1-(700) Killed Tie
Tie-lines were operated by every major company in America by the 1970s. They were bypassing the long distance network, are costing the Bell System vast amounts of money, and had become very costly to install and manage. By some estimates, up to half of all circuits in the nationwide network had become private lines (largely because of data, but that is another story.) 
Billy Oliver was the Vice President of Engineering at AT&T Long Lines. He was a visionary, a clear thinker, and a pragmatist. He invented 800 service (See my other posting) and he pressed for the 4ESS toll switching system to be developed on an urgent, crash basis. His priorities included developing viable echo cancellation units for satellite circuits and the ACS “Advanced Communications System” which was hoped would become what we know today as the Internet.
Billy Oliver realized that tie-lines and private lines were eating up capacity from the Bell System. He also realized that they only needed to be utilized about 3~5 hours a day to be cost effective. So private lines were utilized just 4 hours a day while Bell’s own lines typically received 10 hours a day of use. This was a very inefficient use of facilities. And, the problem was worsening.
The answer was to be 700 service. Area Code 700 had been jealously guarded and kept out of service for the day when something truly special was needed. That day had arrived.
The idea was to build a system similar to Sprint & MCI where customers could hop onto a private network (that would be operated by the Bell System). An employee of a company would dial 9 for an outside line, then dial area code 700 and then a 7 digit number. The 7 digit number would be translated uniquely for each subscribing company. So, for Apple 700-222-3333 might be extension 3333 at Austin, but the same number might be a plant in Renton for Boeing. The CallerID would be used to select the correct translation table.
Instead of physical tie-lines, virtual facilities would be sold. A company would still pay the $1,000 a month for a line between Las Angeles and San Fransisco. But there wouldn’t actually be any facility built out. Instead, the call would be routed over the same public switched network as other long distance calls. The company would pay the same flat rate for unlimited use. But in actuality the facility would be shared. Software in the switching system would count the number of concurrently used connections to simulate the private lines and to limit service to being no better than physical lines.
For the Bell System this was an enormous win. They could utilize all of those facilities in the evenings and whenever the company wasn’t using them. By co-mingling private and public facilities greater total utilization was to be achieved. To the company, facilities could be added almost instantly between any two points. And, no longer would the company need to test every circuit on a regular basis. Expensive switches could be eliminated. It was simpler and cleaner and easier.
So the basic idea was this: The 700 area code would mean something different to every company. Any company could define the dialing pattern for this area code. And, the private line network was simply virtualized. No longer was there any need for dedicated circuits. Of course, if a company wanted a physical circuit for some reason they could terminate one, but why?
Unfortunately, the timing was poor. The capabilities of 700 service just started rolling out in the early 1980s and in 1983 the Bell System was divested and smashed into pieces. Long Distance was to be competitive. The reasons for having private lines was about to go away. And, many of the critical 4ESS switches would be transferred to the RBOCs, out of the control of AT&T who would retain the nationwide network. 700 service mostly fizzled.
Tie-lines were soon dead.