Deregulated phone market has its 'gotcha' moments

Consumer 9.0: Deregulated phone market has its 'gotcha' moments

By Jeff Gelles Inquirer Business Columnist Posted on Sun, Aug. 2, 2009

It's easy to find examples of deregulation that has helped consumers. Unfortunately, it's also easy to find instances where it seems to have done them harm.

Rarely does one case perfectly illustrate both sides of the coin - a good deal and a "gotcha" rolled into one. But so goes the story of Bob and Angelika Egan, a Delran, N.J., couple caught between the rewards and risks of today's mind-boggling market for international phone calls - a category of calls that the United States deregulated in 2001.

Angelika was born in Germany, and her elderly mother still lives there. But because of an accident several years ago, Angelika finds it tough to travel back. So, dutiful daughter that she is, she calls her mother regularly - for about 30 to 60 minutes a day.

That's where the good news about open markets comes in. Thanks to growing competition that began with the 1980s breakup of the old Ma Bell phone monopoly, the price for international calls has dropped dramatically over the years.

Bob, a retired customer-service agent and supervisor at Northwest Airlines Corp., knows his way around a computer. By shopping around on the Internet, he was able to find a way to keep his wife's calls from breaking the bank. He found a dial-around service,

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that charged 2 cents a minute for the calls.

Rather than dial her mother directly, Angelika dials a domestic toll-free number first, then her mother's number in Berlin. A

60-minute call costs about $1.20.

The system works simply, with just one flaw. If Angelika forgets to dial the access code first, her domestic long-distance carrier, Verizon, charges what it calls its "Basic International Rates." Those rates are a little pricier for calls to Germany.

OK, a lot pricier: $3.20 a minute. The first time she made the mistake, on a 34-minute call on Christmas Day in 2006, her lapse brought a bill for $109.

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Monty Solomon
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