Some things haven't changed in telecom contracting over the course of a century

The following is a guest post by LB3's Hank Levine.

Readers of this blog know that LB3 and TechCaliber specialize in helping enterprise customers negotiate agreements for telecom services. They may not know that my [hopelessly nerdy] hobby is collecting books and other material from the dawn of the telephone era -- the years immediately after Alexander Graham Bell famously fetched Watson with a few shouted syllables in 1875.

Last weekend vocation and avocation came together when I happened upon a contract for telephone equipment and service between New England Telephone and the Town of Milton, Massachusetts. It was a three-year deal for four metallic circuits and 12 "suitable iron boxes," each equipped with a magneto transmitter and hand telephone and connected to one of the circuits. NET agreed to furnish and set up the required central office switches, and operate the gear for the town to use as a Police Signal System.

Nothing out of the ordinary here, unless you count the fact that the contract was executed on May 1, 1890, almost exactly 120 years ago.

Cool, of course. But also depressing in a way, because a surprising number of the agreement's terms and conditions are both tilted in favor of New England Telephone and sound familiar today.

For example, under the Milton-NET contract, the customer agreed "to hold harmless the [telephone company] from any and all claims for loss, cost, damage or expense in any way due to or caused by the lines and other apparatus herein leased to" the customer -- even if the claim grew out of something NET did, not an action or failure of the customer. For over a century the courts have been ruling that carriers cannot try to exempt themselves from the consequences of their own willful misconduct or gross negligence, but carriers still routinely try to shift the expense and risk of their own misconduct to their customers.

Another parallel: "No business is to be transacted by or through [the lines or instruments] for any consideration or toll to be paid by other persons than the [customer] or other parties named, nor shall business messages, market quotations, or news for sale or publication, or messages in respect of the transmission ... of which any consideration or toll is to be paid by any other person be transmitted over such line." In other words, no resale or shared use. In the intervening century the FCC ruled that this was anticompetitive, but with deregulation such provisions have reappeared in carrier agreements.

The news is not all bad. The Milton-NET contract included a separate agreement with American Bell Telephone Company to cover the instruments. It provided that "upon nonpayment of any sum due, or any use of the instruments ... improper or contrary hereto, or any removal therefrom, the [telco] may terminate the subscriber's rights by written notice served on him or any occupant of the premises, and sever his wires and connections and remove the instruments..." We've progressed in the last century -- today, you get a 10-day disco notice before the line goes dead.

And lest you think that people just started negotiating deals in the last 20 years, or just started using credits as a way to close a deal, letters accompanying the contract reveal that NET's initial offer was $480 per year on a three-year contract (paid annually, one year in advance) and $380 for a five-year contract. But the town balked, and NET sweetened the deal: if Milton entered into a three-year deal and then renewed it for two more years, "the Telephone Company will make the rate for the whole time as if the contract was originally made for the term of five years; giving the Town credit for the amount over-paid during the first three years."

The contract doesn't say that in the event of a dispute the town will be responsible for the telco's attorney's fees plus interest, or that force majeure events like hurricanes, fires or crimes will excuse the performance of the telco but not the town. Those terms came later, proving (I guess) that 'progress' does indeed come with time ...