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800-Line Phone Ties May Be Linked With Homes

June 18, 1989|LESLIE CAULEY | Baltimore Sun

It may not be the answer for all that ails your long-distance bills, but it may come close: 800-line services for the home.

TelecomUSA, a long-distance services company based in Atlanta, is offering the nation's first 800-line service aimed specifically at the residential market.

Known as "Personal Hotline," the service allows consumers to phone home without using a credit card, operator assistance or even a quarter for the pay phone, said Clark McLeod, Telecom president.

2,500 Sign-Ups

So far, he said, about 2,500 residential customers have signed up for the service, which began in January and is available in every state.

"For the parents of a college student who makes a number of calls home, or even for the person who is operating a small business out of a home, this can help you save money and time," McLeod said.

Much like the toll-free services commonly used by businesses, the Personal Hotline accepts incoming calls only, at no charge to the caller. To call a residential 800 line, callers dial 1-800 plus the regular seven digits of the number.

The service is delivered to local residential phones through technology built into TelecomUSA's network, which it partly owns and partly leases from other companies. The toll-free, long-distance service is not intended to replace conventional phone service, which is not affected by the addition of the 800-service function, a Telecom spokesman said.

Customers are billed by TelecomUSA at a flat monthly rate of $2.75, plus 21 cents to 29 cents per minute for usage. A onetime installation fee of $10, which covers the cost of adding the service to the existing phone line in the home, is also required.

Far Below Major Companies

Those costs are far below those of the major long-distance companies, whose 800-service plans cost $50 to $100 to install and $10 to $20 a month, plus use fees, to maintain.

"It's certainly the most cost-effective 800 service of its kind," said Phil Freedenberg, president of Federal Engineering Inc., a telecommunications consultancy in Fairfax, Va. "I can see this being used not only by people with kids in college, but by people who run businesses out of their homes."

After surcharges are added, calls charged to calling cards typically cost about $2.50 each. Thus, it can be 30% to 40% cheaper to phone home on an 800 number than it is to use a calling card, McLeod said.

"If an individual makes three or more calling-card calls to home, then he's at a break-even point with this service," he said.

American Telephone & Telegraph Co., MCI Communications Corp. and US Sprint each offer an array of 800 services for business customers but none for the residential market.

Others Lack Incentive

The companies clearly have the capability--AT&T introduced 800 services in 1967--but so far they seem to lack incentive to develop an 800 product specifically for the residential market, which accounts for about 20% of their overall business.

Last year, about 2.1 billion calls were placed on 800 lines, virtually all business-to-business or customer-to-business calls.

TelecomUSA, which was created in December with the merger of SouthernNet Inc. and Teleconnect Co., is an independent telecommunications company that specializes in long-distance services for business and residential customers.

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