MCI LLC

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MCI LLC

1-800-COLLECT CAMPAIGN
DENNIS MILLER ADS CAMPAIGN

22001 Loudoun County Pkwy.
Ashburn, Virginia 20147
USA
Telephone: (703) 886-5600
Web site: www.mci.com

1-800-COLLECT CAMPAIGN

OVERVIEW

Before the 1980s the telecommunications giant American Telephone & Telegraph Corp. (AT&T) dominated the collect-call market by simply owning the majority of America's pay phones. After pressing "0" to make a collect call, consumers were automatically routed to AT&T operators. In 1993 MCI Communications Corporation changed the landscape with its 1-800-COLLECT program. By dialing MCI's toll-free number, callers were routed to MCI operators and bypassed AT&T's inflated rates. Hoping to undermine further AT&T's stronghold on the collect-call business, MCI released its "1-800-COLLECT" campaign, which targeted college students, military personnel, and the parents of both groups.

Created by the ad agency Messner Vetere Berger McNamee & Schmetterer (MVBMS), the "1-800-COLLECT" campaign included television, radio, and print mediums. Spots for the $112 million campaign first aired on May 19, 1993. Most collect calls were being made by young people calling home, and MCI hoped to encourage their families to pressure them into choosing the most affordable carrier. One print ad featured the headline "What's Out" above an earring in a pierced ear, a torso clothed in leopard-skin briefs, and an "OPER 0" telephone button. Below the headline "What's In" was a ring in a pierced nose, a torso clothed in stylish boxer shorts, and the slogan "1-800-COLLECT. America's inexpensive way to call someone collect." The text added, "Dial it instead of '0' and save up to 44 percent." MVBMS filmed commercials with celebrities such as the former talk-show host Arsenio Hall, actor David Spade, sitcom actress Alyssa Milano, and basketball legend Michael Jordan—all pitching the low cost of 1-800-COLLECT. Later spots did not even mention MCI, because the company believed that its brand was not needed to advertise the service. "1-800-COLLECT" spots aired until the end of 2001.

The USA Today Ad Track survey revealed that the first "1-800-COLLECT" spots were most popular among consumers 25 to 29 years old. The company reported a 50 percent increase in annual revenues between 1994 and the late 1990s. Even though collect calls were losing ground throughout the telecommunications industry in 2001, MCI still generated profits with its collect-calling service.

HISTORICAL CONTEXT

Microwave Communications, Inc., later known as MCI Communications Corporation, was founded in 1963 to provide microwave communications to a limited service area. The company later installed a nationwide network of fiber-optic telephone cables and invested in other types of communications equipment. After years of legal disputes, MCI gained the right to compete with AT&T, a government-regulated public utility that had essentially monopolized the long-distance telephone industry since 1913. MCI began offering long-distance services in 1980 and launched a series of advertisements that spoofed AT&T's poignant "Reach Out and Touch Someone" campaign. MCI's low prices were the focus of these and subsequent humorous advertisements during the 1980s. "Sure, reach out and touch someone. Just do it for up to 30, 40, even 50 percent less," said one television commercial. In an era when negative and comparative advertising was not common, MCI brashly compared its prices and services to those of its primary rival. AT&T frequently responded with similar tactics.

MCI's irreverent, wisecracking ad campaigns increased revenues substantially and helped generate a corporate image, but by 1991 the public was growing tired of negative advertisements from telephone companies. MCI softened its image that year with the warmhearted "Friends & Family" campaign, which offered significantly discounted prices for consumers who persuaded their acquaintances to designate MCI as their long-distance carrier. The campaign established such a strong brand identity for the Friends & Family calling plan that long-distance calling plans were thereafter marketed with more emphasis on brands and less on prices. In the $3 billion market for collect calls, however, price continued to be an important consideration, because those calls were often among the most expensive. Although most collect calls were made through AT&T, MCI conducted market research and devised a way to persuade consumers to use its new 1-800-COLLECT service.

TARGET MARKET

Collect calls, placed 300 million times annually, could be up to twice as expensive as calls dialed directly. MCI's research revealed that consumers under the age of 30 placed 70 percent of collect calls. Consumers 18 to 24 years old were most likely to make collect calls. College students and other young people contacting their parents accounted for 33 percent of collect calls, and military personnel calling home accounted for 24 percent. Although it was generally believed that price was not a concern to people who made collect calls, since the bill would be paid by someone else, MCI reasoned that pressure from family members could persuade callers to choose a less-expensive carrier. The "1-800-COLLECT" campaign emphasized price with the slogan "Save the people you call up to 44%." Its contemporary, offbeat style was intended to appeal to young people and to convince them that dialing 1-800-COLLECT was a shrewd choice that demonstrated their knowledge of current culture.

LOW PROFILE

People who initiated a collect call by dialing 1-800-COLLECT reached an operator who made the connection without mentioning that the carrier was MCI Communications Corporation. To ensure that consumers would not assume the service was available only to MCI's long-distance customers, the "1-800-COLLECT" advertising campaign avoided direct mention of the firm's name. Angela Dunlap, president of MCI's consumer markets unit, said that the MCI name was not included in the campaign because the name had nothing to do with the way people made collect calls. Rival company American Telephone & Telegraph Corp. (AT&T) contended that MCI was deliberately confusing people who assumed that when they made a collect call it would be routed through AT&T. According to AT&T's research, more than 50 percent of consumers had no idea who owned 1-800-COLLECT, almost 40 percent thought it was operated by AT&T, and only 5 percent realized it was an MCI enterprise.

COMPETITION

The procedure for placing a collect telephone call had not changed much since the invention of the telephone during the 1870s. Consumers had traditionally dialed "0" on their telephones, and an operator had reversed the charges for them. Most collect calls were routed through AT&T, including many calls made from pay phones. In contrast, MCI's 1-800-COLLECT service allowed people to connect directly with MCI and circumvent the carrier that normally handled collect calls from any given phone. When MCI launched its "1-800-COLLECT" advertising campaign in 1993, AT&T first responded by criticizing the service, but it then introduced its own 1-800-OPERATOR service, which was discontinued in 1994. At the same time AT&T responded to MCI's Friends & Family residential calling plan by introducing its own "i" plan (which was also discontinued in 1994) and by running advertisements saying that "Friends & Family" invaded the privacy of MCI's customers. AT&T had revenues of $37 billion in 1990 and $80 billion in 1995. Advertising Age reported that in 1994 AT&T spent about $259 million on advertising. Of that amount, $174 million went to television commercials, $10 million to radio commercials, $40 million to magazine ads, and $35 million to newspaper ads. By 1995 AT&T had 60 percent of the overall long-distance market (down from 63 percent in 1991), MCI was in second place with 20 percent (up from 16 percent in 1991), and Sprint Corporation was third with 10 percent (up from 9.5 percent in 1991). AT&T's advertising budget that year was $700 million.

Instead of using negative and comparative advertising, Sprint usually focused on cultivating a consistent, pleasant corporate image. During most of the 1990s its promotions featured actress Candice Bergen as spokesperson. Bergen became known as the Dime Lady when she starred in advertisements for Sprint Sense, a calling plan that offered a simple, flat rate of 10 cents a minute. Many consumers switched to Sprint Sense because they had never been sure of the price of calls they made through other carriers that used complex rate schedules and confusing calling plans. Another of Sprint's residential long-distance plans, The Most, resembled MCI's Friends & Family plan, but instead of recruiting customers to help sell the service, it offered half-price calls to the person each customer called most frequently. In 1997 Sprint introduced a collect-calling service named 1-800-ONE-DIME, which charged a flat rate of 10 cents a minute plus a $1.59 set-up charge during certain hours, in contrast to the various rates used by MCI and AT&T. One television commercial showed a family locking their son in a room and confronting him about his habit of using MCI's 1-800-COLLECT instead of Sprint's 1-800-ONE-DIME to call them. Another showed two teenage boys stopping their car on a dark street and rushing to catch their younger brother at a pay phone, dialing 1-800-COLLECT instead of 1-800-ONE-DIME. Advertising Age reported that Sprint spent about $63 million on advertising in 1994, with $44 million going for television commercials, $12 million for magazine ads, and $6 million for newspaper ads. By 1995 Sprint's advertising budget was $189 million.

MARKETING STRATEGY

MCI executives Angela Dunlap, Patricia Proferes, and Paul Erickson spearheaded the development of the 1-800-COLLECT plan in 1993. After brainstorming sessions that included MCI employees from departments such as finance and operations, the service was launched 11 weeks later, on May 19, 1993. To ensure that AT&T would not learn the details of the plan prematurely, MCI did not train its operators to handle the incoming calls until just two days before the new service was announced. Instead of using telemarketers or sales representatives, MCI promoted 1-800-COLLECT entirely through advertising handled by MVBMS. Fun, interesting advertisements for print media, radio, and television were designed to command attention and generate a personality for the brand. Each spot featured the 1-800-COLLECT number prominently, often repeating it several times to help consumers memorize it for future use.

One visually arresting advertisement in People consisted primarily of a bold headline in a hodgepodge of typestyles and sizes, as if someone had cut individual letters from various printed sources, jumbled them together to make words, and glued them to the page beside an old-fashioned rotary telephone (to indicate outdated thinking) and an alarm clock (to indicate an awakening and the passage of time). The words seemed to bounce up and down instead of resting on evenly spaced, horizontal lines. "You still dialing," it began, and a graphic image was inserted to depict the telephone button marked with the letters "OPER 0" for dialing the operator. The headline continued, "To call people collect? Time to retrain your finger." The size of the last two words was much larger than the rest of the headline, making them seem to leap out at the reader. Numerous graphic lines radiating from the headline at all angles emphasized this effect. Below, a drawing of a hand pointed at the words, "Dial 1-800-COLLECT instead. Save the people you call up to 44%." Small type added, "Use it every time you make a long distance collect call." Tiny type aligned vertically in an upper corner said, "Savings based on a 3 min. AT&T operator dialed interstate call."

Another magazine advertisement showed a woman carrying an armload of laundry. Her clothing and hairstyle suggested that the photograph had been taken decades earlier, when she was a young mother. The headline read, "She gave you life. She gave you clean underwear. The least you can do is give her a call." The text urged consumers to commemorate Mother's Day by purchasing savings certificates that would give their mothers $9 worth of 1-800-COLLECT calls. In reverse type against a dark box, the 1-800-COLLECT logo was positioned in a lower corner. Text below said, "Save the people you call up to 44%. Use it every time you make a long distance collect call." The ad concluded in tiny type, "Savings based on a 3 min. AT&T operator-dialed interstate call." Television commercials in the campaign starred celebrities such as actor Wayne Knight (who played Newman on the situation comedy Seinfeld) courting beautiful women, actor Ed O'Neill (who played Al Bundy on the sitcom Married with Children) as a sort of telephone policeman chastising strangers for not using 1-800-COLLECT, and New Orleans Saints football coach Mike Ditka.

MCI spent about $112 million on advertising in 1994, up from $56 million in 1990. Of that amount, $98 million went to television commercials, $6 million to radio commercials, $4 million to magazine ads, and $4 million to newspaper ads. In 1995 MCI's total advertising budget was $325 million. According to USA Today, the company spent about $70 million in 1996 and $148 million in 1997 to advertise 1-800-COLLECT. Celebrities continued to surface as 1-800-COLLECT pitchmen. Arsenio Hall and comedic actor David Spade were featured in 2000 explaining how much consumers could save by dialing 1-800-COLLECT. The next year new celebrities were featured with pseudonyms. The Who's the Boss? actress Alyssa Milano starred as "Eva Savealot" in four spots, and Mr. T of A-Team fame took on the name "Inspecta Collect" to let people know that they could "save a buck or two" with 1-800-COLLECT. The final celebrities for the campaign were the six-feet-five basketball star Michael Jordan beside the two-feet-eight actor Verne Troyer (best known for playing Mini-Me in the Austin Powers movies). Both touted the "Big Savings" of 1-800-COLLECT. Spots for the campaign stopped airing in the fall of 2001.

OUTCOME

MCI's annual revenues from 1-800-COLLECT amounted to $200 million by 1994 and $300 million by the late 1990s. At that time consumers were using the service for almost a third of their collect calls. According to Fortune magazine, MCI sales rose from $11.9 billion in 1993 to more than $18 billion by 1996. MCI's share of all long-distance calls increased from 17 percent in 1993 to 20 percent in 1995, but by 1997 it had slipped back to 18 percent. MCI merged with WorldCom that year to form one of the nation's largest communications companies, MCI WorldCom.

A 1998 survey by USA Today found that the "1-800-COLLECT" campaign was most popular among consumers 25 to 29 years old. The primary target group of consumers 18 to 24 years old liked the ads less, but 18 percent said that the campaign was "very effective." Of the ads that MCI ran concurrently to promote its other services, the musing, surreal "Defining the Future" campaign of 1994 and 1995 won widespread acclaim and positioned MCI as a capable, knowledgeable corporation that could help its customers make the best use of the Internet and other technological innovations.

Although the long-distance industry was collectively slipping in 2001, MCI reported that its 1-800-COLLECT service still generated substantial revenues. The campaign's later spots starring Michael Jordan and Verne Troyer, however, were generally disliked, according to USA Today's Ad Track survey. Nevertheless, MCI representatives claimed that the final spots bolstered 1-800-COLLECT's growth. "Effectiveness relative to the collect-caller marketplace is what's important for us," Jeff Grosman, director of 1-800-COLLECT, said, explaining that those surveyed by USA Today were not in the campaign's selected target. "When you're polling a broader audience, [Ad Track results] may not be as relevant," Grosman explained. The campaign ended in late 2001. A few months later MCI awarded its $100 million ad budget to the agency Deutsch Advertising, a unit of the Interpublic Group of Companies.

DENNIS MILLER ADS CAMPAIGN

OVERVIEW

NOTE: Since the initial appearance of this essay in the 1999 edition of Major Marketing Campaigns Annual, MCI WorldCom changed its name to MCI LLC. The essay continues to refer to the company's former name, as that was the official name of the organization when the campaign was launched.

To promote its 10-10-220 "dial-around" plan in television and print ads, MCI WorldCom Inc. enlisted comedian and former Saturday Night Live cast member Dennis Miller. The sneering funnyman appeared in a series of commercials beginning in 1998 in which he extolled the virtues of the company's dial-around service to dubious consumers. The Miller ads, created by Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York, were in keeping with the emerging practice of using celebrity spokespersons to endorse dial-around services. Television fixtures Miller, Tony Danza, and John Lithgow were just a few of the stars who agreed to lend their genial personas to the cause of long-distance savings in the 1990s.

Through its subsidiary Telecom USA, MCI WorldCom was one of the pioneers of the lucrative dial-around market in the 1990s. Dial-around numbers were access codes that allowed users to bypass their primary long-distance carrier for an alternative firm on a call-by-call basis. Ironically, many dial-arounds were operated by the same carriers, although their ads generally did not say so. By the late 1990s MCI WorldCom had established two popular dial-around numbers—10-10-321and 10-10-220—which helped it achieve a dominant position in this growing market.

HISTORICAL CONTEXT

America's long-distance telephone rates began declining in 1984 with the government-mandated breakup of the Bell System. Suddenly the once monolithic "phone company" was subject to the same vicissitudes of competition as other businesses. A host of smaller companies, such as MCI and Sprint, emerged to pose a challenge to "Ma Bell's" hegemony.

MCI Communications Inc., as it was then known, was the first to gain a foothold in the market when it managed to snag millions of AT&T residential customers through the clever marketing of its Friends and Family calling plan, a long-distance scheme that provided discounts for frequently dialed numbers. A series of feel-good television ads spelled out the virtues of the service and established the equity of the MCI brand.

MCI's success prompted Sprint and other small carriers to develop a wide range of calling plans, all with low monthly fees and sharp reductions in basic per-minute long-distance rates. In time some carriers came out with plans that offered a single discounted rate 24 hours a day. Despite all of the price slashing, however, by the 1990s the majority of America's residential phone customers—upward of 60 million households—had not signed up for a low-cost calling plan. In most instances these customers made few long-distance calls, less than $20 worth per month.

This unfilled niche created an opportunity for the emergence of dial-around carriers. Hoping to attract infrequent callers without a strong allegiance to a long-distance carrier, small phone companies jumped into the dial-around market on a regional basis beginning in 1990. The dial-around, or "10-10," phenomenon did not fully bloom, however, until MCI began to expend its resources in order to promote the idea and its own brand. The company unveiled its 10-10-321 program (originally known as 10-321) in January 1997, supported by a large-scale ad campaign starring movie and television actor Lithgow.

In October 1998 MCI WorldCom debuted a second dial-around program—10-10-220—this time with Miller as its spokesman. MCI officials believed that the two numbers could coexist and even complement each other. "10-10-321 took off like a rocket," said MCI WorldCom spokesman Brad Burns. "After charting very healthy growth with 3-2-1, we launched a second product [10-10-220], which is aimed at a younger, edgier audience."

Dial-around business provided a tremendous boost to MCI WorldCom's bottom line, enabling the company to report revenues of $30.4 billion for 1998, a 15 percent increase over 1997. "We're in front of a parade that's got tremendous momentum and accelerating power. It's literally unstoppable," said Tim Price, MCI WorldCom's chief executive officer for U.S. operations.

Indeed, in the late 1990s the rising tide of dial-around service appeared to be lifting all boats. Industry analysts forecast dial-around revenues at $3 billion for 1999. The figure represented an increase from $2 billion in 1998 and $1.5 billion in 1997. The dial-around service thus represented a sizable chunk of the $40 billion dollar consumer long-distance industry in 1998, according to Fred Voit, a consumer communications analyst with the Yankee Group in Boston.

By the end of the 1990s MCI WorldCom Inc. was providing voice, data, and Internet communications services around the world. The company, based in Jackson, Mississippi, was the second largest provider of long-distance telephone service in the United States, ranking behind only industry leader AT&T. MCI WorldCom operated a nationwide fiber-optic network more than 45,000 miles long. The company employed 75,000 people in more than 300 offices in 65 countries, and its revenues in 1998 exceeded $30 billion.

TARGET MARKET

It might appear at first glance that MCI WorldCom was cannibalizing its own customers by offering two competing dial-around programs, not to mention its conventional long-distance service. But the primary target market for 10-10-220 was the large pool of those who used AT&T for their long-distance calls. Even in the highly competitive long-distance industry, AT&T still commanded the allegiance of more than 70 percent of customers. As a minority player in the long-distance game, MCI WorldCom had everything to gain by picking off AT&T customers, even if it was only on a once-a-month or once-a-year basis.

Marketing officials at MCI WorldCom placed a special emphasis on targeting the substantial number of AT&T customers who, for whatever reason, had stuck with standard long-distance service. These consumers tended to pay higher rates for long-distance calls than those who had chosen plans customized to their individual calling habits. "There's no question we're targeting AT&T's standard rate customers," said MCI WorldCom spokesman Burns. "When we make our promise of significant savings, they are the callers we're reaching out to. We can and do save them a lot of money."

How much of a savings did 10-10-220 offer? According to MCI WorldCom figures, it cost an AT&T standard-rate customer $2.80 to make a 10-minute call from Los Angeles to New York during peak hours. The same call would cost $1.41 if the customer bypassed AT&T and dialed 10-10-321. The longer the call, the greater the savings, claimed MCI WorldCom ads. With the 10-10-220 program, for example, the AT&T customer calling from Los Angeles to New York would pay 99 cents for a 20-minute call, compared to $3.20 with AT&T.

How large was the market being targeted by MCI WorldCom? Potentially enormous, said industry analysts. Nearly 50 percent of long-distance users were under no rate plan at all. Instead, they simply signed up with a long-distance carrier without specifying a plan. One study put the number of U.S. households without rate plans as high as 56 percent and estimated the added cost to consumers at $2 billion annually. "I think we make it clear that these are programs designed for people who plan to spend a lot of time on the phone. They save money and they are very satisfied," Burns said.

NUMBERS GAME

Confused about the savings claims made by dial-around services? You were not alone, said some long-distance industry observers. But the array of calling plans on the market—and the attendant parade of celebrity endorsers—also could be bewildering. Herewith a handy guide to some of the more prominent players in this vibrant segment of the telecommunications industry:

Access Code: 10-10-220 Owned by: Telecom USA (a wholly owned subsidiary of MCI WorldCom Inc.) Celebrity Endorsers: Dennis Miller, Doug Flutie, George Carlin

Access Code: 10-10-321 Owned by: Telecom USA (a wholly owned subsidiary of MCI WorldCom Inc.) Celebrity Endorsers: John Lithgow, Tony Danza

Access Code: 10-10-345 Owned by: AT&T Corp. Celebrity Endorsers: None; used Lucky Dog mascot

Access Code: 10-10-457Owned by: Telco Communications Group Inc. Celebrity Endorsers: None; relied on a no-frills theme embodied in the tag line "No fine print. No bull"

Access Code: 10-10-502Owned by: WorldxChange Communications Celebrity Endorsers: None; used the tag line "Talk Cents"

Access Code: 10-10-811Owned by: VarTec Telecom Inc. Celebrity Endorsers: Sugar Ray Leonard

COMPETITION

The $85 billion domestic long-distance market was largely divided among three companies—AT&T, MCI, and Sprint—which among them controlled between 85 percent and 90 percent of the business. MCI WorldCom was the first of the three to sense the market potential of dial-around services, something that smaller regional players in the long-distance industry were already exploiting in the early 1990s. "The major long-distance companies were losing minutes of usage to smaller carriers, some offering dial-around, others with prepaid calling cards, and realized they had to respond," remarked Robert Fox, a telecommunications analyst with Mercer Management Consulting.

MCI's success with 10-10-321 prompted AT&T, which had once dismissed the dial-around business, to belatedly enter the fray with the introduction of its Lucky Dog 10-10-345service. Lucky Dog was an AT&T subsidiary whose 10-10 rates were low enough to siphon customers from the company's established calling plans. "We just did not think customers would spend the time to dial the extra digits," said Howard McNally, president of Lucky Dog. "We were simply late," conceded AT&T chairman C. Michael Armstrong.

MARKETING STRATEGY

With the advent of dial-around service, long-distance companies switched their marketing efforts from signing up permanent subscribers to selling service one phone call at a time. And consumers, attracted by the novelty, responded to the marketing efforts, even though the major phone companies offered calling plans that in many cases were cheaper than their 10-10 services.

The first selling point of MCI WorldCom's 10-10-220 was the savings, as comedian Miller repeatedly pointed out in commercials for the service. Under the dial-around arrangement, customers paid a flat 99 cents for all calls under 20 minutes and 10 cents a minute thereafter. There were a number of caveats to this seemingly simple equation, however. For example, although a 20-minute call cost an inexpensive 5 cents a minute, a 1-minute call to the same recipient was an exorbitant 99 cents a minute. But the use of celebrities such as Miller and Lithgow in dial-around ads was designed to cut through the clutter of normal long-distance advertise-ments—not to mention the fine print of the plans them-selves—and to plant the numbers themselves in the forefront of consumers' minds. "The brand name is the product name," said Kelly Seacrist, a spokeswoman for MCI WorldCom, in explaining the approach.

One of the reasons dial-arounds became prominent in the 1990s was that consumers were increasingly tuning out the traditional ads for telephone service. "The industry found out that residential customers believe very little of what they hear any more," said Robert Self, publisher of Dr. Bob's Long Distance for Less, an industry newsletter. "You about have to take a 2-by-4 and hit people over the head to get new customers."

The celebrities in the ads invariably extolled the simplicity of the plan's savings features while avoiding discussion of details that might confuse consumers or dissuade them from using the dial-around service. When an inquisitive long-distance caller asked in one of the ads how exactly dialing around could save him money, the sardonic Miller quipped, "How does popcorn pop?" His "What am I, a genie?" pose helped put viewers at ease and made them feel that they were not merely being tricked into entering into an arrangement so labyrinthine in its restrictions that they could have no idea whether or not they were saving money. In another MCI WorldCom ad Buffalo Bills quarterback Doug Flutie sounded a similar tone when contrasting 10-10-220's dialing restrictions to his offensive playbook. "If only football were this easy," a grinning Flutie pronounced.

OUTCOME

According to MCI WorldCom spokeswoman Seacrist, consumer response to the proliferation of dial-around ads in the 1990s was "huge." Even impartial observers of the long-distance industry tended to agree with this assessment. Dial-arounds "seem to be popular with consumers because they can use a different phone company on a call-by-call basis—they don't have to commit to leaving their own carrier," said Becky Sachs, a spokeswoman for Telecommunications Research and Action Center, a consumer advocacy group that monitored the industry. "Also, there is very aggressive advertising that intrigues people."

Sachs pointed out, however, that there was also a lot about the ads featuring Miller and other celebrities that confused consumers. "It is very difficult for the average consumer to really decipher what is going on in these ads," she cautioned. Among the many catches that Miller and his fellow spokespersons failed to point out, according to critics, was that, while some ads referred to a "50 percent" savings, they failed to specify the base on which the savings were calculated. In addition, some dial-arounds charged a service fee in any month a user made a call, with some fees as high as $4.50, so that a single 99-cent call could cost as much as $5.49, or upwards of 27 cents a minute.

Despite these complaints MCI WorldCom claimed that its customers were well served by the dial-around service. An internal customer survey conducted in 1998 revealed that 88 percent of MCI WorldCom's clients rated themselves as "satisfied to very satisfied" with the 10-10-321 and 10-10-220 programs. A similar poll conducted by the independent group J.D. Power & Associates, however, found that only 36 percent of those dialing around were "extremely or very satisfied." The most satisfied dial-around customers tended to be those who took the time to review their calling habits and acquaint themselves with the rules of the calling programs before they picked up the phone. "MCI is not the Salvation Army," cracked industry watchdog Voit. "They are a publicly traded company that operates to make money for the stockholders. They can't do that if they are giving away long distance services."

Satisfied or not, more and more people were trying the dial-around alternative. According to the Yankee Group, as of 1999 about 11 percent of U.S. households were using one or another 10-10 number. Of these about 47 percent said that they had saved money with the service; about 29 percent said that they were not sure if they had saved money; and 20 percent said that they had not saved money. The future looked even brighter for the dial-around market. "There's no question it's growing, and as long as the providers keep hammering away with promises of big savings, the trend should continue," Voit said.