Wide Area Telephone Service

Wide Area Telephone Service (WATS) was a flat-rate long distance service offering for customer dial-type telecommunications between a given customer phone (also known as a "station") and stations within specified geographic rate areas employing a single telephone line between the customer location and the serving central office. Each access line could be arranged for outward (OUT-WATS) or inward (IN-WATS) service, or both.

WATS was introduced by the Bell System in 1961 as a primitive long-distance flat-rate plan by which a business could obtain a special line with an included number of hours ('measured time' or 'full-time') of long-distance calling to a specified area. These lines were most often connected to private branch exchanges in large businesses. WATS lines were the basis for the first direct-dial toll-free +1-800 numbers (intrastate in 1966, interstate in 1967); by 1976, WATS brought AT&T a billion dollars in annual revenue.

For outbound calls, the 1984 AT&T divestiture brought multiple competitors offering similar services using standard business telephone lines; the special WATS line was ultimately supplanted by other flat-rate offerings. The requirement that an inbound toll-free number terminate at a special WATS line or fixed-rate service was also rendered obsolete by the 1980s due to intelligent network capability and technological improvement in the +1-800 service. A toll-free number may now terminate at a T carrier line, at any standard local telephone number or at one of multiple destinations based on time of day, call origin, cost or other factors.

For Outbound WATS, the United States was divided into geographical Bands 0 through 5, relative to the purchaser. Band zero was intrastate calling and bands 1 through 5 (or 6) were interstate calls that were progressively further from the originating number. Historically, the higher band number carried a higher price per month or per minute. These lines could be used for outbound long-distance only; not local. In the U.S., interstate WATS lines could not be used for intrastate calls, and vice versa. With wider availability of inexpensive long distance using regular business lines, OutWATS service became obsolete late in the 20th century.

...
Wikipedia