Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, May 7, 1993                   TAG: 9305070147
SECTION: BUSINESS                    PAGE: A-5   EDITION: METRO 
SOURCE: Knight-Ridder/Tribune
DATELINE:                                 LENGTH: Medium

LOTS OF 800-NUMBER USERS WOULD REALLY RATHER SWITCH

Volatility among the 1.3 million users of 800 numbers stems from flexible new technology mandated by the Federal Communications Commission that took effect at the start of the month.

The technology lets businesses choose new carriers while keeping their current 800 numbers. It also allows them to divide their business among two or more carriers while using the same 800 number.

The FCC on also mandated a three-month period - through July - during which customers can cancel service contracts to change carriers without penalty.

The open period has kicked off a price war among long-distance carriers for shares of the 800-number business, estimated at $7 billion a year, and is giving many companies a break on the cost of their 800 numbers.

First Union Corp., the Charlotte, N.C., bank that has taken over Roanoke-based Dominion, for instance, has cut the bill for its customer service lines 15 percent. Spokeswoman Sandra Deem said First Union had used Sprint for years. Because of the competition, the bank asked for presentations by AT&T, Sprint, MCI and LDDS Communications. Now it splits its 800 business between Sprint and AT&T and enjoys better rates.

Orvis, the mail-order retailer with operations in Roanoke, said it has invited presentations this month by AT&T, MCI and Sprint. Orvis uses AT&T but will switch if it gets a better offer.

Shenandoah Life Insurance Co. will stick with AT&T, said Tom Cecere, second vice president for corporate services. But AT&T gave the Roanoke-based company a new plan that is "a little bit more attractive" financially.

AT&T in 1977 developed the software enabling a caller to dial an 800 number free from anywhere in the country. From 1987 until the present, the second three digits of every 800 number were allocated to a specific carrier. Thus, the local phone company automatically switched the call to AT&T, MCI, Sprint or one of the smaller carriers as soon as the local system processed the second three digits in the call.

One drawback was that if a business wanted to change phone companies, it also had to change its 800 number, which would mean direct expenses such as changing numbers on catalogs, frustration to customers and other headaches.

With the new technology, each time someone dials an 800 number, the local phone system queries an outside database that tells it where to direct the call, meaning the numbers are no longer tied to a specific carrier.

Gerry Euston, a Sprint executive, said all 800-number calls are processed through the new system, whether a customer changes carriers or not.

Staff writer Mag Poff contributed to this story.