time to cut the cords on directory assistance?
By Bruce Mohl
Sunday, January 22, 2006
Is it time to deregulate directory assistance?
The idea may be heresy here in Massachusetts, where state
lawmakers have granted residential customers 10 free
directory assistance calls a month. But with the price of
directory assistance rising to unheard-of levels and
regulation stifling innovation, maybe it's time to try
Western European countries began deregulating directory
assistance in the late 1990s, requiring consumers to select
a provider rather than ceding the business to the customer's
Results have varied from country to country, but consumers
overall have a broader range of choices. Kathleen A. Pierz,
managing partner of the Pierz Group, a directory assistance
consulting firm in Clarkson, Mich., said some European
companies trumpet low prices, while others offer
concierge-style operators willing to track down a specific
type of restaurant and even provide directions on how to get
Some companies even cater to a specific customer
demographic. In Britain, two directory assistance firms
have sprung up that cater to gays and lesbians. The
companies look up numbers, but also maintain lists of
businesses that are gay friendly.
In January 2002, the Federal Communications Commission
became so intrigued by the idea of competitive directory
assistance that it began taking public comments on adopting
a European-style system, but that's as far as it has gotten.
One reason for that is the opposition of local telephone
companies, which dominate the $8 billion-a-year directory
assistance business. Phone company executives say the price
of directory assistance has risen in recent years to reflect
actual costs but has now stabilized. They also say
consumers have plenty of options for looking up a number,
many of them free.
''The FCC has a lot more pressing issues to deal with," said
Thomas Moran, executive director of Verizon LiveSource
Marketing, which provides directory assistance service for
all of Verizon's landline business and some of its wireless
business. It also provides wholesale service to other
There are alternatives to directory assistance, but most of
the options have limitations.
Phone books are often out of date by the time they get
delivered. Free online directories are fairly accurate for
business listings, but residential changes often lag months
The price is right with a service called 1-800-Free411, but
you have to dial a lot of numbers and listen to a brief
advertisement in return for receiving the listing.
I tried to find the listing for a person who moved from
Dorchester to Roslindale in November and had mixed success.
Verizon, Cingular Wireless, and 1-800-Free411 all had the
new number, but Switchboard.com, White-pages.com, DAplusUS,
and Bigbook.com didn't.
The biggest barrier faced by would-be competitors is the
stranglehold that dialing
411 has on the American psyche. Infone of
Beaverton, Ore., offered as much as 15 minutes of
personalized directory assistance service for just 89 cents,
but it couldn't persuade enough customers to dial
888-411-1111 to make a go of it.
Long-distance companies may be headed in the same
direction. Plagued by customer defections and directory
assistance that can only be reached by dialing an area code
plus 555-1212, many long-distance companies appear to be
deliberately pricing themselves out of the market. MCI,
which was acquired last year by Verizon, charges $3.49 for a
directory assistance call.
Deregulation would put every provider on equal footing.
Customers would probably still dial 411, but they'd have to
punch in a few extra numbers directing the call to the
specific provider they want to use.
That may be confusing initially, but it couldn't be any more
complicated than the existing system, in which choice is
largely limited to the consumer's selection of a phone
carrier and the cost of directory assistance is buried in
the company's fine print.
Verizon, for example, charges $1.25 for directory assistance
calls. But because in-state directory assistance calls are
regulated by individual states, in-state rates vary
dramatically by state. Verizon charges $1.25 for every
directory assistance call in Illinois, but in Ohio it
doesn't charge anything, and in Massachusetts it is required
to provide the first 10 calls for free.
Cingular Wireless, for example, charges $1.50 plus the cost
of air time, but provides service in English or Spanish,
connects the call at no extra charge, and is starting to
text message the name, address, and phone number of the
person being looked up so it can be stored for future use.
Cingular operators also provide movie listings, weather
information, and even turn-by-turn directions to a
Comcast has a split personality when it comes to directory
assistance. Its traditional phone service charges 35 cents
for directory assistance and provides 10 free in-state calls
as required by Massachusetts law.
But the cable company's new Internet-based digital voice
service charges 99 cents for all directory calls and
provides expanded services, including horoscopes. Comcast's
service is provided by InfoNXX Inc., the largest wholesaler
of directory assistance in the United States and the number
one retail provider of directory assistance in the United
Industry officials say InfoNXX is pushing in Washington for
directory assistance deregulation so it could compete for
retail customers directly, but a company spokesman declined
to comment, saying ''we're committed to the wholesale
business in the US right now."
InfoNXX was founded by Robert Pines, the son of former
Massachusetts state Senator Lois Pines. Senator Pines was
very much in favor of directory assistance regulation,
opposing charges for the service back in the 1970s and
leading the fight for the 10-free-calls requirement, which
was approved in 1990.
Bruce Mohl can be