All You Can Eat

Say goodbye to per-minute long-distance charges and hello to bundled services.
Magazine Contributor
3 min read

This story appears in the May 2004 issue of Entrepreneur. Subscribe »

Per-minute long-distance phone charges are an endangered species. They won't disappear from the landscape overnight, but increasingly, you'll see flat-rate options for long distance and other landline phone services.

They may appear as all-you-can-eat rates, still-cheaper buckets of minutes, or discounts on various service bundles. For example, Verizon Freedom for Businesscombines unlimited local, toll and domestic long-distance calls for about $50 per month per line. Additional discounts are available for DSL connections and toll-free customer numbers if you also sign up for Verizon ONE-BILL, which consolidates all your wireline and wireless service charges from Verizon and its sister companies on a single bill. Designed primarily for businesses with up to 10 lines, Verizon Freedom for Business is currently available on the East and West Coasts but is rolling out nationwide.

"This is not a temporary promotion," says Christopher McKay, Verizon's executive director of business marketing. "Eliminating usage charges is a fundamental change in the way we do business."

As the FCC continues to open Baby Bell monopolies to competition, wireline companies seem to be following in the footsteps of the relatively more competitive cellular industry, whose pricing plans have helped drag down landline rates. I used to pay $300 per month in long-distance calls through my local Bell. But I quit using it for anything but local calls once my wireless carrier quit differentiating between local and long distance in my wireless minute bucket.

Some wireless customers have dropped their local Bell connections altogether, a trend long-distance carriers like AT&T and Sprint are trying to encourage. Sprint's landline division has a new wireline bundlenearly identical to Verizon's for about $50 per month.

SBC Communications is one of the Bells successfully holding onto business customers by letting them design their own service bundles. One popular configuration includes unlimited local and U.S. long distance as well as call waiting, call forwarding and three-way calling for $60 per month for the first line. Each additional line up to ten is discounted.

The plan is to then sell customers up to higher-ticket data services, which SBC is doing in partnership with Yahoo!, again, using discounts. Small businesses pay $44.95 per month (with a 1-year commitment) for speeds of 1.5Mbps up to 3.0Mbps ( Discounts are available on DSL modems; wireless networking kits; and Web-hosting, e-commerce and e-mail services.

Apparently, the specialists created by the decades-long dissolution of Ma Bell are becoming generalists. Until they find their niches in a newly free market, price competition will be the order of the day.


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