Pennies at a time, we chip away at long-distance firms

BigZoo.com, a popular California company selling prepaid long distance for as little as 2.9 cents a minute, is getting out of the business at the end of next month.

Most people have probably never heard of BigZoo, but the company's demise shows that even a small, bare-bones seller of long-distance minutes is not immune to the same relentless competition and market shrinkage that is afflicting such long-distance icons as AT&T, which stopped marketing residential long-distance service this year.

''Over time, with increasing alternative technologies and providers of telecommunication service, we have found it difficult to provide a competitive service," BigZoo told its customers in a recent posting on its website. Company officials could not be reached for comment.

BigZoo and AT&T may be at opposite ends of the telecommunications spectrum, but both companies are getting hammered. They are being squeezed as the price of long distance keeps dropping and the overall market shrinks as consumers rely more on e-mail, instant messaging, text messaging, wireless phones, and new Internet-based calling technologies.

Kate Griffin, senior analyst at the Yankee Group, a Boston research firm, said companies increasingly are either selling long-distance service as part of a larger package of products or not at all.

''The stand-alone long-distance industry is disappearing," Griffin said.

Close to a dozen of BigZoo's customers, many of whom signed on with the company after reading about it in a column I wrote four years ago, recently contacted me, asking what they should do now.

It's a subject in which I've taken a personal interest. For years, I've been urging low-volume long-distance callers like myself, who can't take advantage of package deals, to consider cutting the cord to their long-distance provider.

It often requires more work (prepaid and dial-around services require a lot more numbers to be punched in), but it lets you control your costs better and avoid those annoying fees and taxes that show up on your long-distance bill every month regardless of whether you make any calls.

More Americans seem to be doing it. According to the Yankee Group, the percentage of US households without a long-distance provider has grown to about 18.2 percent, or 20.4 million households, this year from just 2 percent in 2001.

Many of these people are probably using their wireless phones to make long-distance calls, but many are also migrating to companies that sell prepaid minutes or 1010 dial-around service, which allows you to pay on a call-by-call basis.

Michael Kutney, who started using BigZoo while attending graduate school in Boston and continued after he moved to Santa Clara, Calif., said he typically makes 300 to 600 minutes of long-distance calls a month from home and on trips. He said his calls cost him $10 to $25 a month.

''It's convenient and safe," Kutney said, noting that he likes the fact that his children can't just pick up the phone at home and dial China.

Al DePiero of Danvers, who has been with BigZoo for the last four years, said he's not sure which company he is going to switch to. ''There seems to be an unlimited supply of resources, but it's hard to tell which one is not only priced right but stable," he said.

A good place to start is an informational website such as Abtolls.com, SaveOnPhone.com, or 1010phonerates.com. Also keep in mind that you can experiment with a prepaid or 1010 dial-around service without discontinuing your current service.

For those who liked BigZoo, which charges 2.9 cents a minute when dialing into the service using a local access number and 3.9 cents a minute using a toll-free number, there are a number of options.

OneSuite.com and Pincity.com offer similar services and charge the same rates as BigZoo, but don't have a 75-cent monthly fee. ''We're successful. We're here to stay," said Dan Wong, general manager of Pincity, which is offering free minutes to BigZoo customers who give Pincity a try.

RNK Telecom of Dedham offers prepaid rates as low as a third of a cent a minute (that's right, 0.3 cents!) with its Talk 3000 card, but it requires customers to use local access numbers that are only available in Massachusetts, southern New Hampshire, and Rhode Island.

''It is truly the best deal out there," said Edgar Dworsky, the editor of Consumerworld.org, though he cautions about trying to replenish RNK cards online because it's difficult to do.

Costco and BJ's Wholesale Club sell a prepaid calling card that is cheap and easy to use. Both retailers sell an MCI card with 670 minutes for just under $20, or about 2.9 cents a minute. The cards never expire (they used to last only a year), have no dormancy fees, and assess a 65-cent surcharge for calls made from a payphone (the fee used to be 30 cents).

I've used these cards for years and never had a problem. The only drawback is all the numbers you have to punch in to make a call. Including the toll-free access number, the personal identification number, and the number being called, you have to punch in more than 30 numbers on each call.

I'm not a big fan of dial-around services because of hidden fees, but Rich Sayers, editor and founder of 1010phonerates.com, says at least one plan is worth checking out. He recommends a 10-10-834 service from Acceris, which charges 3 cents a minute with a 39 cents-per-call connection fee. The service also requires the user to spend at least $3 per month or incur a $2.50 low-usage fee.

For those looking for a cheap traditional phone service, the consensus pick seems to be Enhanced Communications Group of Bartlesville, Okla. Both Sayers and Dworsky recommend it. ECG charges 2.75 cents a minute with no monthly fee, no minimum usage requirement, and 6-second billing. Calls inside Massachusetts are billed at a rate of 8.1 cents a minute.

Auto insurance forum

Reaction to last week's column on the auto insurance fallout of a fender bender was so strong that Stephen Walkauskas, the South Boston resident who was featured in the article, has started an Internet forum where people can share ideas about the Massachusetts auto insurance system.

The forum can be accessed at http://finance.groups.yahoo.com/group/ma-auto-insurance/.

Bruce Mohl can be reached at mohl@globe.com.