Choosing a long-distance phone service
Boston — A small group of women office workers pushed through the revolving door at the Prudential Center and headed around the corner in the direction of Brigham's and Star Market. It was lunch time.
Anyone walking that way couldn't help noticing a tastefully decorated booth put up by AT&T Communications, the long-distance telephone company. As the women passed by it, one plucky one turned back toward the booth and cheered: ''MCI!''
Long-distance rivalry has come to Boston.
Companies like MCI Communications, which offer low-cost, long-distance service, have been beating AT&T rates for three years now. But lately, competition in this business, especially in Boston, has become intense.
It's all because of ''equal access,'' a new way of making long-distance phone calls that takes effect in Boston's Back Bay on Sept. 1. (See timetable for schedule elsewhere in New England.) In all, nine long-distance phone companies are competing for the 38,000 business and residential customers here.
''I'm being deluged,'' cries Alan Willens, who lives and works in the Back Bay. At home and at his office in the sky-blue Hancock Tower, he's getting a double whammy of promotional mail from long-distance companies. It's all left him ''thoroughly confused.''
Equal access came about because of the breakup of American Telephone & Telegraph (AT&T) last January. It's a nationwide process that is taking place over two years, going slowly the first year as everyone adjusts to it and speeding up in the second.
The upshot is that the new arrangement allows people to make long-distance calls on any carrier by dialing 1, plus the area code and number. No more worn-out index-fingers from punching out 22 digits to use a company other than AT&T, and no more need to have a push-button phone to use the alternative carriers.
All of this happens because of changes at the local phone company. When you make a long-distance call, it starts at your phone, goes to your local phone company's switching station, and is connected to a long-distance carrier. The long-distance carrier then transmits the call to the local phone company on the other end, which in turn routes the call to the party you are trying to reach.
In the past, AT&T has dominated the switching point in the local phone companies. But under the new rules, local phone companies must allow all long-distance companies ''equal access'' to that switching equipment, giving all carriers an opportunity to have the same transmission quality and switching ease.
Back Bay consumers have six months to decide which long-distance phone company will be their primary carrier. Then they'll get a separate long-distance bill each month (unless they choose AT&T, which includes its bill with the local bill from New England Telephone).
The tough part is choosing the company. It's so tough that Charles River Associates, the consulting firm of which Mr. Willens is vice-president and treasurer, is relying on another consulting firm to recommend a long-distance company.
Charles River Associates got bids from telecommunications consulting firms ranging from ''a few hundred dollars to several thousand,'' Willens says. The firms do everything from finding the least expensive long-distance company by using computer models to evaluating a business's telecommunications system.
For those who don't fall back on a consultant's recommendation, there are three basic areas to consider in comparison shopping: quality, service, and cost.
Gloria Winter decided to stick with AT&T because she thinks it has the highest quality and the best service. ''This is what I was afraid of with MCI,'' she says. ''I've heard (from neighbors and friends) that the quality of connection was poor.''
Stephen Kelley, senior coordinator of telecommunications for John Hancock Mutual Life Insurance Company, says the company will stay with AT&T ''primarily because of quality.'' He says John Hancock transmits a lot of data over the phone. Echoes or noise on lower-cost carriers, which could be tolerated for a voice conversation, will often cause errors in data transmission, he says.
AT&T competitors believe equal access will eliminate much of the quality gap. Mr. Kelley agrees, and expects to reevaluate John Hancock's decision after six months.
The alternative carriers are trying hard to improve their service. Sprint, for instance, has toll-free, 24-hour numbers to handle service and billing problems. And while AT&T may be the only company to have long-distance operators , people will still be able to reach a long-distance operator by dialing ''O'' - even if they don't sign up with AT&T. The operator can handle an emergency or place a call, but now customers will have to pay for it.
Cost is difficult to compare. ITT, Sprint, Western Union MetroFone, and SBS Skyline have all recently changed some aspect of their fees. (There are installation fees, monthly fees, and minimum usage fees.) For businesses, there are ''volume discounts'' to consider.
The way rates are charged also makes a difference. Most of the carriers charge by the minute. But SBS Skyline and Allnet, two of the nine companies competing here, charge in six-second increments. That's precisely why The Sheraton Corporation, based in Boston, uses SBS to transmit data, such as reservation information. ''We're saving a considerable amount of money,'' says Ronald Richardson, telecommunications analyst at Sheraton. But Sheraton only uses SBS in its administrative office. It's keeping AT&T for the guests.
About the only certainty is that most calls on alternative carriers are about 20 percent cheaper than AT&T, says Kathy Porteus at Tech Group/Rooney Pace Inc., a Boston brokerage firm. ''Just like the consumer found that real cheapo phones don't do the job, they'll quickly find anyone who touts a real cheap long-distance service won't do the job.'' But, she advises, with six months ahead to choose, a customer ''would be wise to try a few services and select the best.''