Bell Atlantic introduced its long-distance
telephone service in New York Tuesday, which will make it the first
Baby Bell to offer out-of-state calling from a market where it also
provides local phone service.
The company unveiled three long-distance plans, emphasizing two
with no monthly fees or minimum usage, as well as a package that
bundles local and long-distance service. Combination plans, often
including Internet service, are expected to become commonplace as
Bell Atlantic and other regional Bell providers of local service
win federal clearance to sell long distance in other states.
Bell Atlantic, the local phone company for most of the Northeast
and Mid-Atlantic, gained clearance for New York last week as
regulators declared that the company had finally opened the state's
local calling market to competition.
A ruling was expected today in a lawsuit by AT&T; seeking to
block the decision by the Federal Communications Commission. AT&T;
contends that Bell Atlantic still hasn't made it physically and
financially feasible for rivals to sell local service by leasing
Bell Atlantic's phone lines. Bell Atlantic officials said today
they were confident they would begin selling long distance in New
York on Wednesday.
New York has quickly become the main battleground for an
impending clash between the Bells and long distance leaders AT&T;,
MCI WorldCom and Sprint, all three of which have introduced local
calling in New York over the past year.
SBC Communications expects to get long-distance approval for
Texas soon from the Federal Communications Commission while
BellSouth expects it in Georgia. Bell Atlantic officials said today
they expect FCC approval for New Jersey, Massachusetts and
Pennsylvania by year-end.
Bell Atlantic's new long distance offerings include a 10-cent
per minute plan that costs more per minute than the five-cent and
seven-cent rates recently introduced by the big three, but charges
no monthly fee and may prove cheaper for low-volume callers.
A second plan available only available on the Internet offers a
five-cent rate on weekends and a nine-cent rate on weekdays, also
with no monthly fees. Web-only plans usually feature cheaper rates
because the company can save money by not printing and mailing out
bills, and guarantee payment with a credit card or automatic
deductions from a customer's bank account.
For high-volume callers, those Bell Atlantic described as
customers who spend more than $35 per month on long distance,
there's a calling plan with a monthly fee of $5.95, five-cent
calling during weekend and off-peak hours, and 10-cent calling
during weekday business hours.
The new package plan will cost $19.99 per month plus 10 cents
per minute for all long-distance use and a per-call charge for
local usage that varies with the time of day. The monthly fee
includes up to eight additional features such as caller ID, call
waiting and three-way calling.
Bell Atlantic officials said the flat-rate option of 10 cents a
minute would save money for 60 percent of New York's long-distance
customers compared with the calling plans most prominently
advertised by AT&T;, MCI and Sprint, which carry a monthly fee.
"The 7-cent or 5-cent plans offered by the big three long
distance competitors are phantom long distance plans," said Maura
Breen, president and chief executive of Bell Atlantic
Communications, the new unit responsible for long distance service.
Breen said that by eliminating monthly fees, Bell Atlantic's
10-cent plan would cost one-third to one-half less than most
competing plans, which "can cost customers as much as 16 or 17
cents a minute when the extra charges are calculated."