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

DATE: WEDNESDAY, August 16, 1995                   TAG: 9508160079
SECTION: BUSINESS                    PAGE: B8   EDITION: METRO 
SOURCE: BY MEGAN SCHNABEL STAFF WRITER
DATELINE:                                 LENGTH: Medium

IT'S YOUR CALL: LONG-DISTANCE WHOLESALING HAS ARRIVED

First there was that new area code, 540.

And now there's something called "10297."

It sounds more like a ZIP code than something for the telephone, but don't let the five digits fool you. Telephone customers around the Roanoke Valley have been getting promotions in the mail promising discounted long-distance rates on phone calls that use this number. The code accesses a long-distance wholesaler called, appropriately enough, the Long Distance Wholesale Club.

All you have to do, the letters say, is punch in the code before dialing the telephone number you hope to reach and you'll get long-distance rates that are 15 percent to 50 percent below the basic rates charged by the major long-distance companies: AT&T, Sprint and MCI. The farther away you call, the mailings say, the more you save.

According to the 10297 mailing, a caller using the code can save 15 percent on calls made to locations less than 925 miles away and 20 percent on calls made to locations between 926 and 1,910 miles away. The savings increase with mileage to a maximum discount of 50 percent off calls that cover more than 4,251 miles.

Calls made through wholesale companies are itemized on your normal phone bill.

The company declined to make direct comparisons for specific calls, saying the amount a caller could save depends on which of the majors' calling plans are being used.

It's all a matter of high-volume vs. low-volume purchasing, said Charles Helein, a Washington, D.C., attorney who specializes in telecommunications cases. Large corporations buy long-distance time in bulk from the major carriers, getting lower per-unit rates than consumers who buy relatively small amounts of time.

In the early 1980s, the Federal Communications Commission ruled that long-distance carriers must make the same bulk rates they give to corporate customers available to the phone-time wholesalers. These companies then resell the time to customers at a rate that is higher than the corporate rate but still lower than the basic rate offered to individual consumers.

Al Wann, a spokesman for AT&T in Washington, said the resellers are "playing the margins." What they're doing is no different that someone going to a gardener, buying roses in bulk and then selling them on the street, he said.

The resellers buy considerably more bulk time from AT&T than an individual or a small company would, Wann said. "We're talking millions of minutes," he said.

The business of resellers is not unwelcome at AT&T. "It certainly helps put traffic on our network and we make revenue this way," Wann said. AT&T supports regulation of the resellers, though, and is concerned that sometimes resellers may "run roughshod" over consumers, he said.

The 10297 service has just recently been activated in this part of the state, but generally long-distance wholesalers are nothing new. Industry estimates place the total number of long-distance carriers at 500, Helein said, although some people say the actual number may be double that figure.

"This is a very common practice," said Jennifer Durst-Jarrell, executive director of the Florida-based America's Carriers Telecommunication Association, a group of 166 small long-distance companies. Wholesalers have been buying and selling long-distance service in metropolitan areas for years, she said, and now have turned their attention to secondary markets that may have been passed over earlier.

The Long Distance Wholesale Club, which is based in Arlington, started operations in late 1993, said John Deery, the company's senior vice president. The 10297 service is now available in 14 or 15 states, he said, although customers in those states may use the service to call anywhere in the world. He would not say how many customers the company has, but said the number soon would reach a million.

The 10297 code must be entered before every long-distance call, Deery said, unless a customer decides to switch permanently to the club from his or her former carrier.

Staff writer Greg Edwards contributed information to this story.