotel when the call was placed. Often, the subscriber would sign up for periodic calls, like every day at 10 AM. They would then tell the operator what number to call for them, and when answered, the operator would bridge the two calls and monitor the connection so it could be disconnected when the call was finished. The subscriber could then request another number, if they wished.

While this scheme worked well, there was no easy way to place calls on an ad hoc basis. The subscriber had to arrange the call from the service provider in advance with details of where they would be, and at what exact time. Depending on the language skills of the service provider, getting the hotel operator to place the call to the subscriber could be troublesome.

For the callback service to be a serious competitor to the PTT monopoly, it must be accessible easily, quickly and cheaply using currently available products or services. One of the “manual” callback providers installed a Telephone Answering Service console. TAS works by utilizing the Direct Inward Dialing service which directs a number, often a large number, of telephone numbers to a few inbound trunks. As the calls come in, the operator’s console shows the DID number that was called, so they can answer with the name of the company. Many hundreds, or even thousands of numbers can be served by a handful of actual connected trunks. DID numbers are assigned in groups of 100 and are routed to a group of trunks, who signal the TAS console, using one of the trunks, the DID number that was requested. The TAS console then displays the DID number being called to the operator who can then answer with the name of the subscriber. The TAS operator kept an itinerary for every subscriber, with the telephone number to call them at, and the time or times to call them. The itinerary could be updated when the subscriber talked to the operator.

A clever TAS operator in the Northwest recognized the potential for DID and TAS to be used to indicate that an individual subscriber possibly outside the U.S. wanted to place a call. The TAS operator could use this DID number, without answering, look up contact information for the subscriber, and call them back, giving them access to U.S. dialtone. Key to this scheme is that the incoming DID call is NOT, repeat NOT, answered. Even back then, it was the usual practice for the PTT to not charge for an outgoing call if it was not answered, even if the call was to a number outside the PTT’s country.

The next step was to automate the placing of the call to the subscriber when he called the DID number assigned to him. When the subscriber answered the call, the system could provide dialtone, ready to make calls.

The stage was set for a telecom revolution to take place. And, so it did!

Next – Part 3, Conversant enters the picture.

by Gene Retske

Why?

Callback. International Callback. Ever hear of it? It was a significant use for the AT&T Conversant in the 1990s. I had never heard of it either, until one day in 1993 in Miami when I was introduced to an Argentinean entrepreneur who wanted me to create one for him. When I left AT&T in 1992 after a twenty year career to strike out on my own, founding a Value Added Reseller company. As a systems integrator, it was our job to put together hardware, software, network services and whatever else, to create a system meet our customer’s needs.

We had created and sold interactive voice response systems for banking, tourism, automotive dealers and others. I thought I had heard it all, until I heard about International Callback. I have to admit, when the Argentinean first started laying it out for me, I thought maybe I was not hearing him right. After all, he spoke like an Argentinean, which he was, and I spoke a Puerto Rican dialect. He patiently explained what he wanted.

In a word, he wanted the ability for someone in Argentina to get U.S. dialtone from a service provider in the U.S., using U.S. carriers and U.S. calling rates. Got it? Well, neither did I until he laid out the numbers for me on a yellow legal pad. A call from Argentina to the U.S. was about $2 a minute, with a three minute minimum, for a total of $6 per call, assuming the call was answered on the U.S. end.

In those days, faxes were a common international communications method, and the vast majority were one pagers. A one page fax originated in Buenas Aires to New York, was thus charged at the minimum of $6, even though it probably transmitted in less than one minute. If we could somehow connect to U.S. dialtone, the same call would cost less than a dollar at U.S. rates. I will go through the economics of this in a future post.

But, how to get the Argentinean connected to U.S. dialtone without actually completing a call via Telintar, the government owned, operated and regulated Argentinean long distance company?

In addition to faxes, another group of heavy users, international business travelers, was a significant market. If originating an international long distance call on the foreign telephone company’s lines was expensive, making the call on a hotel telephone was even more costly.

At least one U.S. company, the International Discount Telephone company, founded by Howard Jonas, was offering a service to business travelers. For a fee, they would have an operator call your hotel at a designated time, and place calls for you. There were some obvious shortcomings, like the lack of an ability to place calls ad hoc; they had to be pre-arranged. It was also labor intensive, since a U.S. based operator had to place the calls to the subscriber, get the calling information, placing the calls and then monitoring to see if the call was still proceeding.

We’re just getting started, but where there is an opportunity to create a business with profit, the creative juices begin to flow.

Next – Technological challenges, and good ol’ U.S. creativity.