Were you on a party line (as a kid) John?
We were on a party line when I was a kid - about 10 houses on that line if I recall correctly. Each house had their own distinct ring. Sometimes you'd pick the phone up to see if you could make a call and someone would get a little upset that you had interrupted their call. Other times you'd be on a call and someone would pick up their phone and interrupt your call.
Our number worked the same - dial the last four digits and you could call anyone in the area. Long distance was expensive though and we couldn't call many of our friends (same school) because they lived outside the local area. A lot of them lived less than 10 miles away, but it was a long distance call.
We found a work-around though - you'd call someone in your area but almost outside of the area, then they would call the person (who wasn't outside their area) and relay the message.
It wasn't a big deal though - as my parents only allowed 10 minutes of phone usage per day. And the minutes did not roll over to the next day if they weren't used.
Besides, gas was so cheap it was usually less expensive to drive the 10 miles or so.