Phone plan opens options for consumers

Posted: Friday, October 20, 2000

Competition in the long-distance phone service market just got a little hotter.

Alaska Communications Systems Group Inc. hopes to lure long distance telephone customers with a new plan offering unlimited interstate calls for $20 per month.

The new rates are part of a growing number of options available to Kenai Peninsula consumers. GCI offers free Internet access with its long distance service. AT&T Alascom offers Alaska Airlines miles and interstate long distance rates as low as 5 cents per minute.

"There's a lot of plans out there. That's why it's important to shop around and make sure you get something that fits your needs," said GCI spokesman David Morris.

John Ayers Sr., ACS vice president of marketing and sales, said most long distance providers charge a monthly fee plus per-minute rates.

"Sprint has a plan for 2,000 minutes in off-peak hours for $20. They're just complicating things. We've found consumers are starting to tune out. It's too complicated," he said.

With its new plan, ACS bills show a single flat-rate charge for out-of-state long distance calls. For now, at least, ACS bills in-state long distance calls at 14 cents per minute.

However, ACS also has asked state regulators to approve a rate of $20 per month for unlimited in-state long distance time, with out-of-state minutes charged at 10 cents per minute. It has asked them to approve a rate of $30 per month for unlimited in-state and out-of-state long distance time.

"We believe these plans offer exactly what the consumer wants -- freedom to call where and when they wish without worrying about what their monthly phone bill will look like," Ayers said. "These plans, which offer maximum flexibility and fixed affordable cost, will energize competition in the long distance market."

Competitors remained skeptical.

Meg Suddeth, external affairs manager for AT&T Alascom, said AT&T rates -- $4.95 per month plus 7 cents per minute or $7.95 per month plus 5 cents per minute for interstate calls -- are very competitive. AT&T Alascom customers also earn also 1,000 miles for Alaska Airlines' mileage plan for every six months service from AT&T plus one Alaska Airlines mile for each dollar spent at AT&T.

"Plus, the one niche we bring is our end-to-end service. We can take (calls) in-state or around the world. We stay on our network throughout," she said. "It's reliability and quality."

Morris said that with no listing of the long-distance minutes used, the new ACS flat-rate bills will make it difficult for customers to determine whether the $20 fee is a good deal or not. Consumers should determine how much long distance time they actually use each month before signing up, he said.

They also should consider their total telecommunications requirements, he said. When they do the math, Morris said, the new ACS rates may not compete.

"The reason is, Internet access is something everyone wants," he said.

GCI provides its long distance customers with basic dial-up Internet access at no extra charge.

"We see Internet service as having a higher value proposition for telecom customers," he said. "If you move to ACS, you lose your free Internet service. At the end of the month, you'll end up paying more."

In the Kenai area, GCI customers pay $5.99 per month for long distance, plus 14 cents per minute for in-state long distance and 10 cents per minute for interstate calls. There is no extra charge for Internet access, but GCI does not yet offer local service on the peninsula. Its long-distance customers here still must buy local service from ACS.

GCI does provide local phone service in Anchorage, Morris said, and it has received approval to provide it in Juneau and Fairbanks, though ACS has challenged the regulatory approvals. He said he expects GCI eventually will apply to provide local service in the Kenai area.

"We haven't made any bona fide request to the Regulatory Commission of Alaska, but it's a large market, and it seems to make a lot of sense," he said.

Meanwhile, Ayers said one ACS plan offers unlimited Internet access plus 60 minutes of long-distance service for $12.95 per month. For long-distance time beyond the 60 minutes, it charges 10 cents per interstate minute and 14 cents per in-state minute.

Natalie Knox, ACS manager of marketing and communications, said the new plan is available in communities statewide where ACS long distance is an available choice.

"If they can't pick us, we can't provide the service," she said.



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