Caller ID was invented by Carolyn A. Doughty. She patented the invention on April 15, 1986 with AT&T Bell Laboratories listed as the assignee. In 1987, New Jersey became the first state to offer Caller ID. The phone company, New Jersey Bell, offered it to try and boost their earnings from their investment in new high-speed network signaling systems. The new systems use a separate call data circuit based on the SS7 standard to handle the setup, termination, supervisory data, and other data concerning a call. This new system is better able to process large volumes of calls and eliminates some types of toll fraud.
Before SS7, telephone companies relied on ANI for billing purposes and the information they received was only given to certain authorized parties, such as 911 services and law enforcement agencies. These agencies still use ANI since it delivers the number even when the caller has blocked their number from CID.
With the new SS7 system in place, it was practical to send the party’s identification through the telephone network to the central office serving the calling party. This practice is referred to as Calling Party Number Message (CPNM). This information includes the party’s number and whether or not they want that number blocked from caller ID. Regardless of whether or not the number is blocked, the CPNM is sent out. This brought up the issue of privacy.
Consequently, the process of offering CID to other states was slowed down by privacy advocacy groups who claimed CID was an invasion of privacy. This led to the development of a set of standards for caller ID, which was established in 1994. These standards required that the caller’s number went into a switched network and that companies had to offer call blocking on a per call basis. Although the CPNM is still delivered to the final central office, the number is blocked and the CID message is marked as private.