Big Deal

By Daniel Kadlec

If there's anything more annoying than political ads, it's the bombardment of silly, confusing messages from phone companies trying to win your business. Politics, at least, goes away for a couple of years. No chance the phone companies will rest. They've got way too much explaining to do--like why phone bills take hours to decipher, why customers aren't automatically switched to plans that best fit their calling patterns, why long-distance carriers shift you back and forth without your consent and why it can cost more to call the next county than the next state.

The phone gods would rather focus on things like last week's $115 billion merger of MCI WorldCom and Sprint. It's a record-size deal befitting record-size egos and has implications for Wall Street, where they're trying to identify tomorrow's survivors--and the targets those companies will swallow today. If you want to play, look for AT&T, MCI WorldCom, Bell Atlantic and SBC to survive; their targets include many small cable and wireless companies, along with such big outfits as Bell South, Global Crossing, Cincinnati Bell, Qwest and Nextel.

To keep things simple, consider a stock fund that invests primarily in telecommunications companies. In fact, a sector fund targeting any rapidly consolidating growth industry makes sense. The funds get a short-term lift from premium-priced takeovers of companies they own and do well over the long haul by owning companies that get big and dominate. The average telecom fund has trounced the average stock fund over the past three, five, 10 and 15 years, according to Lipper Analytical Services. The experience has been similarly fruitful in financial services and health care.

Off Wall Street, though, this big deal is no big deal at all. Antitrust concerns have been raised because an important competitor is being removed. But with Internet and regional Bell companies creeping into the picture, long-distance rates--now about as low as they've ever been--are unlikely to spurt higher. In the long run, the MCI WorldCom-Sprint combination may push us a little faster to telecom nirvana: one-stop shopping for local, long distance and wireless service; Internet access; and cable TV. Imagine all those connections in one jack (plus wireless) and a single bill based on how much data flows through the electronic spigot. We're headed there. But until that world emerges several years from now, you'll have to face the quagmire of fees, plans and rates that the companies perpetuate to their advantage.

Take MCI WorldCom's 10-10-220 long-distance service. You pay 99[cents] for the first 20 minutes--a bargain if you talk a lot. But you pay 99[cents] even if you're on the line for just a minute, making that rate one of the highest around. They don't tell you that. Here are some tips to keep your phone bill down:

--Every three months call your local phone company and ask if you are on the plan that best suits your calling patterns. They'll tell you. But you have to ask.

--Nights and weekends are still cheapest. But in most markets, the night rate has been moved back to 7 p.m. from 5 p.m. at the location where the call originates.

--Directory assistance is $1.40 per call in most markets when using 555-1212. Try local and national assistance at 411. If your area has it, the toll is still expensive at 95[cents] per call, but the clear choice.

See time.com/personal for more phone tips. E-mail Dan at kadlec@time.com and see him Tuesdays on CNNfn at 12:45 p.m. E.T.