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The phone is a pay phone on Sesame Street, located in front of the Fix-It Shop. It has a mind of its own in a 1984 episode, when it rings on its own and talks to Bob, saying that it's the phone and not anybody else. He offers to give Bob the time, but ends up providing a joke instead. Afterwards, he promises to give the real time, by providing four loud chiming sounds to indicate that it's four o'clock.
The phone returns at the end of the episode, to remind Bob to announce the sponsors.