http://www.sexuality.org/l/workers/phonesex.html
FAQ
What is phone sex? Let's define phone sex as a telephone conversation between two or more people whose object is to arouse, titillate and stimulate the caller or callers, hopefully to the point of orgasm. Some have described phone sex as guided masturbation fantasy. If that definition works for you, be my guest. A phone sex conversation may start out on a simple conversational level, but by mutual consent and expectation it will move into an erotic area. You might describe phone sex as an interactive erotic audio fantasy. The conversation is generally (but not always) explicit and hardcore. It is not generally a prelude to a face-to-face meeting.
http://www.echonyc.com/~women/Issue17/boon.html
The first commercial phone sex lines, which appeared around 1980, were relatively simple from a technological point of view: a consumer called a number advertised in a magazine (the first advertisements appeared in the back of the Village Voice in 1981, and in the New York Native in the late '80s)
http://www.lukeford.com/stars/male/jeff_goodman.htm
There was no way to make money off of phone calls until 1983 and the development of 976 numbers. When it started, Ruderman had a virtual monopoly in that business. That man made tens if not hundreds of millions of dollars in a couple of years. He was the only player. Then a million people descended, doing sportslines and things like that. But they allused the structure of these 976 lines. Eventually it changed into the 900 call system."
http://www.lukeford.com/stars/female/gloria_leonard.htm
Phone sex took off in 1983, with Gloria Leonard and High Society magazine leading the way. "We owned these 976 phone lines…that were used until then for weather, sports….Dial a prayer. Dial a joke…. We tried to figure out how to make some money off the lines. At first we simply used them to announce the contents of our coming issue. Then we wrote sexy scenarios [jerk-off routines] which the centerfolds recorded."Jeff Goodman, Gloria Leonard (porn star), Carl Ruderman (publisher)
http://archive.salon.com/col/weav/1998/09/nc_09weav.html
Talking dirty : A PHONE SEX WORKER REVEALS HER TRADE SECRETS.
http://archive.salon.com/col/weav/1998/09/nc_16weav.html
976-UGLY : IN PART TWO OF A CONVERSATION, A PHONE SEX WORKER TALKS ABOUT THE DARK, DISTURBING SIDE OF HER BUSINESS.
http://archive.salon.com/weekly/courtney961021.html
Unzipped : the Truth about phone sex