That is a misnomer. In the old days you subscribed to telephone service. That included the telephone line and one telephone. An extension cost $1 a month extra. So that $14,000 over 42 years was for the service not the leased telephone. There is no way they paid $28 a month for 42 years for a leased telephone.
The widely publicized calculation stems from a viral news story from 2006 involving a widow named Ester Strogen. Her family discovered she had been continuously
leasing two rotary dial telephones from AT&T for 42 years.
The total cost—which actually came out to
more than $14,000 by the time the lease was canceled—was calculated based on the following legacy telecom structure:
- The Monthly Fee: At the time her granddaughters discovered the charges, the ongoing leasing fee was $29.10 per month for the two outdated phones.
- The Math: Over 42 years (504 months), paying roughly $24 to $30 a month accumulates to between $12,000 and $14,600 ($29.10 × 504 months = $14,666.40).
Why did this happen?
Prior to the landmark breakup of AT&T ("Ma Bell") in 1984, consumers were legally
not allowed to own their phones; they were required to lease them directly from the phone company.
When the laws changed and phone ownership became legal, AT&T spun off its rental division into a company called QLT Consumer Lease Services. Millions of customers, particularly elderly individuals who were used to seeing a single unified phone bill, simply never realized that the small recurring "equipment lease" line-item could be canceled by buying a cheap phone at a retail store.
Yes, leasing absolutely cost that much in reality, and the math is entirely accurate. However, the calculations performed by the family did contain one major historical nuance:
they multiplied the final 2006 rate across all 42 years, which means the actual total cash paid out was likely a bit lower.
The original viral story focused on 82-year-old widow Ester Strogen from Canton, Ohio, who paid
$29.10 a month for two black rotary phones until her family intervened in July 2006.
The reality behind how the cost reached that staggering total breaks down into two distinct phases:
Phase 1: The Historical Base Rate (1960s – 1984)
When Strogen first got the phones in the 1960s, renting was a legal mandate and cost a fraction of the 2006 price—usually just a few dollars a month.
- The "Insurance" Mirage: In exchange for that fee, Ma Bell promised free, lifetime maintenance. If the phone broke, they replaced it instantly at no extra cost.
- The Cost-Plus Reality: Because these solid-state phones were built like tanks out of heavy plastic and steel, they almost never broke. Consumers paid a continuous premium for decades for a repair service they rarely used.
Phase 2: The Deregulation Rate Hikes (1984 – 2006)
After AT&T was forced to break up its monopoly in 1984, the rental side of the business was shifted to Lucent Technologies and later a legacy holding company. To maximize profit off a shrinking customer base, they steadily
increased the monthly rental fees over the next 20 years.
- By 2006, the rental cost had quietly ballooned to roughly $14.55 per phone per month.
- When the family discovered the $29.10 monthly charge, they looked back at the 42-year span and estimated the collective loss at over $14,000.
Even adjusted for historical inflation—where $2 a month in 1964 had the purchasing power of roughly $20 today—Ester Strogen and hundreds of thousands of other elderly Americans realistically paid thousands of dollars out-of-pocket for standard desk phones they could have purchased at retail for $10.