The first on site customer systems was the PBX, but later on in the 1920s into the 1930s, brought a specific solutions to customers, called the Key Telephone System.
The “key” to this was to have hard wired lines for users who wanted to get to someone directly. This also fused with Intercom systems, acting as a separate “service” for the time. Intercoms for this context was a private circuit to enable telephone calls to work within the system. Most often, the Intercom line was on the fifth button of say a 564 telephone.
Key Telephones were almost like the SIP telephones of yesteryear. As the 1950s into the 60s came along the phrase “Mr. Jones, you got a call on Line 1” became the catchphrase. These types of phones would be hardwired to specific telephone lines, whether they were the aforementioned Intercom, or lines coming from a Centrex or PBX service. Sets that were seen often were the Western’s 564, clones by ITT or Kellogg, or multi line sets ranging from 10 to 30 lines, and the infamous Call Director set made by Western.
These push-button telephones typically required a user to hit the line button before making a call. This opened the line to make the user make their needed call. If no button was depressed the phone wouldn’t produce a dial tone. Secondly, on many of these push-button multilines, the red Hold button really acted as a mute button. If you hung up the phone, the call could be disconnected. Hence the reason why the hook on the telephone was designed in a specific way seen below
By the 1970s, the same rise of transistors and integrated circuits made their way, enabling them to be electronic. Most customers held onto their 2564s or 564s or Call Directors for at least another decade till the introduction of systems such as Nortel’s Vantage, Mitel’s SX-50 and AT&T’s Merlin. By the 1990s, the decline of these telephones went on the rise while many domestic and foreign companies like NEC (that bought Nitsuko that in turn bought TIE), Siemens and Panasonic all got into the very lucrative business of small workgroup phone systems. In the 1990s, small businesses in the United States accounted for 80% of the economy.
KTS systems and Key Service Units merged as the rise of electronic key systems got into the market. This made small end systems function more like PBX systems (but if you still wanted to pick up the phone and get a dial tone from the central office, it was still an option). Also the rise of these modern Key systems enabled customers to not only have the option to “dial 9” or have calls route to a certian trunk group, but also have the flexibility of having more lines than phones or vice versa depending on the case (which this enabled small call centers.) More on this in the Key Service Unit article.
In the modern PBX world, it’s equivalent to hard wired lines is “bridged appearances” or personal trunk lines.