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Vol. 1 No. 1 — March 1996

Welcome to the first edition of PhoneNews. It is a newsletter dedicated to helping people save money off their phone and fax bills. It will also provide tips to using the Internet to save money...and tips to save money on the Internet. Throughout every issue of PhoneNews, you will find Quick Tips which will point out areas of savings that can be implemented quickly and easily — which fits in with the purpose of this newsletter.

There is a plethora of information out there about telecommunications. Most of it is highly technical and requires knowledge from the perspective of an industry insider. How ironic, considering that virtually everyone uses a phone and is affected by the knowledge! Technical knowledge should not be a prerequisite to saving money any more than driving a car need require mechanical knowledge.

Our goal is to be informative, interesting, and valuable for your telecommunication needs. Please provide us your feedback so that we can make PhoneNews continually better. If you have any questions about anything you read in this newsletter, send e-mail to

I would like to thank David Berger without whom I wouldn’t have gained the knowledge I have. I met him after hearing him on a Detroit talk station promoting his book, Tele-Communication Techniques, the predecessor to The Cheapest Way to Make Phone Calls, Send Faxes or Use the Internet. Thanks to David, I am implementing many saving tips such as benefiting from three virtual phone lines for little more than the cost of one line, as well as learning that there is a lot that one can negotiate. If you’re interested in purchasing his book, go to . And check out David’s home page at for some of the most interesting links in cyberspace (especially if you like information on stocks!).

An archive of PhoneNews will be kept at our web site. Happy reading.


  1. Newsblips
  2. New Area Codes — They’re changing the way we dial. If you operate a business in a new area code that doesn’t have a 0 or a 1 as the second digit, there are some things you need to know so you don’t lose business from people who can’t reach you.
  3. Hot off the Press: 3-cents-per-minute Long-distance Calls! — Just before The Cheapest Way was published, David Berger discovered a way to make local zone long-distance calls (also known as local toll or intraLATA calls) for just 3 cents per minute). He explains how.
  4. Standardized Caller ID Codes — The phone companies are finally making the "star codes" uniform, so that no matter where you live, you’ll always know how to block or unblock your call from Caller ID.
  5. Free Faxing through Internet — The Internet Multicasting Service offers free faxing thanks to volunteers throughout the world. This article is taken from The Cheapest Way.
  6. Consumer Scam Alert — As competition becomes more and more fierce among long-distance providers, so have the marketing tactics. Find out what you need to do to prevent your long-distance phone service from being switched without your authorization.
  7. Security — Some companies in their automatic system to check billing don’t require any security codes, zip codes, or PINs, so that anyone can call in to check your spending — i.e. prospective employers, collection agencies, bankruptcy lawyers, friends you owe money to, etc.! You must notify the phone company to have your name removed from their automated system.
  8. Long-distance Service is Getting Cheaper with "Free Fridays" — Pay just 11.9-12.5 cents per minute all week long...then call free every Friday.
  9. PCS is Bringing Affordable Cellular into Many Markets — Don’t sign up for any long-term contracts with a cellular provider until you read this article.
  10. Fast Internet Access through Cable — Cable TV offers Internet access much faster than with previous technologies. Find out how you can connect through this latest technology.

1. Newsblips

Most people still don’t know about area code 888. On March 1, the new toll-free 888 area code began. Because of the lack of publicity about the new toll-free area code, most people don’t know that it exists; others believe they will be charged for the phone call. The proof: BellSouth has an office that helps businesses with their telecommunications needs during the Olympics, when commuting in Atlanta will be difficult. At first their radio ads mentioned "this new toll-free number: 1-888-WORK-EASY." After a couple of weeks, the ads changed: It became "this new toll-free number: 1-800-872-9101." The Toll-free Consortium contacted BellSouth to find out why they switched. The answer: (1) Many businesses were unable to contact them because of their PBXs (private branch exchanges) and had to call a different BellSouth office number instead; and (2) many people thought that the call would be a toll call.

Wiltel/WorldCom is the first choice of long-distance carriers used by resellers. Thirty percent of switchless resellers responding to a poll by Atlantic*ACM said they use WilTel (also known as WorldCom because of a recent acquisition). That’s more than twice as many that use Sprint (14%) and AT&T (13%). MCI showed up at 9%. WilTel was also the first choice among switch-based resellers (21%), followed by MCI and Sprint with 16% and AT&T with 8%.

UniDial offers the best rates for businesses using over $500 of long-distance service per month. That’s according to Your Company Magazine. Its fall 1995 issue published a comparison of long-distance carriers and resellers. Some resellers listed included Telegroup ($ .129 per minute), USTel/Consortium 2000 ($ .1235 peak), and UniDial ($ .125). UniDial had the lowest rates for businesses spending over $500 per month ($ .119), while USTel had the best rates for businesses under $500 per month ($ .1235).

Monopoly on intrastate long-distance calls ends in Virginia. Phone customers in Virginia can now place intrastate long-distance calls with any carrier using that carrier’s 5-digit PIC (i.e., 10XXX).

We’ve run out of 10XXX codes. These (formerly) 5-digit codes are dialed before you place a call in order to select the long- distance company you want to use on a per-call basis. Now, the Federal Communications Commission (FCC) has assigned a new set of codes that start with 1010. Some of them work already — for example 1010288 (AT&T), 1010555 (WilTel), 1010333 (Sprint), 1010569 (WCT), 1010222 (MCI), and 1010444 (Allnet).

2. New Area Codes

Area codes used to be identifiable as such because they always had a 0 or a 1 as the second digit. This is no longer the case. Here is a brief history about phone numbers in the United States. Exchanges (the first three digits of a 7-digit phone number) used to contain any number EXCEPT 0 or 1 in the second digit. Area codes always had a 0 or 1. Hence, when area codes and exchanges were exclusive, dialing a long distance call in the same area code involved dialing a 1 plus the 7-digit number.

Then the supply of exchanges was depleted, so the solution was to introduce "area code-like" exchanges — exchanges with a 0 or 1 as the second digit. Wherever this occurred, it necessitated a change in the way one would place a long-distance call in the same area code: It became necessary to dial 1 plus the area code plus the 7-digit number. The telephone industry has been lax in standardizing this procedure; in sparsely populated states where there are plenty of exchanges, the old system is still being used.

Now we’ve run out of area codes which have a 0 or 1 as the second digit, so the telephone industry has introduced "exchange-like" area codes — they can be practically any three digits. The great news is that this will fill the demand for new phone numbers almost indefinitely. The problem we are encountering in the short term is that the private branch exchanges (PBXs) of many businesses have old equipment that recognize area codes through the old system. Newer equipment can be reprogrammed, but the old equipment simply has to be replaced — at a cost of about $20,000. This problem could have been abated at the earliest time that it became apparent area codes would be depleted. Had the telephone industry mandated a system of dialing 1 plus the area code for all long-distance calls in the same area code, the 3 digits following the 1 could be interpreted as an area code regardless of the numbers contained therein. And had the industry alerted the public about the new standard much sooner, businesses would have had more time to replace the equipment and to make sure that any new equipment they purchased wouldn’t be obsolete in just a few years. Instead, all of this comes as a surprise to much of the public, because there are around a dozen new area codes in effect now, and the first one, lower Alabama’s 334, was introduced just over a year ago in January 1995. Currently, there are only three area codes in effect that are past their permissive phase: 334, Washington State’s 360, and metro Atlanta’s 770. However, there are another dozen that are currently in the permissive phase. As more new area codes are added, the permissive phase will decrease. To date, the shortest permissive phase ever was the 770 area code, which began Aug. 1, 1995 and ended Dec. 1 of that year. Chicagoland’s 847 area code will have an even shorter permissive phase of 3 months. The permissive phase is the time period during which you can complete a call to the new area code either by dialing the old or new area code. Once that period ends, calls to exchanges in the new area code will not go through by dialing the old area code.

Oh, in case you weren’t aware, Nov. 1, 1995 was designated National Area Code Day! In any case, whether or not you operate a business in one of the new area codes, you could be affected. If your business is in a new area code, you may lose out on business from customers who have old PBXs and simply can’t reach you. It is conceivable that some companies will switch vendors based on whom they can reach using their outdated PBXs. There are two solutions to this problem:

In the next issue of PhoneNews, we will detail all of the new area codes, including the region served, the effective date (when the permissive phase begins), the permissive dialing end date, and a toll-free test number that you can dial in that area code to make sure you can place such a call. For example, to test calling a number in the 770 area code, you can call 1-770-666-9999, and you should hear a recorded message saying you successfully placed a call to that number. Because it’s a recorded message, you don’t pay for that call. Bellcore is the first source you should go to for information on new area codes.

As a final note, because of the new toll-free area code, 888, which began on March 1, businesses will have an extra incentive to expedite replacing their outdated equipment: the ability to reach the new toll-free numbers.

3. Hot off the Press: 3-cents-per-minute Long-distance Calls!

by David Berger
Special to PhoneNews

There’s a new cutting edge breakthrough that you need to know about. It allows you to save money on local zone long-distance calling and faxing as described in my new book entitled The Cheapest Way to Make Phone Calls, Send Faxes or Use the Internet.

Certain cellular phone service providers, in conjunction with their local phone company, offer a service called Smart Number. (This service may be called something different by various phone companies.) Smart Number is an advanced voice mail system that includes features such as voice messaging, paging, and direct connect paging. If you obtain a Smart Number accessible as a local call, you can save a bundle of money by simply placing outgoing calls through its advanced network. Here’s an example of how it works in one locale:

  1. First, you dial your Smart Number.
  2. Then you enter your personal identification number (PIN).
  3. Next, press "9" to access an outside line.
  4. When you hear the dial tone, dial the number you wish to call, and pay just 3 cents per minute — regardless of the distance in your local calling zone and regardless of the time of day.

In order to obtain a Smart Number, some phone companies may require you to sign up for paging or cellular service; even if that’s the case, Smart Number does not require the use of these other services. The basic service fee is reasonable — around $5 per month.

If you would like to purchase The Cheapest Way to Make Phone Calls, Send Faxes or Use the Internet, send e-mail to To find out more about the book, visit

4. Standardized Caller ID Codes

Up to now, different phone companies have had diverse procedures for blocking Caller ID. For example, Ameritech had a call blocking code (*67) that needed to be dialed before placing a call. BellSouth, on the other hand, didn’t even have such a code, but customers could opt to have all calls automatically blocked. Now the Federal Communications Commission (FCC) has stepped in to mandate uniform Caller ID standards. Here is what the ruling provides:

Now that equipment is being sold that can prevent anonymous calls from going through, it is important that all customers have the ability to Unblock Caller ID.

5. Free Faxing through the Internet

by David Berger
Special to PhoneNews

(Excerpted from David Berger’s The Cheapest Way to Make Phone Calls, Send Faxes or Use the Internet)

Right now, without any special equipment or software requirements, you can send faxes through the Internet absolutely free. The procedure is so simple that if you can send e-mail, you can send free faxes.

Of course there are services that charge for this service — the advantage of paying for such a service is that more areas are covered. The Internet Multicasting Service is a non-profit organization that operates a free e-mail-to-fax service. They rely on volunteers from the U.S., Australia, Canada, Denmark, Germany, Greece, Hong Kong, South Korea, New Zealand, Portugal, Sweden, Taiwan, and the United Kingdom, who maintain fax servers in their particular areas, so all phone calls to fax machines are local.

To send a fax to someone, first create the e-mail message. Then send it using the following address, replacing the italicized parts with the actual person's name and phone number, but keeping the punctuation (including the underline) intact:

Note that the phone number is one continuous string of numbers, as shown in the example above, and must include the "1" and the area code, even if the fax is just being sent across town. The service automatically sends you an e-mail confirmation, stating either that the fax transmission was successful or that it did not go through because there is no local fax server in that area.

Another free service available through the World Wide Web enables you to send faxes free to anyone in metropolitan New York (area codes 212, 718, and 917).

Back to The Cheapest Way...

6. Consumer Scam Alert

If David A. Berger hadn't been on his toes a month and a half ago, his phone bill would have doubled. Berger, an Ann Arbor, Mich. consultant and author of The Cheapest Way to Make Phone Calls, Send Faxes or Use the Internet, prides himself on having a wealth of information about phone companies...yet he was almost taken for a ride by a seemingly credible long-distance scam.

Here's what happened: A lady who referred to herself as Yolanda called Berger asking whether he wanted his long-distance charges to appear on his local Ameritech phone bill rather than on a separate bill. Her selling point was the convenience of having to write only one check. Berger specifically asked her whether he was being switched to a different long-distance carrier. Furthermore, he asked whether any kind of commitment was necessary. Her answer to both questions was: "Absolutely not — we just need your approval to combine the two bills." Then she said, "In the near future, Ameritech will be offering long-distance services." As far as he knew, she worked for Ameritech and everything seemed legitimate — especially since one thing she said is true: The new telecommunications reform bill grants local phone companies the right to compete for long-distance service.

She asked him to say "yes" to authorize the change combining the bills; the recorded "yes" would serve as proof of authorization. After Berger agreed, Yolanda said — as an aside — "Within two weeks, you'll never be paying more than a quarter a minute." At that point, Berger asked her again whether this had anything to do with switching long-distance companies. This time she said "yes" and hung up.

Berger was able to protect himself by calling the business office of Ameritech, his local provider, and ordering a PIC (Primary Interexchange Carrier) freeze on all his phone lines, which is a foolproof means of preventing long-distance phone companies from switching a customer's long-distance service without that person's express consent.

Berger immediately informed Ameritech of this incident, advising them that it should be investigated. It took Berger three phone calls before he was connected to an Ameritech office that was willing to take any information down about this incident. He asked them to contact him with information about what action was taken; more than a month later, he still has not heard back from Ameritech.

The story goes on...Berger, an independent representative for UniDial, a long-distance reseller of WilTel/WorldCom, got a report from his supervisor that a customer of his in Chicago just had one of their lines slammed (switched to a different long-distance provider without their approval), and that the other lines were switched "at the customer's request." Rather odd, considering this customer was very happy with UniDial. Berger contacted the customer and discovered that they were a victim of the exact same scam. He had the customer call 700-555-4141, a toll-free number used to identify which long-distance service they are connected to. Upon calling the 700 number, they found out that they were no longer on UniDial but on AT&T — at double the rate. (Note: To be fair, this does not mean that AT&T was necessarily responsible for this incident; most likely it was a reseller practicing these unethical selling tactics.) Berger emphasizes these points:

  1. Selling tactics among some organizations have seemingly reached a new all-time low;
  2. Those who have done the research to find the best deal in long-distance calling have the most to lose from this type of scam; and
  3. Ameritech's lack of follow up has hurt its credibility in his eyes.
Now, unfortunately, Ameritech's name is being dragged into a fraudulent sales scheme that encompasses its wide geographical service area — at least from Detroit to Chicago. Obviously, this type of scheme may be practiced in other regions with the names of the respective local phone companies used in place of Ameritech.

Berger has compiled the following consumer tips to prevent you from being taken by the "combined bill scheme" as well as other schemes:

Note: You can stay informed about the latest scams by visiting the Scam Alert Page at

7. Security

Some phone companies, in their automated system that you can call to check your billing or report a problem, don’t require any security codes, zip codes, or PINs whatsoever. Ameritech is notorious for this problem. As a result of having no PIN required to access your account, anyone can call in to check your spending — prospective employers, collection agencies, bankruptcy lawyers, friends you owe money to, etc.

Fortunately, you can have your name removed from their automated system. Unless you make a point of notifying your phone company to have your name removed from their system, you will be vulnerable to having personal information available to anyone.

A similar security problem exists in the area of cutting off service. This problem was spotlighted in a California newspaper in reference to Pacific Bell — but this problem can occur with most local phone companies, which do not require any verification for a request to shut off service (other than the name and phone number). Pac Bell’s solution was to offer a PIN that customers would have to give to terminate their service. This PIN security option must be specifically requested by the customer. Check with your local phone company to see if they offer such a service.

8. Long-distance Service is Getting Cheaper with "Free Fridays"

Competition between long-distance service providers has gotten so fierce that now you can get deals such as free calling on certain days — you can call anywhere coast-to-coast, even overseas. The maximum amount of money you can save per line is $1,000 per month for a period of one year. These incentives, if used properly can equate to savings of $12,000, $24,000 — even more — per year off phoning and faxing. The free calling on Fridays could save you a bundle; the only caveat is that the everyday rate of 16 cents per minute is high; there’s no need to pay more than 11.9 to 12.5 cents per minute.

Here are some ways to cash in on the "Free Friday" savings:

9. PCS is Bringing Affordable Cellular into Many Markets

Personal Communications Services, or PCS, is the biggest threat yet to traditional cellular service providers. The first market to enjoy competition from PCS is the Washington D.C./Baltimore market. Here’s what’s happened: The local cellular carriers slashed prices by one half. Now you can get cellular service in D.C. and Baltimore for $15 per month. Rates could get as low as 19¢ to 25¢ per minute in the daytime with access charges as low as $10, according to a consultant in that market. Today, the average daytime cellular charge is 35¢ per minute. PCS can also offer a flat-rate plan which makes no distinction between local and out-of-area calls. Still another advantage is that no long-term contract is needed. As prices become more competitive, sales of new PCS and cellular phones will increase, bringing down equipment prices in markets where cellular phones are not already offered for free in return for a contract.

PCS also offers technological advantages — and one setback. The advantages: a clear, static-free signal using digital technology (which also prevents eavesdropping); paging and voice mail built into the telephone; and lightweight phones (under 7 ounces). The disadvantage: for now the area served by a PCS provider is limited. For example, customers of PCS in the D.C./Baltimore market can enjoy the service only in metropolitan Washington D.C., including parts of Maryland and northern Virginia. Given all the advantages, this one setback is obviously one that the traditional duopolies will have at their marketing arsenal.

PCS will be introduced in New York and parts of California this year. By 1998 it is expected to be nationwide.

10. Fast Internet Access through Cable

New technology is being developed that will enable you to gain access to the Internet through your cable company. Connection will be immediate, and the connection speed will be a lot faster than what regular phone lines can handle. Most phone lines can handle speeds of 26400 to 28800 bits per second (bps). The best analog phone line may get up to 31,200 or even 33,600 bps, two connect speeds supported by the latest modem protocol, V34+. But with cable, you can connect at 57,600 or perhaps even 115,200 bps.

With cable, you will enjoy much higher connect speeds, and most likely the added competition will bring prices down. Atlanta is going to be the first test market for cable Internet access, and the service will be offered later this year.

Coming up in the Next Edition of PhoneNews

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