Why 900 numbers went into decline
The 900-number business peaked in 1992, when
callers paid $3 billion for their services, according to The New York Times. Within about a decade, the market declined to about a third of that level.
Telecom analyst Roger Entner said there were cases in which kids would call these numbers and rack up hundreds of dollars on their parents’ phone bills, which led to increased regulation.
In 1992, the Supreme Court
ruled against 900 numbers that provided adult services, killing businesses in that space. Some
migrated to 800 numbers.
“The phone companies didn’t like to be associated with the ‘adult’ part,” said Eli Noam, a professor of finance and economics at the Columbia Business School. “The phone companies were politically sensitive, and politicians didn’t like this.”
Then in 1993, the Federal Trade Commission created a rule that made companies
disclose the cost at the beginning of a call.
Along with these policies, Noam said companies were also squeezed (of course) by the rise of the internet in the ’90s. “When you could get all this information for free, why pay?” he said. “They were overcome by the better technology.”
In one of the final major blows to the industry, AT&T announced in 2002 that
it would no longer provide billing and collection services for 900 numbers. By 2012, Verizon had
become the last carrier that supported 900 numbers.
While the 900-number phenomenon came and, more or less, went in the U.S., Noam considers it a pioneering business. “We should pay some respect to them,” he said.
