David_W_Tamkin@cup.portal.com (08/25/88)
The following article by Eric N. Berg appeared in the New York Times News
Service's "The Artful Traveler" column, which I read in the August 21,
1988, Chicago Tribune:
While vacationing recently in Vail, Colorado, Kirk Bloede, a New York
investment banker, decided to call home. Using his AT&T credit card, he
completed the call from a pay phone in a tavern, and as he said later, "I
thought no more about it."
After returning home, Bloede found that he had been billed by a company he
had never heard of -- International Telecredit Inc. -- and that the cost,
just over $5, was more than twice what he had paid for other calls of
comparable length.
"Not only was the price high -- more than $1 a minute," Bloede said, "but I
didn't even know I was buying a more expensive product."
Kenneth McEldowney, executive director of Consumer Action, a San Francisco
consumer group, recently paid another long-distance company, Elcotel, $5.13
for a six-minute call from a Berkeley, California, pay phone to Washington,
D.C. The same call on AT&T would have cost $1.94
Though toll charges vary from company to company, alternative operator
services (AOS's), as these companies are known, generally cost two to five
times more than AT&T.
Many people do not realize that the pay phone they use may be tied to an
alternative operator company.
Unlike conventional long-distance companies, such as MCI, U.S. Sprint,
Allnet, and AT&T, AOS's are wholesalers. They provide long-distance
service, including operator assistance, to hotels, motels, hospitals,
owners of private pay phones, and others. The establishments then resell
the service to the public, receiving a commission, ranging from 15 to 20%,
on each call.
The alternative operator service industry began about two years ago, when
AT&T stopped paying commission to sellers of its long-distance service.
Roughly forty companies have been formed, and they have been tried in
virtually every major hotel chain, including Hyatt, Sheraton, and Hilton.
Last summer the Sheraton Corporation offered AOS services in some of its
hotels but abandoned it after guests complained about the rates. William
Oates, Sheraton's manager of hotel systems and telecommunications, said
that during the day, the alternative companies' rates exceeded AT&T's by up
to 60%; evenings and weekends, the rates were more than double AT&T's.
Major AOS companies include National Telecharge, National Telephone Service
Inc., and Telesphere.e
Some modifications are being made, according to Paul Gamberg, president of
Operator Service Providers of America, a new trade group, which has
recently initiated a code of responsibility.
"Overcharging has been a problem to some degree, but it has been
exaggerated," he said.
Alternative operator service companies do not deal directly with the
public, soa traveler can use one without knowing it. Operators are not
required to identify themselves to callers, and because of billing
arrangements, it is possible for a traveler to use and AT&T credit card and
think the call is being routed by AT&T.
Some companies bill in three-minute increments (rather than the actual time
of the call), and some bill for calls that do not go through, while some
charge up to twice what AT&T charges for operator assistance.
For callers, then, the issues are twofold: first, how do you know if the
call is being carried by an alternative operator service? Second, how can
you avoid being billed more than you think is reasonable?
When you stay in a hotel or use a pay phone in a restaurant or bar, ask the
operator whom he or she works for. If it is AT&T or another carrier that
you use regularly [submitter's note: or the local telco, of course], you
will pay their rate. If it is a company you haven't heard of, chances are
your call will be carried by an alternative operator service. In that
case, you should ask what the call will cost before you place it.
Generally, the rate will be cheaper if you bill your call to a major credit
card such as VISA or American Express, because the alternative operator
service's cost of billing is less through these cards than if you dial
directly and your bill is prepared by a local Bell company.
Nonetheless, if the price seems high, there are a number of choices. The
easiest is to ask the operator to connect you to your regular long-distance
phone compnay. You might also try dialing your company's 800 number. MCI
and U.S. Sprint, for instance, maintain toll-free numbers in all major
American cities. MCI's number is 800-950-1022; U.S. Sprint's is
800-877-8000.
It is also sometimes (though not always) possible to use 10XXX codes to
reach your regular carrier. Under a program worked out as part of the Bell
System break-up, the caller first dials whatever digit it takes to make a
long-distance call. In most hotels, that is an 8. You next dial 1 and 0
followed by a three-digit code to reach the carrier. (AT&T's code, for
example, is 288.) Once you reach your long-distance company, complete the
call by dialing 1 followed by the area code and number. Eventually, the
hotel will receive a charge for the call and bill you by mail. Generally
it is not possible to make credit-card calls using 10XXX (spoken as 10
triple X) dialing.
The caller may still be frustrated, however, if the phone has been wired to
route all calls only to an alternative operator service. This blocking of
calls, including 10XXX sequences, is common. The only choice then is to
find another pay phone, preferably one owned by one of the Bell companies.
Under terms of the Bell System break-up, local phone companies may not
automatically direct calls to any single carrier.
The Federal Communications Commission, saying it has received hundreds of
complaints about alternative operator services from consumers, has issued
an advisory urging travelers to ask beforehand whether a call is being
handled by an alternative operator service, and, if so, what the cost will
be.
At least twenty-five state regulatory commissions, as well as a committee
of the House of Representatives, have begun inquiries into alternative
operator services.
AT&T has started mailing letters to its credit card holders, alerting them
to the proliferation of alternative operator companies and suggesting
things, similar to the advice given above, that card holders can do to
avoid paying higher rates.
One reason the FCC has hesitated to order changes in the way alternative
operator services work is that they represent competition for other
companies. To maintain their competitive position, though, the alternative
operator services have had to innovate.
One company, International Telecharge, offers operators fluent in several
languages. Others, including Micro Devices Inc. and Automatic
Communications Inc., are starting a service that allows callers to record a
message if the party the caller is trying to reach is not home. The
service redials the number every ten minutes until the party answers; the
message is then played back.
Industry representatives say that alternative operator services are making
other adjustments. Many of them have cut prices in recent weeks. The code
of responsibility requires members to post signs in hotel rooms and on
private pay phones notifying users that their call is not being carried by
a conventional long-distance company. It also requires alternative
operator service operators to identify themselves each time they answer a
call. And it condemns price gouging and the practice of blocking.
About twenty-five of the forty alternative operator service companies,
including most of the larger companies, have joined the trade association
and, according to Gamberg, the association has the support of the FCC and
state regulatory agencies. If consumers continue to pay more for AOS
service than service from AT&T, he said, it is because the alternative
operator service companies face higher costs than AT&T for billing and
collection.
Still, consumer activists remain concerned. They note that the practice of
blocking remains legal, that operators are not compelled by law to identify
themselves, and that, in any case, adhering to the new code of
responsibility is voluntary.
* * *
[Submitter's note: yes, I am aware of several inaccuracies in Berg's
article; I considered it more important to spread what was being told than
to interrupt it just to repeat things that most of you aleady know.
Still laughing at the thought that the code of responsiblity means anything,
David_W_Tamkin@cup.portal.com]