What we list: We included calling plans available on a one-year contract for less than $70 a month ($90 a month on shared-use plans), including generally available promotions. Coverage maps are based on data the carriers gave us and may not show every gap. We tested AT&T Wireless’s reception in addition to Cingular’s, but opted not to list its rates separately: We cannot recommend signing up with AT&T Wireless at this point because it merged with Cingular last week and because Cingular offers comparable prices.

What the cost estimates mean: We calculated the cheapest way to cover five monthly calling patterns, assuming calls average a bit more than three minutes each and half occur during weekday billing periods. «Light use» is about 30 minutes of local calls. «Moderate use» covers roughly three hours of local calls. «Heavy use» is eight hours, including 48 minutes of calls made from elsewhere on the East Coast to local numbers in those other areas, and 24 minutes of long-distance use. «Land-line replacement» is 20 hours or so, including two hours of non-local calling (of which 30 minutes were outside the East Coast) and 160 minutes of long distance. «Chatty couple» is about six hours of use, shared between two phones. All estimates add Caller ID and voice-mail charges if applicable, exclude taxes and are based on December 2003 call-length data from the Cellular Telecommunications & Internet Association (www.wow-com.com).

Washington — AT&T and the USO are teaming to give convalescing Soldiers at Walter Reed Medical Hospital the ability to call friends and loved ones around the country.

The organizations have partnered to provide 11,120 60-minute AT&T Prepaid Phone Cards to patients at the hospital. AT&T is donating the cards to the USO, which will then distribute the cards to Walter Reed patients.

The cards represent a retail value of $100,000.

«Prepaid Phone Cards represent a real lifeline to military personnel trying to keep in touch with the people important to them,» said Cathy Martine, AT&T Senior Vice President-Internet Telephony, Consumer Marketing and Sales. «In fact, the vast majority of prepaid users fall into three categories: military personnel, retirees and low-income consumers. Indeed, for recent immigrants and the poorest of the poor, prepaid cards are often a substitute for wired or wireless phone service and are their only way to make telephone calls. As such, prepaid cards are the only ’dialtone’ available to these consumers.»

Referring to medical facilities involved in treating war wounded, Martine noted «We recognized early on the importance our cards play for these brave service members. That’s why we’re making sure to keep Rota, Landstuhl, the U. S. S. Comfort and Walter Reed stocked with a ready supply of AT&T Global PrePaid Cards.»

Since the beginning of Operation Enduring Freedom and then Operation Iraqi Freedom, AT&T has donated its PrePaid Phone Cards with a face value of more than 25 million minutes to a number of military and civic organizations — including new non-profit organizations such as Operation Gratitude — that have organized to assemble and deliver care packages to troops in harm’s way.

«AT&T PrePaid Phone Cards are the most requested item,» said Carolyn Blashek, founder of Operation Gratitude, an Encino, Calif.-based group organized to support all military personnel deployed overseas. Blashek’s organization was originally brought to AT&T’s attention by television personality Wayne Brady and has received more than 10,000 AT&T cards to date.

«With the beginning of hostilities in the Middle East, AT&T asked for our assistance to help donate $4 million worth of their PrePaid Phone Cards,» said Ned Powell, USO President and Chief Executive Officer. «These cards go a long way to help them reach out to family and friends, a very important component in their recovery,» he added.

Cable & Wireless, faced with a new threat to its overseas calling market by a growing number of voice-over-the-internet (VOI) companies, is now contemplating getting into that market itself.

C&W told the Business Observer that it was now testing a VOI for possible offer to commercial clients.

Cellular service provider Digicel said that although it was contemplating offering a calling card service, it would not be VOI calling cards.

The VOI represents the latest frontier in the fight over the telecommunications market, estimated to be worth $1.5 billion per year — given the 150 million minutes of calls made each year by Jamaicans to the USA.

However some small but aggressive and nimble players are offering rates as low as $2 per minute for Jamaicans to call the USA, using the Internet. This compares with $16.50 per minute for a regular phone call.

«The market is even better than ever,» Mark Allen, chief executive officer at VOIP International, told the Business Observer.

VOIP International operates the Yap Jack — a device which allows persons to phone internationally via their home computers.

An alternative method known as voice over internet protocol (VOIP) allows the use of calling cards for these calls.

«The large players are looking to get into VOIP…but we are not concerned about them, because we already have an advantage of having market share and equipment,» says Allen, who has a Yap Jack client base of some 30,000.

VOIP International is not the only one in the market. Other prominent players include Avoxi Communications Ltd, InfoChannel Ltd, Cool Cards Ltd, Caribtel Ltd and N5.

The average rate of VOIP is around $8 per minute, but the rate can be as low as $4 per minute offered by Yap Jack operators to the US and $2 to the United Kingdom.

VOIP is not without problems, with the calling quality notoriously inferior to traditional phones — a factor attributed by C&W to poor equipment being used by these new entrants to the telecoms market.

«In the general marketplace, very few cheap offerings of VOIP offer any quality of service,» said C&W in a response to the Business Observer query. «Excessive compression or insufficient bandwidth in a VOIP scenario could be identified with the symptoms cited (as problems).»

But VOIP players charge that C&W has been blocking their calls and affecting the quality of their service, in a bid, they say, to protect its market share.

Even the regulator agency has made similar charges against the former monopoly.

«C&W has engaged in anti-competitive practices,» says the Office of Utilities Regulation (OUR)- accusing the telecoms firm of charging higher rates to VOIP players than to other customers for the same services, and of blocking VOIP calls.

«The Office of Utilities Regulation is very concerned about the practices of C&W,» notes Courtney Jackson, the deputy director general.

One company, Avoxi, a VOIP calling card service provider, told the Business Observer that it grew so fed up with C&W, that it recently invested US$400,000 to set up a satellite to completely bypass it and legally.

Generally, VOIP players utilise C&W’s internet fibre-opic line, with C&W offering the most reliable internet infrastructure, through a line which stretches hundreds of miles from Jamaica into Miami, USA.

«We at Avoxi were paying US$13,000 per month for a T1 line (which is an internet line) from C&W,» says Avoxi chief of operations, Gregg Dalmar, «even though a T1 is US$600 at C&W in the USA.»

C&W USA was sold in December 2003.
Dalmar claims that even though he was paying C&W for the service, some calls could not be completed.

«The DSL connection was behaving like (a slow) dial-up internet connection, and the calls were dropping. If you were my customer you would not curse C&W, you would curse me even though it is not my fault,» he complaim. «We were faced with a choice: either pack it all in, or dig deep and invest. So we dug deep and invested in a satellite.»

Added Robert Swaby, a VOIP reseller: «The OUR should determine if the dominant player is acting as the only player in the market, and if this is the proper way to conduct business.»

The OUR, however, says that the practices «are not illegal but anti-competitive».

«We are trying to establish competitive safeguards but until it is established it is not illegal,» notes Jackson, who says that studies are now under way.

«If we act now and do not (act correctly) we will be carried to court,» adds Jackson.

Last year, Caribtel, which offers a calling card, sued C&W for some US$20 million over the blocking of its toll-free number. The case was settled out of court.

Yet other players have complained that the technology is still new to Jamaicans, who are either ignorant of VOIP, or simply prefer to use mobile phones to speak to relatives abroad, and that these factors are affecting sales.

«We have not had major success with selling the Yap Jack,» says Herman McDonald, chief marking officer of InfoChannel. «We feel, although extremely well-priced, it is for a narrow market which does not wish the convenience of mobile phone.»

Both InfoChannel and VOIP International are Yap Jack distributors, with InfoChannel Jamaica’s largest internet provider, after C&W.

«Jamaicans are willing to pay more for phone calls with cell phones than going to a land line and making a much cheaper call with a Yap Jack,» marvels McDonald.

The problem is that a Yap Jack sells for US$125, as opposed to calling cards which only require the user to buy the card.

«It is a prohibitive factor but not significant,» he argues.
Allen, from VOIP International later added: «This is true (that the sales of Yap Jack have stalled), but we get a lot of traffic with the existing Yap Jack holders from years ago — before the calling cards.»

The OUR estimates that 600 million minutes enter Jamaica, and 150 million minutes leave every year.

By Allen’s calculations, at an average calling rate of J$10 per minute, total revenues for the sector is $1.5 billion per year.

VOIP has exploded in places like Europe where several Internet providers now offer ’internet voice’ services at very low charges, forcing the large telecoms companies to adopt new tactics to preserve their income.

A pending Federal Communications Commission decision that would increase the charges for prepaid calling cards used by the military to stay in touch with their families has irked U. S. Rep. Curt Weldon.
«It’s outrageous,» said Weldon, R-7, of Thornbury. «Our troops need to have some sort of contact with their loved ones and raising their rates and limiting access is not the way to do it.»

The FCC decision would result in rate increases of more than 20 percent, a price hike members of the armed services and their families can ill afford because 95 percent of military personnel use these cards.

Richard Zangara of Darby Township, father of U. S. Army soldier Nicholas Zangara, who was killed in action in Iraq on Saturday, said his son would call home constantly and rang up a monthly credit-card charges of $300 with the special G.I. rate of 4.7 cents per minute.

Supporters of the increase argue that the rules must change to require universal service contributions to be collected, but according to Weldon, such a policy would be nonsensical.

«This action is particularly unconscionable during a time of war,» said Weldon, who sits as vice-chairman of the House Armed Services Committee. «It is ironic that the FCC would vote to shift the burden to pay for a fund designed to help low-income and disadvantaged citizens onto the military and those whom the fund was designed to protect.»

Weldon said he would continue to put maximum pressure on the FCC in hopes of convincing them to abandon the idea.

«If it were up to me, all of our active military would be able to call home for free,» he said.

-- ANTHONY. J. SANFILIPPO

iBasis, Inc. (OTCBB: IBAS), a leader in international long distance, VoIP, and prepaid calling cards, today announced that it has established an interconnection with Skype, the global Peer-to-Peer (P2P) Internet telephony company, to provide worldwide call termination services over its global VoIP network. iBasis will carry calls originating from Skype’s soon to be launched SkypeOut service that will enable users of Skype’s application to place phone calls to any phone in the world.

Skype’s Peer-to-Peer application is the fastest growing voice communications offering worldwide. The free software, which enables users to use their PCs to make free calls to other Skype users, has been downloaded more than 16 million times since its launch in August 2003. The SkypeOut application will allow users to prepay to place calls to regular landline and mobile phones worldwide.

«Skype is delivering on the Big Promise of Internet telephony, which has always been about innovation — the creation of new services and new business models that spawn a new era of growth in global communications,» said Ofer Gneezy, president and CEO of iBasis. «By providing consumers an exciting new choice, SkypeOut will dramatically accelerate the growth of phone calls over the Internet, which already account for more than 10% of all international calls.»

«With iBasis’ experience in carrying huge volumes of calls and Skype’s incredible growth, this is an agreement that fits us both perfectly,» said Niklas Zennstrom, Skype’s CEO and co-founder. «Together, we can grow the worldwide consumer use of Internet telephony by providing easy access to affordable high quality service.»

Cards Show Fumo With American Flag

POSTED: 10:43 am EDT July 23, 2004

State Sen. Vincent Fumo is sending more than 40,000 voters free five-minute prepaid phone cards after he was given a resounding victory by primary election.

The Philadelphia Democrat’s office has been sending out the cards, with a picture of Fumo and a rippling American flag, and thank-you letters this week. The mailing cost the senator’s campaign fund more than $30,000.

Fumo wouldn’t comment on the cards. Howard Cain, the political consultant who came up with the idea, says Fumo wanted to thank the voters.

Even the man Fumo beat in the primary, James Tayoun Jr., says he hopes he gets one of the cards.

Critics say deal slights consumers

By John Accola, Rocky Mountain News
July 17, 2004

Lawyers leading a consumer class-action lawsuit against AT&T Wireless stand to receive $3.75 million in a proposed settlement giving class members nominal discounts on equipment and free air time.

Hill & Robbins, the Denver law firm that sued AT&T four years ago over billing fees, touts the settlement’s «maximum potential value» at more than $20 million for several million consumers.

But the only cash to exchange hands will go to the plaintiff lawyers — up to $3 million for attorney fees and an additional $750,000 to cover their expenses.

Plaintiff class members — potentially about 3 million former and current AT&T Wireless subscribers — get calling cards, free air time or coupons that give a 20 percent discount on phone gear accessories.

For most class members, the average benefit per subscriber can’t exceed $3, according to settlement documents.

Terms for about 1 million current AT&T Wireless subscribers in the class are more favorable. They stand to receive non-cash benefits averaging $10.50 per claim.

Denver District Judge Herbert Sterns has scheduled a Sept. 25 fairness hearing for final settlement approval. Notices of the proposed settlement were mailed to AT&T Wireless customers two weeks ago.

Critics already are slamming the settlement as menial for consumers, a product of misguided litigation in which the primary beneficiaries are plaintiff lawyers.

«It’s a typical coupon settlement where the attorneys get rich, the sued corporation gets protection, and the consumer gets the shaft,» said Colorado Senate Majority Leader Mark Hillman, a frequent sponsor of bills aimed at curbing frivolous lawsuits.

Hillman said using coupons and discounts to resolve a lawsuit before trial are classics signs of a nuisance settlement.

«Class-action lawsuits have a legitimate purpose, but nobody in their right mind would make an issue over $10.50 or spend four years chasing it,» Hillman said. «The only people who have the incentive to do that are the plaintiff attorneys who stand to get millions of dollars.»

Jeff Weist, executive director of Colorado Civil Justice League, said coupon and voucher settlements are hard to value because they typically have a low redemption rate.

They’re even more questionable when they result in big legal paydays for the plaintiff law firm, he said.

«The lawyers get $4 million and the plaintiffs get maybe $3 to $10 in credits from the company that supposedly wronged them,» Weist said. «That’s not a solution. The interests of consumers aren’t being served here.»

It’s unclear how much Hill & Robbins has invested in time and money on the suit. The settlement agreement provides no details on how the firm is calculating its settlement cut.

A fee schedule submitted in an unrelated class-action case in Denver federal court notes that founding partner Robert Hill charges $425 an hour. For William Wilcox, his senior associate, the hourly fee is $275.

Hill and Wilcox declined repeated requests to be interviewed. They referred to a confidentiality clause in the agreement with AT&T that stipulates «parties and their counsel agree not to disparage each other in any way.»

After receiving clearance from AT&T, the law firm issued a two-paragraph statement in an e-mail from Wilcox this week.

While acknowledging the proposed settlement’s actual value can’t be determined, the e-mail said, «The settlement of class-action lawsuits without cash payment is not uncommon.»

As to determining the firm’s compensation, Wilcox said that’s ultimately up to the judge.

«Recoverable legal fees will be determined by the court,» said Wilcox’s e-mail, adding that the court may award fees based on several factors, including hours spent and the risks the firm took in taking on the case.

AT&T’s outside counsel, Sean Baker at Wheeler Trigg Kennedy, said he couldn’t comment on the settlement beyond Wilcox’s e-mail.

«I’m limited by the settlement in terms of what I can say . . . without (first) reaching an agreement with the plaintiffs’ counsel.»

«What that indicates to me,» said Hillman, «is that when you shed light on what really happens in these class-action cases, it embarrasses even trial attorneys.»

The suit, filed in December 1999, alleges certain AT&T Wireless subscribers were overcharged on bills that wrongly indicated they had exceeded their monthly allowance of minutes.

At issue is AT&T’s so-called delayed billing for roaming calls. Hill & Robbins maintains the practice resulted in some customers having to pay additional fees for exceeding their designated monthly minutes even though the calls were made the previous month.

Typically, calls exceeding the monthly limit incur extra charges of from 25 cents to 45 cents a minute.

AT&T Wireless countered the next- month billing was «common industry practice born of necessity» because roaming calls often used another carrier’s network and processing the billing information required more time.

The complaint, which received class- action status in January 2002, was set for trial in April but was postponed after Hill & Robbins attorneys said they were close to a settlement.

The settlement agreement, dated May 26, states the terms were reached after «extensive arm’s-length negotiations» that included mediation sessions with Denver attorney James Lyons at Rothgerber Johnson & Lyons.

AT&T said the agreement should not be construed that the carrier has committed «any fault, wrongdoing or liability whatsoever.»

Tom Allibone, auditing director of a New Jersey-based consumer advocacy group called TeleTruth, said disputes over off-cycle billings have resulted in class-action suits against several other carriers, including Nextel and Sprint.

Teletruth, which does independent audits of customer phone bills, maintains nearly 50 percent of all monthly statements contain errors, mostly overcharges.

Allibone supports the flurry of legal action taken against the nation’s telcos. Even so, he criticized the AT&T cashless settlement for «playing tricks and games» with class members.

As proposed, extra airtime applies only to current AT&T subscribers and unused minutes can’t be carried over to any subsequent month.

For class members who chose to receive calling cards, there are six-month expiration dates. The same applies to the discount coupons on equipment.

«There has to be an ending point to this stuff,» Allibone said. «But when they say this company is on the hook for $20 million, yet they really expect $10 million of it won’t be exercised, that bothers me.»

Plan would allow for raising of basic residential, business bills toward highest in state

BY GREG EDWARDS

A new state regulatory plan sought by Verizon could mean higher local telephone rates for some of its residential and business customers.

The plan was filed with the State Corporation Commission late Friday. If approved, it would cover Verizon Virginia (the former Bell Atlantic) and Verizon South (the former GTE). Verizon has asked for its approval by Oct. 1.

The plan, devised to help Verizon compete with rivals, would allow the company to raise its basic residential and business rates to the highest Verizon rate in the state.

Currently, the lowest rate paid by Verizon residential customers is $10.12 in rural areas such as Clover, Haysi or Narrows. Under the proposed plan, those rates could rise to a statewide ceiling rate of $15.45, which is now paid by some former GTE customers.

For businesses, the lowest rate for a single phone line, $21.96, is found in some parts of the former GTE territory. Under the plan, business rates could climb to a maximum of $53.18, which some Verizon customers in the old Bell Atlantic territory pay.

The Verizon plan would allow the rates to be adjusted annually for inflation. It also would limit annual increases toward the statewide ceiling to 10 percent annually.

Verizon wants regulatory changes so that it can compete with long-distance, cable-television and new phone companies that have been cutting into Verizon’s local phone business.

Much of what Verizon is seeking was sought through legislation in this year’s General Assembly. The bill failed as introduced, but the legislature passed a one-paragraph policy statement backing telephone competition.

When it introduced the legislation, Verizon argued that a subsidy should be eliminated that has kept phone rates in rural areas below the company’s costs of providing service. Last month, an SCC hearing examiner suggested that the lawmakers’ policy statement would require an end to the subsidy.

Under its plan, Verizon could reduce the subsidy — which long-distance companies and their customers pay in the form of charges for access to the local-phone network — while increasing other rates to make up the lost revenue.

Mark Keffer, AT&T’s Virginia president, was not familiar enough with the Verizon plan to comment on its overall soundness, but he said that if it allows Verizon to address the access-charge issue, it is «a step in the right direction.»

William Irby, head of the SCC’s communications division, said he was encouraged that Verizon filed a plan with the commission rather than seek changes through legislation. «At least they have it in the right ballpark this time.»

Having the plan before the commission will give the public a chance to comment on it and will make it subject to due process and all the SCC’s public-interest tests, Irby noted.

Verizon contends that its plan complies with the new state competition policy and with a 1993 law that allows phone companies to propose alternative forms of regulation.

«Sweeping industry changes» have created the need for a new regulatory plan, Verizon said in its SCC filing.

In the document, Verizon’s state President Robert W. Woltz Jr. cited the increased competition from new local carriers, including long-distance carriers such as AT&T and MCI that have invaded local markets. In Virginia’s major urban areas, competitive carriers serve up to 45 percent of the phone lines, including up to 40 percent of residential lines, Verizon said.

Wireless and broadband telecommunications services, such as cable-modem and DSL, also have emerged as strong competitors, Verizon said. With wireless companies offering buckets of any-distance minutes, increasing numbers of customers are using wireless phones in place of wireline connections, the company said.

Verizon reported that more than 40 percent of the wireline customers in its service territory buy bundles of local and long-distance service from Verizon or its competitors and no longer buy service at rates set by regulators. Competitors, including cable-television companies, are offering phone service over the Internet and in some cases totally bypass the local phone network, Verizon noted.

The company said the plan will enable it to raise prices of its basic services closer to its costs but ensures prices will remain affordable. By reducing subsidies, the plan will stimulate competition, and by reducing the regulatory burdens on Verizon, it will help the company maintain good service, Verizon said.

If the plan didn’t give Verizon greater competitive flexibility, the company wouldn’t have gone to the trouble of proposing it, Woltz said yesterday. «We have some high hopes of it having a positive impact.»

PRWEB) July 15, 2004 -- Corporate Phone Cards, a major supplier of custom-designed promotional and retail phone cards, is announcing an additional technical benefit which allows clients to obtain answers to survey questions as soon as customers activate their phone cards.

Via a simple process, a caller accesses the Corporate Phone Cards network via a toll free number and enters a unique PIN number assigned to the client’s survey. Next, the caller answers a series of questions by entering the appropriate number on their telephone keypad. Immediately after the caller answers the last question, the phone card is activated for calling.

According to Catherine M. Cavanagh, Corporate Phone Cards president, the most valuable feature is that the client will be able to access a secure web site to review survey statistics in real-time. Cavanagh goes on to say that the survey response rate for clients is expected to be significantly higher than traditional programs because the respondents have access to their cards immediately. Prior to this, a respondent would have to wait several weeks to receive their phone card in the mail.

Jack Mills, Project Manager for Corporate Phone Cards, states that, «Just about all businesses and non-profit agencies could benefit from the new survey program, not just research firms.» «Whether you’re an automobile dealer surveying customers about their recent car repair or service experience or a manufacturer, who wants to obtain consumer feedback about a new hair conditioner», Mills says, «the program is a perfect fit.»

RARITAN, N.J.(BUSINESS WIRE)July 12, 2004--According to a new report from The PELORUS Group entitled «North American Prepaid Cards: Wireline Markets In Transition,» the prepaid phone card market exploded between 1995 and 2000, increasing from $750 million in 1995 to over $3.3 billion in 2000. During this period both the domestic and international components surged. But 2001 and 2002 saw the market contract. In 2003 total phone card revenues enjoyed a turnaround, managing to reach back up to about $3.2 billion.

The direction was not uniform, however, as growth declined for domestic phone card revenues, while international revenues jumped. Tom Miezejeski, Vice President Of Research for The PELORUS Group explains, «Lower rates in the international sector have made international calling affordable for a larger segment of the population. Indeed, rates for international calls have come down sharply in recent years. Besides the impact of competition among phone card vendors, rates for all international calls have dropped as foreign carriers have struggled with heightened competition from other carriers and IP telephony. But this in turn has generated more acceptance among consumers. Thus, minutes of use have grown to more than offset the revenue erosion stemming from lower rates. The result is higher revenues even as some sectors of the market have contracted.»

The report projects a gradual decline in domestic phone card revenues between 2003 and 2008. On the other hand, international phone card revenues will jump by almost 33 percent, climbing to $2.75 billion in 2008. By 2008 the international market will be more than twice the size of the domestic market.

Phone card revenues in Canada are projected to follow a similar path over the next five years. Total phone cards revenues are projected to grow to over $470 million CD in 2008. The report notes that the Canadian phone card market is subject to many of the same price pressures facing service providers in the U. S. Thus, use will grow significantly, but growth in volume will only slightly more than offset price declines.

For more information regarding «North American Prepaid Cards: Wireline Markets In Transition», please visit www.pelorus-group.com