Paul, my LIFE is FUBAR right now
Sometimes you can feel that just being SNAFU'd would be an improvement!
Of course, you still had to do a 10-digit dial if you were calling another region of the state. (Never understood that...)
It's related to the point I made in my initial post about area codes originally (and indeed right up until 1995) having a middle digit which was always 0 or 1.
WARNING: Another lengthy discourse follows! 
If you really want to get the best understanding though, you need to appreciate the numbering history involved. Let's go back to the 1940s when the area codes were planned. At that time, local numbers in the U.S. were of varying lengths. Small towns and rural areas could have 3- or 4-digit numbers, larger places were 5- or 6-digit numbers, and the major cities used 7-digit numbers.
It was the convention for 7-digit numbers to be expressed as a combination of letters and numbers, because in the early part of the century it had been thought that seven numerical digits would be too much for the average person to remember. Thus 7-digit cities had numbers such as
ADams 2-3456 or
MAin 9-1234. In telecom circles we often refer to this as a 2L-5N numbering scheme, the meaning of which should be obvious. Of course, as far as the telephone equipment is concerned those numbers were just 232-3456 or 629-1234; the names/letters were purely for human convenience. The first three digits (i.e. the two letters and the first number) still identified the central office within the city or area, just as today.
Digressing a little, but a small number of American cities had actually used a 3L-4N system initially (as did London at one time), but converted to 2L-5N in later years as it made it easier to select suitable names. New York is one such example, and in fact you can see the legacy of this in the phone number made famous by Glenn Miller's recording. Originally, the number had been
PENnsylvania 5000, then when NYC converted to 2L-5N in the early 1930s it became
PEnnsylvania 6-5000. (Today, of course, it's just expressed as 736-5000, and it still belongs to the same hotel!) Many of the 6-digit towns in the 1940s also used letters for the first two digits (such as Washington, D.C.), and even some 5-digit places used a single letter for the first digit!
Anyway, by the late 1940s when the area codes were planned, 2L-5N had become the norm for 7-digit cities, and it was decided that for nationwide long-distance dialing
all local numbers should be made up to 7 digits, using the 2L-5N format. This would allow a consistent 3-digit area code plus 7-digit number for all calls.
Now, zero as the first digit goes to the operator, and for reasons I won't go into here, since the early days of dial telephones it had been the convention to avoid subscriber numbers starting with a 1, which is why the letters only appear on the digits 2 through 9. Obviously then, if you are dialing the first
two digits of a local number as letters, that means that the second digit cannot be 0 or 1 either.
You should be able to see where this is heading now. By using area codes which
always had 0 or 1 as the middle digit, it became easy to distinguish between a 3-digit area code and the first 3 digits of a local number, and that's precisely why area codes were of this form (right up until 1995).
Back when DDD was first implemented, "1+" dialing (i.e. dialing 1 first for long distance) was
not part of the overall plan. In many places you dialed
just the area code plus number for a call to another area code, and
just 7 digits for a call within your own area code, regardless of whether it was local or toll. That was the way those first customers dialed long-distance calls from Englewood, N.J. in 1951, and in fact was still the norm in a lot of places right through to the 1970s/1980s.
So, if you picked up your phone in Manhattan and dialed 753, the equipment could tell immediately that it was a number
within your own area code, and would then wait for the last four digits before connecting to the appropriate place (in this case to
PLaza 3-xxxx). On the other hand, if you picked up and dialed 713, the registers in the central office could tell from the middle digit that this was an area code, and would then wait for another full seven digits before sending the call over the long-distance network (in this case to southeastern Texas).
So, where did the 1+ dialing come from? Originally, it was to do with the type of switching equipment used in certain places which made it impractical to route the call based upon whether the second digit dialed was 0/1 or not, so it became necessary to dial a prefix digit before all long-distance calls to correctly route them. Thus in many places the dialing rules became:
Local call - Dial just seven digits.
Toll call within your own area code - Dial 1 + seven digits.
Toll call to another area code - Dial 1 + ten digits.
(In fact in the early years some places used 112 or other codes instead of just 1, but that's by the by.)
The initial 1 simply told your local central office equipment to send the call to its tandem, the next link along the chain which handled all toll/long-distance calls. That tandem could then still look at the second digit to distinguish between an area code or a prefix within its own area code.
O.K., are you all still awake at the back there? Good!
This all worked fine so long as area codes always had 0 or 1 as the middle digit, and the second digit of a local 7-digit number was
never 0 or 1, which of course it couldn't be with a 2L-5N scheme.
During the 1960s/early 1970s, most areas dropped the 2L-5N convention and switched to expressing numbers in the modern form as just seven numerical digits. That allowed much more flexibility to introduce prefixes which were otherwise very difficult if not impossible to devise meaningful names for given the letters associated with them, such as 55x, 95x, 99x, and so on.
In most places there were sufficient spare numbers to last for many more years, but eventually it became necessary in some areas to start assigning numbers which had a 0 or 1 middle digit. Los Angeles was the first city to do this as early as 1973, followed by New York around 1980. It become more widespread during the 1980s as demand for numbers increased, particularly as area code splits were on the increase by the late 1980s and it was becoming evident that all the existing-format area codes would soon be used up, thus making it something of a priority to make the best use of numbers within an existing area code.
The clash between area codes and local numbers then arrived everywhere in the "reverse" form in 1995, when area codes which have some middle digit other than 0 or 1 started to appear (the first being 334 for southern Alabama).
In the areas using N0X/N1X prefixes prior to 1995, and for everywhere after 1995 when the new style area codes came into use, the old 1+ dialing rules wouldn't work anymore.
To take Vermont as an example as it prompted this epic post, you could not dial 1 plus seven digits for a call within the state anymore. Suppose you were somewhere else within the 802 area code and wanted to call 334-6719, which happens to be Newport, Vt. Under the old scheme you'd dial 1-334-6719, as it's a toll call from where you are. Problem is, since 334 is now also a valid
area code there's ambiguity. The equipment doesn't know if you really want to call Newport, Vt. or whether you've started to make a call to 1-334-671-9xxx in Dothan, Alabama and just haven't finished dialing the last three digits yet.
There are two ways to change the dialing plan to get around the problem.
The first is to drop the 1+ for long-distance calls within your own area code. The rules then become:
Call within your own area code, whether local or toll - Dial just seven digits.
Calls to any other area code - Dial 1 + ten digits.
Now the equipment "knows" that if you dial a 1 first then there will be ten digits following, the first three of which will be an area code.
In some states, however, it had become the rule that 1+ should be required for all toll calls, which means this scheme can't be employed. The second method, therefore, consolidates the requirement to have 1+ for all toll calls with the technical need to have 1+ indicate that a full ten-digit number follows. That's how you then end up with:
Local calls - Dial just seven digits.
All toll calls whether in own area or not - Dial 1 plus ten digits.
You'll now either understand the requirement to dial your own area code sometimes, or you'll be sound asleep!
