The Long-Distance Runners

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A T& T and its rivals are competing all-out for one another's customers

It looked for all the world last week like a gas station or a bank or a rent-a-car company trying to lure customers by offering discounts on television sets or getaway weekends. Instead, it was A T & T signaling that the once straightforward business of providing long-distance telephone service has drastically changed.

Prodded by new competition from companies like MCI Communications and GTE-Sprint, A T & T announced a program that gives its 80 million residential customers credits toward buying 50 different products and services. By making $15 to $300 a month in long-distance calls, customers become eligible for reductions on Polaroid cameras, airline tickets and nights in a Howard Johnson's motel. If callers reach out and touch someone often enough or long enough, they can talk themselves into $500 off a Toyota truck. The A T & T plan is aimed at helping the company hang on to its dominance of the $45 billion U.S. longdistance market.

The A T & T offer is all part of the new era of choice in long-distance service. Before the end of 1986, telephone users across the U.S. will be asked to pick one of several competing companies as their primary long-distance carrier. If they cannot make up their minds, people will automatically be assigned one of them, probably A T & T. These developments are an outgrowth of the Jan. 1 breakup of the Bell System, and of dozens of regulatory and technical changes in American telecommunications during the past 15 years. Says Edward Carter, marketing vice president of MCI: "For American consumers, it is the most significant change in a day-to-day necessity they've ever seen."

The battle is most intense in Charleston, W. Va. On July 15, Charleston will become the first U.S. city to be technically capable of offering all phone users a choice of long-distance carriers. In August, Alameda, Calif., will become the second city to offer the option. Up to now, only people with Touch-Tone or modified dial phones could use a long-distance company other than A T & T, a technical limitation that excluded the 40% with old-style rotary dials.

The chief challengers to A T & T are MCI and Sprint, small but nimble carriers that nibble away at A T & T's customers with high technology, growing networks and lower tolls. Along with lesser-knowns like Chicago's Allnet, the big competitors are mounting publicity and ad campaigns that would make Barnum proud. Actor

Cliff Robertson does the pitching in television ads for A T & T, while Comic Joan Rivers weighs in for MCI. Companies are offering lures aplenty. A T & T and MCI first gave away an hour of free long-distance time for signing up; Sprint quickly matched them. Before the campaign is over, each consumer in Alameda will be reached four times by mail or phone by Sprint promoting its discounts. There are promises of fee cuts and refunds if users are not satisfied. A T & T plays up services that its rivals cannot match. Examples: collect and person-to-person calls and automatic credit for misdialing.