N11: Dialing Is The Only Thing Simple p. 54

By: George Garneau Newspaper lottery winners give up their N11 numbers because
they are not in their core markets; scarcity forcing tough
decisions for entrants into phone information services sp.

FOUR NEWSPAPERS WON three-digit N11 phone numbers in a drawing to allot the numbers to audio information services in Florida's three biggest metropolitan areas, but two papers walked away from their numbers.
Knight-Ridder Inc.'s Miami Herald, Tribune Co.'s Fort Lauderdale Sun Sentinel and Orlando Sentinel, and New Times Inc.'s alternative Miami weekly New Times were among the winners selected in the May 5 drawing by Southern Bell Telephone Co.
The Herald and New Times later gave up their numbers, apparently because the numbers they won were not in their core markets.
In the first lottery of its kind, and with the approval of the Florida Public Service Commission, Southern Bell handed out 211, 311, 511, 711 and 811 numbers in Miami, Fort Lauderdale and Orlando. It reserved 911 for emergency services; 611 is for phone repairs.
To operate a number, it costs $25,000 for connection plus between $1,500 and $10,000 a month. Services can charge up to $5 a call. Lottery winners had two months in which to start service or forfeit the number.
The N11 numbers, a new phenomenon in commercial services, allow callers to dial in easily to get such services as sports scores, weather reports, stock quotes, movie listings, flower delivery, classified ads and yellow pages-type ads.
There were 18 bids for 15 numbers in the lottery. Other winners were Three Digit Partners, Infoservice Inc., Metro One Direct and Miami Gardens Florist.
Some winners were less than thrilled. The Herald, for instance, won 811 in Fort Lauderdale and nothing in Miami, while its northern competitor, the Sun-Sentinel, won 211 in Fort Lauderdale and Miami.
Miami's New Times opted not to operate 311 in Fort Lauderdale.
With 211 also won by its Orlando Sentinel, Tribune hit the lottery.
Since the numbers were nontransferable, the lottery left those papers that lost out on their core markets up a creek.
Neither the New Times nor Herald, which already operates an auto classified service through a seven-digit number, could be reached for comment.
Their Fort Lauderdale numbers were offered to other companies while they remained on the waiting list in Miami.
Before pulling out, Herald audio service manager Sean Breen told E&P that having one number in Broward County, not Dade, would force a change in plan.
"We've got to regroup and look at what we've got and what's appropriate to have in Fort Lauderdale but not in Miami," he said.
With the success of N11 numbers highly uncertain, he said, "It could be that this is just another way to lose money."
Breen could not be reached after the Herald gave up its number.
BellSouth and Cox Enterprises Inc. are betting differently.
The yellow pages publisher Bell Advertising and Publishing Co. (BAPCO), like Southern Bell a subsidiary of BellSouth, won numbers in all three cities ? 711 in Fort Lauderdale and 511 in Miami and Orlando. In partnership with Cox, BAPCO plans to make yellow pages and newspaper classified advertising available by phone for a fee to callers.
Cox's Palm Beach Post already operates an experimental 511 number in its area, where it charges 35? a call. It pays $5,000 a month for the number and splits the revenue about in half with Southern Bell.
The service, which takes about 6,000 calls a week, is considered a development project and is not expected to be profitable in the short term, publisher Tom Giuffrida told the Associated Press.
Since conducting the nation's first N11 lottery, Bell South has received calls from other phone companies interested in divvying up N11 numbers, said Southern Bell spokesman Spero Canton.
He said Southern Bell plans to allocate N11 numbers for smaller, "tier-two" cities ? Daytona Beach, Gainesville, Jacksonville, Panama City and West Palm Beach ? later this year ? by lottery, if necessary ? then tiers three and four.
The West Palm Beach-based Post, now operating provisionally, will be grandfathered in.
As the first one indicates, lotteries pose serious pitfalls for potential N11 operators, but Southern Bell said it was the fairest system it could think of for allocating the scarce numbers.
The telephone industry is trying to come up with an abbreviated dialing system that would increase the availability of numbers, from five N11 numbers per market.
The industry is close to agreeing on four abbreviated code schemes. Two have four digits, two have five digits, and all either start or end with the pound sign (#).
"It's a temporary problem and may even be an artificial problem," Jim McKnight, Cox Newspapers telecommunications vice president, said of the scarcity of N11 numbers.
McKnight said most phone companies have refused to offer N11 numbers for competitive reasons, including plans to offer information services through 411 lines.
There are other complications.
Southern Bell does not serve thousands of local phone customers in the Orlando Sentinel's circulation area, so the paper is negotiating with Sprint/United Telephone of Florida to extend N11 service to its customers.
Another issue is, after they get paid N11 numbers, what do newspapers do with with their existing free phone services?
The Atlanta Journal and Constitution faced the question last year and decided to switch the papers' most popular free information services ? stocks quotes, sports, weather, horoscopes ? to 511 at 50? a call. Contests, reader-response calls and other editorial-related services remain free.
The result was that call volume dropped between 85% and 90%, McKnight said, but revenue soared 300% to 400%. Free services still get 200,000 calls a month; the messages contain no ads but are instead subsidized by 511 revenue.
A month ago, the Atlanta papers put their new classified and yellow pages services on 511.
The services are not profitable and are not expected to be the source of profits, McKnight said. Instead, after achieving customer acceptance, they are expected to contribute to revenues by, for instance, allowing car dealers to add their full inventory lists to the electronic service.
"It is much more than audiotex," McKnight said. "It is the foundation for an entire range of electronic services."