ICN - More Than a Bargain
by John Freeman and Emmanuel Goldstein
Last month, we printed a story on a company called ICN. This month, we have more details, which may prove useful. The Independent Communications Network supposedly allows you to make all the calls you want for $100 a month. To sign up for this, you need a sponsor. You can also, if you choose, sponsor other people. If you manage to convince somebody to use this system, you make $25. If that person convinces someone else, they make $25 and you make $5. It goes down six levels, so the maximum you can make is $50 on one sale. But there's no limit to how many sales you can make. That's how that end of the deal works. Some people who sign up for ICN choose the "marketing plan," which is what was just described. Others choose both this and phone service (which is referred to as "partyline service"). And some just choose to use the phone service alone. We called ICN to ask about signing up. The person at the other end said that if we wanted to sign up, we'd be given an 800 number to call to get our dial tone. Everyone gets the same 800 number. If it's busy or if it rings more than once, the customer must hang up and try again. He said straight out that we probably wouldn't get through the first time. He said on the average you have to redial for about ten minutes to get the dial tone. He said that evenings were very busy and it wasn't a good idea to try then. "What about days?" we asked. "They're busy too," he said. What ICN is doing is reselling ATT's WATS lines. This in itself isn't illegal. But ICN is estimated to have over 8,000 customers and only 54 lines for their long-distance network. It would be quite a trick to find out how many customers ICN really has. All personnel seem to take offense at this question. ICN was started in Wautoma, Wisconsin, on July 15, 1986. It didn't take long for complaints to roll into the Wisconsin Public Service Commission. In September, ICN relocated in Cody, Wyoming. The representative told us that there is no corporate income tax in Wyoming. ICN saves a lot by never sending out bills. The $100 is due on the last working day of the month. Presumably, if they don't get paid, your access code is shut off. There is also another method, which is a little frightening. They subscribe to a service known as Checkomatic, which will automatically take $100 out of your checking account every month! We have yet to find anyone who has successfully completed a call on this system, or even gotten a dial tone. The 800 number we obtained never stops ringing. And not all the complaints come from irate customers who can't get through. In ICN's first ad campaign, they gave an example of a WATS number. The number was given presumably so customers or sellers could see what a real 800 number looks like. The number they gave, 800-ICN-FREE belonged to the Life Control Institute in New Jersey. LCI was stuck paying for every call that people made to the sample 800 number, thinking they could get free phone calls. Eventually the people from LCI sent ICN a letter requesting that they pay for their share of the WATS bill, but ICN never sent a response. According to the representative, customers have 30 days to claim a refund. He also told us that once you did get through, there were three possible ways your call could be completed. The first was optic-fiber, which gave the best connection. The second was FX copper, which was fairly good. The third was AT&T WATS, which he said was the worst and that you could barely hear the person on the other end. The company has some kind of a deal worked out with AT&T in which they get more lines put in as they get more customers. Their codes are six digits long and calls can be made to anywhere in the United States, including Alaska, Hawaii, and the Virgin Islands. Calls can't be made from Alaska or to Canada or Mexico. We did a little detective work on ICN and this is what we came up with. The General Manager is Larry Hartsough, the President is John Heeg, and the Vice President is Robert Boch. The current address for ICN corporate headquarters is 808 Meadow Drive, Cody, Wyoming, 82414. At this address they have 25 lines allocated as follows: 307- 587-4700 to 09 is the customer service department. As of Monday, November 3, there was only a five-line hunt sequence. 4701,6,7,8,9 are being eliminated. They have another ten-line hunt sequence: 307-587-4730 to 39. We suspect this is used for sales people to call in regarding sales that have just been completed. On these lines, the representatives seem much nicer. Some useful info: Larry Hartsough's phone number: 307-527-6812. The WATS resale switch is located at 526 West Main St., Wautoma, Wisconsin, 54928. The WATS service number is 800-367-8672, which translates to 414-765-9027 in Wisconsin. We believe this is the number that is supposed to give you a dial tone. We've tried hundreds of times at all hours with no success. This line has a 54-line hunt sequence. It used to always be busy but now they've "fixed it" by making it ring forever instead. The offices in Wyoming are in a small office building, formerly the Marathon Oil office building. It's about 25,000 square feet and approximately 55 people work there. They use a Novell Star "state of the art" computer with Epson Equity 1 terminals. They tell us there are other companies like them all over the country, including one called Ideal in Washington state. Ideal supposedly charges $120 per month. We thought it would be interesting to find out what the rates are for AT&T WATS lines to see if these people are doing well or not. To start with, it costs $123 to install a line and $99 to have someone come out to do it. Rates for "Service Area 6," which enables you to call the entire United States are: Day Eve Night ~~~~~~~~~~~~~~~~~~~~~~~ First 15 hours $21.77 $14.15 $9.63 Next 25 hours $19.37 $12.67 $9.63 Over 40 hours $16.98 $11.04 $9.63 If ICN has 54 working lines and they are all in use at all times, it would cost them about $8,000 per line per month, close to $430,000 in line charges alone for 54 lines, assuming they pay the lowest rate. Now, 54 customers paying $100 each only bring in $5,400. It doesn't sound very profitable. But consider this. There is a very definite limit on the line charges, high though they are. There are only so many hours in a month. But there is no limit to how many people will send ICN $100. So, if instead of a mere 54, their estimation of 8,000 actually sent them money, they'd bring in $800,000. After paying the phone company and the salespeople, they'd still have over a quarter of a million dollars coming in per month. And if that's not enough, consider this. What if those WATS lines weren't really available 24 hours a day? From the beginning, they tell you how days and evenings are the worst times to call and you should never expect to be connected during those hours. So why bother leaving the lines on in the first place during those times? Nobody is going to expect to get through anyway. This maneuver would bring their costs down to $180,966.96 in total for the WATS lines. They'd only need 1,810 customers to break even. The possibilities are endless in a situation like this, where the customer never really knows what's going on. That's why we feel it pays to stay away.