All this made the phone company a perfect target for mockery. In 1967, for example, the satirical comedy The President’s Analyst starred James Coburn as Dr. Sidney Schaefer, the president’s psychiatrist. A target for every spy agency on the planet, Schaefer goes increasingly crazy himself, reeling from one paranoid situation to another until he is finally kidnapped by the largest, most diabolical organization of all: The Phone Company—or TPC—which is run by a “robotic man in a three piece suit.” As one reviewer wrote at the time, “I find it hard to fault a writer who has the gall to make the phone company his villain.”
Then, two years later in 1969, Lily Tomlin introduced a new character to her comedy repertoire: Ernestine, a prissy, officious, nasal-voiced telephone company employee. Sitting before a switchboard on the controversial Laugh-In television show, Ernestine tormented famous personalities of the day, including “Mr. Milhous” (Richard Nixon), “Mr. Spiro” (Spiro Agnew), and “Mr. Hoover” (J. Edgar Hoover), her punch lines emphasized by her famous snort. “If we do not receive payment within ten days,” she advised a “Mr. Veedle” (Gore Vidal) in one skit, “we will send a large burly serviceman to rip [your phone] out of your wall. I’d advise you to lock up the liquor cabinet, he’s a mean drunk. Now, Mr. Veedle, wouldn’t you rather pay than lose your service and possibly the use of one eye?” Ernestine struck a chord not just with the public but also with the telephone company’s rank and file, and she hit a nerve with their higher-ups too. Telephone operators in Southern California made Tomlin an honorary operator and presented her with a trophy, the Cracked Bell Award. “They love the character, Ernestine, but they said the phone company is a little uptight,” Tomlin told newspapers at the time. A few years later, in a fake television commercial shown on Saturday Night Live, Ernestine captured the telephone company’s perceived incompetence—“You see, the phone system consists of a multibillion-dollar matrix of space-age technology that is so sophisticated even we can’t handle it”—and immortalized its perceived arrogance with the motto “We don’t care. We don’t have to. We’re the phone company.”
So, sure, lots of people disliked the telephone company back in 1970, Fierstein included. But what on earth did making free phone calls have to do with opposing Abbie Hoffman’s enemy—that is, the United States government—and ending the war in Vietnam?
The answer lay in something called the telephone excise tax. Way back in 1898 Congress legislated a special tax on long-distance telephone calls to help fund the Spanish-American War. Although the tax has come and gone several times since then, it’s come more than it’s gone, and somehow it always seemed to be around whenever we were fighting a war. World Wars I and II both had their telephone taxes and Vietnam was no different. The 10 percent telephone tax was added to your telephone bill and collected by the telephone company, who in turn handed it over to the government. The feds netted more than $1.5 billion from the telephone tax in 1971, enough to cover about 10 percent of the costs of the Vietnam War that year.
So, the theory went, deprive the Bell System of long-distance revenue and you deprive the United States of telephone tax revenue that it needs to send young men off to fight and die in Southeast Asia. See? You can make free phone calls and feel good about it.
Fierstein recalls that, as a result of his discussions with Abbie Hoffman, “We decided that I would start a newsletter and I would introduce the newsletter to the antiwar community by distributing leaflets at the May Day demonstrations in Washington, D.C. So I took a bus down there, armed with a stack of a few hundred leaflets entitled ‘Fuck the Bell System,’ and putting in the connection between technology and many other cultural issues of the time, not just the war but racism, sexism, etc., worker conditions at big corporations, particularly Ma Bell.”
“The response was, we got a few, I don’t remember, maybe high dozens, maybe couple of hundred responses to our initial leaflet,” Fierstein says. He started selling cheap subscriptions—$1 per year—to the YIPL newsletter. YIPL served as a bit of a Trojan horse, he recalls. “One of our main efforts was to try to make the average person who hated the phone company identify with that particular rallying point and use that as a way to sweep them into the exposure to countercultural ideas about these other subjects, you know, women’s liberation, etc.”
YIPL’s first issue premiered in June 1971, with Fierstein writing under the pen name “Al Bell.” Black and white, four pages long, its articles explained how to hook up extension telephone lines yourself (no need to pay Ma Bell an extra monthly charge) and how to make a simple circuit to conference two telephone lines together. It concluded with a bit on the telephone excise tax and War Tax Resistance, a group that sought to convince Americans not to pay war-related taxes.
The front-page story of YIPL’s first issue was titled simply “The Credit Card Code” and it told how to make free phone calls using made-up telephone credit card numbers. Telephone credit cards? Remember, it’s 1971, and cell phones haven’t yet been invented. But people still need to make phone calls when they’re out and about. This, of course, is why God created pay phones. Long-distance phone calls are expensive, though, and if you’re a traveling businessperson you’d prefer not to carry around $45 in coins in order to call your customers and home office when you’re on the road. What to do?
AT&T’s answer was the telephone credit card. This wasn’t a general-purpose credit card like those offered by Visa (then BankAmericard), MasterCard (then Master Charge), or American Express but rather was a credit card that could be used only to make telephone calls. You’d call the operator and ask to make a credit card call. She’d ask for your telephone credit card number, place the call for you, and then write up a billing slip. The cost of your call (plus a convenience surcharge) would eventually get added to your monthly telephone bill.
Telephone credit cards were big business for AT&T. During the month of March 1970 the telephone company billed almost $40 million in credit card calls. That’s a tasty little revenue stream, and it’s tastier still when it’s growing at almost 10 percent a year.
Unfortunately for AT&T, almost a million dollars a month of these billings were “uncollectible.” Uncollectible is one of those pleasant business euphemisms that means somebody is stiffing you for something. Sometimes customers don’t pay their bills. Sometimes operators make mistakes, maybe writing down the wrong billing information. But the lion’s share of uncollectibles was due to credit card fraud—people intentionally using bogus credit card numbers to make free phone calls. And the uncollectibles problem was rapidly getting bigger. Between 1966 and 1970 the percentage of uncollectible credit card revenue had increased 320 percent, and the pace was accelerating; the uncollectible percentage doubled in just one year between 1969 and 1970.
This runaway growth in fraud was possible because AT&T’s credit card numbering system, securitywise, was a bad joke. In 1970 a telephone credit card number consisted of a single letter followed by a seven-digit telephone number followed by a three-digit “revenue accounting office” (RAO) code. The RAO code was fixed for each area of the country. For example, anybody who lived in the San Francisco Bay Area would have a credit card number that ended in 158. The letter that started a credit card number was the same everywhere in the country and it changed just once a year; the letter for 1970 was “S.”
The upshot was that if you were only slightly craftier than the average houseplant, you could conjure up AT&T credit card numbers out of thin air. Perhaps you’re a radical Yippie pinko who wants to annoy the local FBI office by sticking them with your long-distance telephone calls. Let’s see, the FBI’s number in San Francisco is 552-2155. Pick up the phone. Dial zero. “Hi, operator, I’d like to make a credit card call. My credit card number is S 552-2155 158 . . .” You get to talk to your friend and the FBI foots the bill; the left-wing Students for a Democratic Society did just this in 1973.
If that wasn’t easy enough, a handful of bogus credit ca
rd numbers attained national prominence via radio programs and newspapers, especially college and underground newspapers. Starting in late 1966 a story popped up that would be repeated over and over in various forms, that the actor Steve McQueen (or Paul Newman or Sammy Davis Jr., depending on the story) had gotten into a fight with the telephone company. According to one version of the story, McQueen had won a million-dollar judgment against the Bell System and wanted to share the bounty, so he took out a newspaper ad and gave out his telephone credit card number, encouraging students and military servicemen to use it up. Another version had it that he had lost his battle with the telephone company but, refusing to give in, had taken out an ad in the newspaper giving his telephone credit card number to all and sundry; he would then refuse to pay the bill, sticking the phone company with the losses. A spokesman for McQueen stated, “Steve doesn’t recall ever having a phone credit card. Besides, no man in his right mind would give out his credit card number.” Still, both versions were great stories, and, like other urban legends, the fact that they weren’t actually true didn’t stop their spread. AT&T memos show that by 1970 more than a million dollars’ worth of fraudulent calls had been billed to the two credit card numbers most commonly associated with the McQueen-Newman-Davis Jr. stories.
The utter lack of security in its credit card numbering system, coupled with the exponential increase in fraud, was not lost on the telephone company. “It is evident,” a 1970 AT&T memo noted dryly, “that past endeavors to abate uncollectible losses have failed or have proven to be ineffective.”
AT&T’s solution was to introduce a new credit card system, one that would be harder for the bad guys to crack. The new, fraud-resistant 1971 credit card code looked like this: a seven-digit telephone number followed by a three-digit RAO code (same as last time) followed by the Big Secret: the “check letter.” The check letter was the thing that allowed the operator to know if a credit card number was valid. It was the magic that would solve the fraud problem.
The Big Secret was that each year AT&T would chose a particular digit position—in 1971 it was the sixth digit in your telephone number—and that would serve as an index into a table of ten letters. For 1971 the letters, in order, were “QAEHJNRUWZ.” If the sixth digit of your phone number was a 1, then the check letter was Q. If it was a 2 the check letter was A. And so on.
Obviously, protecting the Big Secret was key. “It is necessary that all employees in all departments understand the importance of protecting the integrity of the new credit card plan,” read an AT&T memo. “Further, it should be made clear that under no circumstances should an employee disclose the characteristics of an acceptable credit card number to any unauthorized person nor should an employee ever divulge to a customer how she knew that a credit card was invalid.”
The problem with the credit card code’s Big Secret was, of course, clever people. If it’s simple enough for operators to be able to figure out on the fly, it’s simple enough for phone phreaks—or anybody else who was interested—to reverse engineer with a little bit of time, energy, and effort. While the network explorer type of phone phreaks may have looked down their collective noses at making fraudulent credit card calls, Bill Acker allows that they worked out the telephone credit card code each year just for fun, just by using pencil and paper and studying credit card numbers. It was, after all, both telephone-related and a challenge, so the phreaks went after it the same way others might solve crossword puzzles. But, Acker says, “With all the electronic means we had to get there, you don’t need to mess with people’s phone bills to make a free call.”
Unfortunately for AT&T, the world is not made up of technically minded highbrow phone phreaks like Bill Acker; most people interested in the credit card code wanted to make free calls, plain and simple. The switch to the new credit card system was scheduled for December 1, 1970. The first underground and college newspaper articles appeared with the new credit card code just two months later. By April 1971 Abbie Hoffman was being interviewed on New York City’s WNET-TV, channel 13, promoting Steal This Book. He read directly from his book into the camera: “This is going to be a public disservice announcement,” he told his viewers. “To make your own credit card numbers, the 1971 credit card consists of ten digits and a letter. The first seven digits comprise any New York City telephone number. The phone company will bill this number, so make sure the number you use is nonexistent or the number of a large corporation. The next three digits are the credit card code. For New York City it’s 021. The letter is based on the sixth digit of the phone number. If the sixth digit is one, then the letter is Q. If it’s a two, it’s A . . .” Hoffman went through the complete list and concluded, “For example, for New York, you would dial 581-6000-021-Z and Channel Thirteen would pick up the bill.” The host of the TV show quickly disclaimed responsibility for this idea.
YIPL’s first issue set the tone of the publication and subsequent issues offered a similar blend of technological hackery, countercultural politics, and antiwar and antigovernment rhetoric, all sprinkled with goofy illustrations. “I can’t draw very well, as you can see from the first few issues,” says Fierstein.
YIPL’s second issue in July 1971 led with a tutorial on the blue box—what it was, how it worked, and how to use it. Inside it reprinted an open letter from the New York Times columnist Russell Baker in which Baker suggested that the Yippies’ hatred of the telephone company was misplaced; on the opposite page, YIPL published a rebuttal from Hoffman that ended with, “Until AT&T and the other corporations really become public services rather than power and profit gobblers, we’ll continue to rip them off every chance we get. If you want to discuss this further, call me up some time. Because of all the agencies claiming to have me under surveillance, it’s one of the fastest ways to speak directly to your government.” Issue no. 2 also introduced the first version of what would eventually become YIPL’s icon: the classic bell-shaped Bell System logo but one with a Liberty Bell–style crack in it.
Issue no. 3 in August 1971 raised the price of a subscription to $2 a year—“the best thing you can buy for two bucks,” it proclaimed. Despite the price increase, the issue itself was thin on content, exhorting readers to send in information. “We tried to enlist, as much as possible, people to send in their own ideas because I had a limited amount of information I could write myself,” Fierstein says. As YIPL got going, readers supplied letters, tips, ideas, technical information, and even finished articles; Fierstein did pretty much everything else himself. “I got friends to help fold newsletters,” he says, but “ninety-five percent of it was from me, probably more than ninety-five percent, for the first twenty or thirty or forty issues.” He continues, “I really did it all, I did the whole thing for many, many years—four years. It was a lot of work . . . I lugged the newsletters back from the printer, I brought the copies to the printer, I would paste them up, I would do everything.” Still, he felt, it was worth the effort. “Every time I received a letter where people said they supported us, or someone would say, look, I really don’t have much money but I’m enclosing a dollar to help the cause . . . I mean, it was so pathetically generous, a small amount of money but from someone who couldn’t afford much.”
YIPL grew rapidly, reaching a peak of between two thousand and three thousand subscribers. “We were caught between being smaller and wanting to be bigger,” says Fierstein, “but at the same time not wanting to be so big that there would be an incentive for the phone company to act on us.” There was, of course, no way to keep YIPL’s existence secret from the telephone company, and soon Bell Labs, AT&T, and the various telephone operating companies had purchased subscriptions—usually using assumed names and employee home addresses. By 1972 YIPL had become sufficiently prominent that AT&T security chief Joseph Doherty sent a memo to his security agents: “As you are aware, efforts are continuing to effectuate deterrent actions against publications which print detailed instructions regarding methods to commit t
oll fraud. It has been alleged that information published in the Youth International Party Line (Y.I.P.L.) newspaper was a source document for some acts of fraud. It would be helpful to acquire evidence to substantiate this allegation. Therefore, it is requested that signed statements (attesting to source of information) be obtained from fraud perpetrators who admit acting to defraud the telephone companies based on information appearing in the Y.I.P.L. newsletter.” YIPL obtained a copy of this memo and printed it the next month.
Although Fierstein did worry that the phone company might try to shut him down, his spirits were buoyed by an ace in the hole. “Abbie lent us his lawyer Jerry Lefcourt,” Fierstein recalls. Lefcourt was a young firebrand who had made a name for himself as part of the defense team for the Chicago Seven, a group of antiwar protesters (including Hoffman) who had been arrested for conspiracy and incitement of riot in 1968. “He promised to defend us in the unlikely event that the phone company would ever prosecute us and elevate our minuscule presence to a large-scale story, which we didn’t feel they would want to do.”
Exploding the Phone : The Untold Story of the Teenagers and Outlaws Who Hacked Ma Bell (9780802193759) Page 22