Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, July 12, 1990 TAG: 9007110267
SECTION: EXTRA PAGE: E1 EDITION: METRO
SOURCE: ANDREW POLLACK THE NEW YORK TIMES
DATELINE: SAN FRANCISCO LENGTH: Long
He was the first winner of a new national contest people enter by dialing a "900" telephone number, paying $2.99 for the call.
The contest, called The Game, features such questions as "how many eggs are in three dozen?" - the query Burditt answered to win $1 million.
But not everyone is playing along.
Rep. Bart Gordon, D-Tenn., has asked the attorney general to investigate the contest, saying it appears to be an illegal lottery.
The organizer of the contest, a Los Angeles company called 900 Million Productions, maintains The Game involves skill and is therefore not gambling.
That issue is but one part of a growing debate among regulators and businesses about "900" telephone numbers and how they are used.
Other issues are whether and how "900" numbers can be used for charitable and political fund-raising, and whether the cost of making "900" calls is disclosed clearly enough to consumers.
A "900" number can be called from anywhere in the nation for a charge that ranges from 50 cents to more than $50.
Use of "900" numbers offers a way to gather large amounts of money in small portions from a huge population, with the phone companies acting as collection agencies.
The March of Dimes, the American Red Cross and other charities have used "900" numbers to raise money, with donations being put on a donor's telephone bill.
And a nationwide "900" number was established this summer to raise money for Nelson Mandela and the African National Congress.
Still, several telephone companies are refusing to include such charges on their bills, saying they do not want the responsibility of distinguishing between legitimate and illegitimate charities.
These companies include US West, whose subsidiaries provide telephone service in 14 states in the Rocky Mountain area and the Pacific Northwest.
The Federal Election Commission has been grappling with whether "900" numbers can be used for political fund-raising without violating laws that ban contributions from corporations and require strict reporting of contributions.
The problem arises because anyone with access to a corporation's telephones could dial a "900" fund-raising number and the donation would be charged to the business.
That would make it difficult to identify the individual contributor.
In March, the election commission issued an advisory opinion to Digital Corrections Corp., a provider of "900" services based in Riviera Beach, Fla., that for the first time approved the use of a "900" number for campaign fund-raising.
The commission established numerous restrictions, including that the company must verify that all calls are from residential addresses in the United States.
The "900" services are also the subject of numerous complaints from consumers who end up paying more or receiving less information than they expected.
Consumer Action, a San Francisco-based group, recently released a report detailing what it said was deceptive advertising by some "900" services.
One service, for instance, advertised it would provide information on how to get government grants.
But those who called the "900" number, for a charge of $5, were referred to another "900" number, at a cost of $24.95, to get the information.
Another service advertising government job information charged about $20 and merely reeled off phone numbers of government agencies that were available in the phone book, Consumer Action said.
"I think there's going to be increasing controversy," said Edwin N. Lavergne, a lawyer with the Washington firm of Ginsburg, Feldman & Bress who specializes in this area.
"As the `900' industry becomes more and more visible," he said, "you're going to see increasing scrutiny of programs."
These issues are arising just as one of the first disputes involving "900" numbers seems to be fading.
That is the use of "900" numbers, and similar "976" numbers that serve a single locality, to provide sexually explicit messages.
The debate pitted those opposing what they consider to be pornography against those advocating freedom of speech, and it has not been resolved.
But it has diminished somewhat since many phone companies began to offer customers a way to prevent their phones from being used for such calls.
In any case, people involved in the "900" number industry said, "dial-a-porn" is becoming a shrinking part of the business.
The "900" service is also being used by large corporations for promotions that offer prizes or coupons.
And some television programs invite audiences to call a "900" number to vote on an important issue or on what they consider the best football play, for example.
Other services offer sports scores, weather and information about celebrities.
Some "900" operations run by the large media and information companies, such as those of USA Today and Cable News Network, were not created to raise money but to extend the reach of the news organization, said Stephen H. Reynolds, an analyst at Link Resources, a New York market research company.
Last month the Roanoke Times & World-News began including a "900" number at the bottom of its daily horoscope column that readers can call to get a "personalized" horoscope. Callers can get more detailed horoscope information and their horoscope for any specific date for a charge of 85 cents per minute. The newspaper gets 25 cents per call from the "900" service.
The "personalized" horoscope is an experiment to determine the level of interest among Western Virginians, said Roanoke Times and World-News Executive Editor Forrest Landon.
"The newspaper is looking into providing "900" services for two reasons: to give readers additional information and boost revenues in a way that helps hold down subscription and advertising rates," Landon said.
Any additional pay-per-call services will be offered as a way to give readers specialized information that would not normally be available because of the paper's space limitations, Landon said.
Wire services, such as the Associated Press, and feature syndicates also are starting to offer stock quotes and crossword-puzzle answers by "900" numbers.
Many "900" services tend to be entrepreneurial, are run as businesses and are discontinued if they do not live up to financial expectations.
All told, the money spent on "900" calls has about doubled every year since 1986 and should reach $515 million this year, Link Resources estimates.
The services are offered by long-distance phone companies, which collect a percentage of the charge for each call, usually about 40 cents for the first minute.
The remainder goes to the company offering the service.
The charges for such services generally appear on the phone bill mailed by the local company, which receives a share of the long-distance company's proceeds.
One of the fastest growing areas of "900" numbers is for contests and promotions.
VH-1, a cable television music-video channel, sponsored a contest in which viewers could win 36 Corvettes, worth a total of $1 million.
The channel received more than 1.3 million calls, at $2 a call.
A telephone game associated with the "Family Feud" television show allows callers to compete for daily prizes and offers a grand prize of $50,000 to one participant chosen at random.
But members of Congress and some local legislators are asking whether such games are really lotteries in disguise.
Gambling over interstate telephone lines is illegal under federal law, and most states have their own prohibitions against illegal lotteries, said Lavergne, the Washington lawyer.
Generally, three conditions must be met for a game to be considered a lottery: the contest organizer collects a payment from people who enter, the outcome is decided by chance and there is a prize.
The companies offering such contests say they eliminate at least one of these factors.
For instance, many contests offer the option of entering by mail instead of by a phone call, so the organizer does not necessarily collect a fee.
Even within the industry, there is disagreement on how far organizers must go to prevent their games from being considered lotteries.
Lavergne said if the ease of entry by mail was not equivalent to entry by phone, the contests could be at risk of being classified as lotteries.
In 1984, the Georgia attorney general shut down a contest played on a "976" number, contending it was a lottery even though people could enter the contest by mail.
Another way to avoid being called a lottery is for the game to involve skill, not chance.
In The Game, up to 10 callers compete to see who is the quickest to answer a question, like how many keys are on a piano or in what decade a person first walked on the moon.
The winner in each of these first rounds - and there could be many thousands of first rounds depending on how many people call in - is assigned a toll-free "800" number to call to enter the next round.
The winner of seven rounds gets the $1 million prize.
The company says it will eventually offer the prize every two weeks, although it has not yet paid the first one or awarded others.
There are smaller prizes for people who win fewer rounds. Contestants pay only to enter the first round, which costs $2.99.
As many as 10 million callers could compete in The Game, which means its producer could take in nearly $30 million for each $1 million grand prize it paid out, although a portion of that would go to the phone company.
Gordon said the questions - like the one about three dozen eggs - might be too easy to constitute a game of skill.
He also said he thought the outcome could be influenced by the speed at which the signal from a telephone reaches a game's computers, which would vary depending on the caller's telephone equipment and location.
That could make a game unfair and introduce an element of chance.
The organizers of The Game said they have had winners from all parts of the nation.
Staff writer Chuck Milteer contributed information to this story.
by CNB