From the January 1998 issue of Startups

If you're like most small-business owners who run their shows from home, you need to be available all the time--no matter where you are. Pagers, cellular phones, e-mail, voice mail, fax machines . . . we have every tool imaginable to keep us in touch. With more homebased businesses than ever demanding a wider range of services, telecommunications companies large and small are preparing to do everything they can to lure those dollars to their pockets. But before we get into how they intend to achieve this, let's discuss why they're able to.


Cassandra Cavanah is a contributing editor of Portable Computing Direct Shopper magazine and has reported on the computer industry for eight years.

Get Into The Act

The biggest factor in the telecom companies' all-out war for business is the Telecommunications Act of 1996. This deregulation bill was enacted to increase competition between local and long-distance telephone companies by forcing the Baby Bells to open local markets to long-distance phone companies and vice versa--not to mention giving cable companies the opportunity to offer phone service. Such an agreement means there are more companies than ever vying for your business, so the innovations and price structures they offer promise to get more and more interesting.

Unfortunately, the promise of telecommunications deregulation has been more inspiring than the actual services making their way to homebased offices' doorsteps. The reason for the delay appears to be local Baby Bells' reluctance to initiate the competitive practices required by the Telecommunications Act.

According to the act, Baby Bells must prove they are receptive to competition and pass a 14-point checklist before the federal government will let them compete for long-distance service. The Bells are dragging their feet on some issues--and some are even fighting the law--claiming there's already plenty of competition in their local marketplaces. This has prompted several consumer groups to issue a statement demanding that the Bells adhere to the Telecommunications Act.

To compete with the big boys, some of the Baby Bells are teaming up, creating a "bigger is better" mentality. For example, Bell Atlantic joined with Nynex, and SBC Communications joined with Pacific Telesis to increase their geographical service regions and fight the major long-distance providers with greater force.

Because the regional and long-distance carriers are duking it out in the courts, many of the second- and third-tier players that don't fall under the deregulatory act are rushing in to fill gaps and offer pricing structures and innovations the big guys haven't thought of.

Single Scene

Fortunately for homebased businesses, fallout from the Telecommunications Act hasn't hindered some carriers' full-steam push into the homebased market. Perhaps the biggest buzz for home office users is coming from telecom companies' "single package" services. These packages bundle all your telecom needs (local, long-distance, paging, cellular, Internet access and so on) into one account. Not only can this type of service save you money and make paying your bills simpler, but it can improve your lifestyle and the way you conduct business by unchaining you from your home office.

MCI One, MCI's telecommunications package, is probably the most visible example of a single-package service. MCI One lets you wrap all your communications options--standard phone service, cellular, paging, Internet and e-mail--into one package with one bill. There are several noteworthy aspects of this service for home office users. Perhaps the most useful is the MCI One Number option, which can be programmed to call any one of three numbers before it sends your callers to voice mail or your pager. This makes reaching you wherever you are relatively painless. MCI One is fully customizable to your needs--you pay only for the products and services you need.

Of course, all these services come with a price. And, though MCI is extremely competitive in terms of local and long-distance calling, you should analyze all the costs (including its relatively high calling-card costs) before abandoning your current carrier.

Finding a provider that not only offers a good package but is reliable is also a must. "My last long-distance carrier went out of business, costing me a full day of business. I couldn't make long-distance calls--something that may have cost me clients and, ultimately, income," says Art Feinglass, owner of Mostly Murder, a homebased audience-participation murder-mystery company in New York City. After researching the long-distance climate, Feinglass switched to a new service that has lower long-distance rates and no minimum-charge or length-of-call requirements.

Get What You Need

The telephone is a home office's lifeline to the rest of the business world, but it is often the last thing homebased business owners think about. They tend to just extend their residential service by adding a call-waiting feature--until they realize this lacks professionalism. At that point, it's time to consider all your options and decide what services will benefit your homebased business the most.

First, analyze your needs: Do you use the Internet? Do you want to upgrade your access to Integrated Services Digital Network (ISDN) lines? Is wireless communication (pagers and cellular phones, for example) important to you? Do you call other countries? How much are you spending on local and long-distance calls? Do you use a calling card frequently?

A good place to start your research is the Web site for Washington, DC-based Telecommunications Research & Action Center (TRAC), http://www.trac.org . Here you'll find a checklist to help you pin down your needs. You can also use TRAC's WebPricer, an online service that helps users determine which long-distance company is the least expensive. Some carriers even offer better rates to homebased businesses. You can also order the Long Distance Comparison Chart for Small Business for $7 from TRAC. This chart offers an unbiased look at all the top long-distance companies and the services they offer.

Ron McDonald, homebased owner of international trading company Richardson International in Valencia, California, did some analyzing of his own and ended up switching to Telegroup, a second-tier long-distance service with international rates more than 35 percent lower than what he'd been paying. "Before, I had to schedule my calls to get the best rate--slowing down productivity while I waited for rates to drop," says McDonald. "Telegroup's rates are the same at any time of the day. Plus, they do six-second billing vs. full-minute billing."

Another big consideration for McDonald was calling-card rates. He'd been paying 75 cents every time he used his card plus higher per-minute rates. His new service doesn't charge a card usage fee, and the rates are comparable to calling from his home.

Still, McDonald notes there are a few disadvantages to using a smaller long-distance carrier, including difficulty reaching operators and busy circuits. Nonetheless, McDonald believes the pluses outweigh the drawbacks, especially when it comes to Telegroup's innovative International Call Back system. McDonald, who frequently travels to Asian countries, discovered that Telegroup will let him use a U.S. access number to get great international rates when calling home from other countries. "Before, if I called the United States from Vietnam using a local carrier, it would cost at least $2.50 per minute," says McDonald. "Now, I call an access number in the United States and let it ring once. I then get a call back with a U.S. dial tone and am charged at $1.39 per minute."

Full Speed Ahead

Voice capabilities are just one piece of the telecommunications puzzle. The transmission of data, whether it be faxes, computer files or e-mail, is becoming more and more important to successful businesses.

ISDN cabling is now standardized and reaching residential areas, giving homebased users the kind of data speed transmission larger companies already utilize. ISDN not only facilitates high-speed transmission of data--according to Southwestern Bell, an ISDN line can transmit a 240-page novel in about 90 seconds--it also allows homebased businesses to add multiple phone lines. One ISDN line can support three functions--standard phone service, fax transmission and Internet access--at once. If you're just beginning to expand your phone service, consider having an ISDN line installed.

Talk It Up

People tend to think of the Internet in terms of what it can offer them data-wise, from e-mail and file transfer to Web site downloads. What they don't realize is that the Internet can also handle voice applications. Several products have been designed to help people use the Internet as a long-distance calling network. What's great about this service is that you can talk to almost anyone anywhere in the world while paying just the basic rate to access your local Internet service provider. The drawback is that whomever you're talking to also has to be online to utilize the service. Internet telephony might not be all that glamorous right now, but companies that provide this service hope to change this.

International callers may have even more to look forward to in their call rates: Earlier this year, an agreement announced by the European Commission, which acts as the executive body of the European Union, outlined a plan to open global telephone competition beginning in January 1998. Monopolies have kept prices for long-distance calls high by overcharging long-distance carriers. The agreement will allow Europeans to freely access the telecommunications carrier of their choice by the end of the decade; it should also pave the way for more international business as international toll-free numbers become affordable, allowing U.S. companies to more easily do business with individuals residing in foreign countries.

As a homebased business owner, you can't ignore your telecommunications needs. Now is the time to get up to speed on what you need to make your home office run efficiently and economically. Over the next few years, sweeping changes in the products and services offered to home offices will provide more choices than ever. Take advantage of them.

Making The Switch

Want your office to seem more like corporate headquarters? Check out Concero Switchboard from Centrepoint Technologies Inc. Priced at $495, this product integrates telephone lines, standard phones, wireless communication devices, fax machines and modems into one system that gives your business a professional appearance. It lets you screen calls, create personalized greetings and perform remote call functions. And you don't even need a PC to use Concero.

All In One

SoloPoint's SmartCenter lets you keep in touch no matter where you are. This all-in-one-number call management system routes, sorts and manages incoming calls. Its menu lets callers direct their call to the appropriate extension, cellular phone, pager, fax machine or voice-mail box. The suggested retail price is $495.

You Make The Call

If your work takes you to clients' offices or other remote places during the week, check out Big Island Communications Inc.'s YoYo Telephone Manager for Macintosh and Windows. Costing $99 for the basic analog version and about $399 for an ISDN version, YoYo was designed to improve productivity by filtering, forwarding and managing calls using caller ID. So if you're off-site, YoYo can forward a call to a pager or cell phone. If you're on-site, YoYo can notify you of a call using a screen pop-up; you can choose to take it or ignore it. YoYo also works with most address book software, allowing users to speed-dial through their computers.

Contact Sources

Big Island Communications Inc., (800) 788-7751, http://www.big-island.com

Centrepoint Technologies, http://www.ctrpoint.com

Mostly Murder, 50 W. 86th St., Ste. A-2,New York, NY 10024, (212) 877-CLUE

Richardson International, (805) 288-2263, rmcd1@compuserve.com

Solopoint, http://www.solopoint.com

Southwestern Bell, http://www.sbc.com