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American Morning

Interview with Lauren Young

Aired August 20, 2002 - 08:43   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

PAULA ZAHN, CNN ANCHOR: On to the cellular phone industry now. It is sending a pretty clear signal to its customers, get ready to pay more. With fewer new subscribers and much more competition, cell phone service providers are adding extra fees in places where you might least expect that. On top of that, it appears all cell phone customers are not created equal.
Lauren Young from "SmartMoney" magazine is here to sort through this telecommunications maze or mess, depending on what your perspective is -- good morning, Lauren. Nice to see you.

LAUREN YOUNG, "SMARTMONEY" MAGAZINE: Hi, Paula.

ZAHN: So what's the deal with these new fees?

YOUNG: Well, phone companies are just not making as much money. Right now, the average person is paying about 14 cents a minute, and while that may sound high, they were paying 56 cents a minute about five years ago. So revenues are really, really cut short. And the other thing is that people are switching phones. One-third of all customers are changing their policies every year.

ZAHN: So are these fees pretty clear, do you think, to the average customer on their bills, or do you have to get out the old magnifying glass to find the added fees?

YOUNG: Do you look at your phone bills?

ZAHN: Yes, I do.

YOUNG: Eight pages, and they are so confusing. So they're very hard, and usually it's some fine print on the last page. You know, they put little messages on the back. That is where you are finding out about these fees.

They are really not coming out and blatantly saying this is the new fees, that structure that we have.

ZAHN: Ever since I've been slammed by MCI, I do have a magnifying glass -- impossible to follow.

Let's talk about some of the new fees the average customer will be looking at. We'll put up on the screen now this graphically to help reinforce what you are saying.

YOUNG: Great. Sprint, first of all, one of the worst offenders. Couple things going on. They have some fees -- for example, $3 if you're not a great customer. Basically we are talking about this class system here. You spend less than $100 a month, forget about it. You're paying for service. People who are spending about $25 a month, they are paying about $3 just for the service.

ZAHN: That's not fair.

YOUNG: No, it's not.

ZAHN: Talk about the extended peak time calling, between 9 p.m. and 8 p.m.

YOUNG: Used to be the peak time went until 8:00 p.m., now it is until 9:00 p.m., so you are paying for that as well. You are also paying Verizon now, if you check, if you call 411, it used to be 99 cents. In October it is going to go up $1.50, $1.25.

ZAHN: Give me a break. For one call?

YOUNG: And AT&T is also raising the cost of calling 411.

ZAHN: Wow. But sometimes they actually put the call through for you, so for some folks in a hurry...

YOUNG: It is really nice, you do have...

(CROSSTALK)

ZAHN: Driving in a car when they are not supposed to be talking on the phone. Talk about deducting airtime when customers actually check for phone usage?

YOUNG: That is right, and that is something that Sprint's getting in trouble with. When you call right now, and you call to check how many minutes you've used, they are charging you for that.

ZAHN: You're kidding.

YOUNG: No. Basically, they are nickel and diming people, and they have to -- well, they don't have to, but they're just not making as much money. What industry is doing terribly right now? Telecom.

ZAHN: So what is your best advice this morning to help consumers bring down their cell phone bills?

YOUNG: One enterprising Sprint customer told us that she is going to the Sprint store to check her bill instead of calling, because she doesn't want to pay the dollar. It is like going to an ATM a mile away where you know you know you are not going to pay the surcharge.

ZAHN: Great idea, but you have to have the time to do that.

YOUNG: You can check online a lot of the time. A lot of the phone companies are encouraging people to go check their bills online, and the other thing you can do, is there are a bunch of different services out there, lowermybills.com, a bunch of them -- Yahoo has a savings finder, myrateplan.com and also something called Telebright (ph), which is done by "Consumer Reports." It is a great service, but you do have to pay for that one.

ZAHN: So when you pay for the service, what do you learn?

YOUNG: You learn -- I went on last night, I checked my phone bill just to see -- you basically need your phone bill in hand, because it will let you know how many minutes you use, and you can kind of customize and figure out -- are you making long distance phone calls, are you making local calls, are you using prime-time...

ZAHN: Wait a minute. Do they have access to that information, or you feed the information from your bill into their system?

YOUNG: Exactly. You feed the bill -- all that information in...

ZAHN: Does it stay in the system so they get to call all your best friends?

YOUNG: That is a great question. When I come back next time, Paula, I will know that. But it does help you figure out the best plans in your calling area, and they really do read through the fine print, so you know if you're getting slammed.

ZAHN: Quick final thought on people who cancel their services and what they should do to protect themselves from getting stiffed?

YOUNG: You're paying 150, $200 to cancel your service, so be really careful when you do that. Phone companies will never tell you when it's time for your contract to end. You have to call and ask them. They don't tell you when 12 months is up or two years is up. So, do your research and be prepared.

ZAHN: Sort of like when you were renew magazines. You know, the renewal notice comes months in advance.

YOUNG: Not "SmartMoney."

ZAHN: Well, not "SmartMoney." You have a magazine that is run differently. Maybe that will give your magazine folks a good idea. Pester us six months before our subscription is up. Lauren Young, thank you.

YOUNG: Thank you, Paula.

ZAHN: Always good to see you, appreciate your advice.

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