Exposing Hidden Secrets In Analog Phone Line Costs

One of my late mentors in the telephone industry, the late Konstantin Grab, was a very tall affable Russian, who dubbed himself “Con Grab” (“Just call me Con”…), which always raised a chuckle from his Clients.  Luckily, this article will educate businesses and organizations as to not only “how not to really get conned”; and, also, providing info on a program they are likely not to have heard of previously in regards to the major increases that have been implemented in the past few years by the incumbent Local Phone Companies on their regular old analog phone lines. Analog lines have also become known as POTS lines (not to be confused with Marijuana!). The acronym POTS stands for Plain Old Telephone Service.

While boring regular analog phone lines that have been in place for decades, and should remain fixtures at most business facilities in the Country, 99% of them are on Retail rates of various discounts, versus hush-hush Wholesale rates that can reduce monthly phone charges from 20-60% on those same boring analog phone lines with the same major incumbent Local Phone Service providers. 

Here is why this is a big deal.  In exchange for handling just the Billing and Customer service, the authorized Wholesaler receives the ability to have existing Retail Customers phone lines repurposed to Wholesale phone lines, without porting any of their phone lines.  Since these analog phone lines are not being moved from one phone carrier to another, the business or organization doesn’t have the fear that they will experience a phone outage, due to changing phone service providers.

Why would the big phone companies do this?  Because they figured out that they could make more money wholesaling phone lines, where they don’t have to pay employee salaries or benefits, nor pay for expensive retail commercial space to house those employees.  They also are not incurring the costs of Customer Service or Billing (and Collection).  However, the incumbent local phone company still provides their service trucks and technicians, if customers have a phone outage, just like they do now.  So, effectively, businesses and organizations of any size in any vocation can now save money, and still, have the same phone carrier they do now!   Now, let’s turn our attention to why businesses still need these archaic analog phone lines when there are all the newfangled digital phone programs.

Analog phone lines are very important for the infrastructure of any business whether the purpose of those phone lines are dedicated to being used as fire alarm lines, burglar alarm lines, fax lines, POS lines, elevator lines, parking garage lines, and having a backup analog line in the case the business or organizations Internet Service Provider’s digital phone lines crash.

More importantly, many businesses and organizations need to always retain analog phone lines for their faxing, because not all fax machines recognize digital signals, as well as cases where the business or organization has Internet connectivity that doesn’t have adequate bandwidth for their digital phone lines, thus compressing the fax signal.  If they don’t, they could lose receiving Contracts, or Invoices sent to them by fax, since digital phone lines, also called VOIP (Voice-Over-Internet-Protocol) lines, may not deliver the intended transmission.

Similarly, a colleague of mine shared with me a story where a business had a fire that destroyed their building. And, their Insurance Carrier didn’t honor their insurance claim, indicating to them that the digital phone line they had hooked up to their fire alarm line wasn’t received properly by the Fire Department.  So, it would be a good idea for businesses to check with their Insurance Carrier, as to how their Policy may be interpreted.

POS (Point-Of-Sale) phone lines that transmit credit card processing batches of transactions are also best transmitted over analog lines.   The reason is that just like sending a large file over the Internet may not go through due to your Internet Service Provider (ISP), the same can be true of a large batch of credit card processing transactions, particularly similar to the situation described in faxing, where there is not enough adequate bandwidth due to compressing the signal beyond recognition by the receiving party.

For those businesses that have multiple locations, their Accounts Payable Department has to pay multiple phone bills per month from different Incumbent Local Phone Service providers. This is a hidden cost of time and labor.  However, a Wholesale Local Phone Service provider can typically consolidate all of the phone bills from all of the phone locations onto one bill monthly.  Imagine having to pay hundreds, or even thousands of individual phone bills each month from locations around the Country, because the incumbent local phone company does not consolidate the bills.

Next, it is important to know that there are different Plans for analog phone lines offered by both Retail and Wholesale Local Phone Service providers.  Yet; often times, businesses and organizations don’t even know that there is a difference. That can cost them. For example, if a business or organization has a fax machine that doesn’t include long distance they can ring up exorbitant long distance charges because it is not obvious that fax calls are charged just like voice calls, even though they are sending data.

On the other hand, if a business or organization has an alarm line, elevator line, or parking garage phone line or infrastructure line, it doesn’t need to have a Plan that includes a long distance feature on those phone lines.  Why pay for services you are never going to use. It doesn’t need any other features such as hunting (sometimes called roll-over lines), call-waiting, call-forwarding, etc.

Finally, these pesky analog phone lines have risen in costs in some Regions to over $100 per month!  Even for a small business that only has four (4) analog phone lines they might be spending $1,200 per line, per year and about $4,800 annually.  If they only save 20% on those analog lines, they are saving $960 annually. And, if they save 60%, they are saving $2,880 annually.  Yet; most businesses and organizations have no idea that they can obtain these analog phone lines at a Wholesale versus a Retail cost.


Ron Feldman
Ron Feldman
RON has been recognized by Who’s Who In California and Who’s Who In Lodging. He has taught Business Services Marketing at the Undergraduate and MBA University levels. Feldman holds an undergraduate degree in Mass Communications, as well as a Masters Degree in Educational Psychology. Feldman previously had been retained as a consultant twice by a major publicly traded NYSE payments industry company to re-engineer their order processing, and restructure their telecom costs, as he had done for the Clients of the second largest Utility Auditing Company in the World. He has saved businesses and organizations millions of dollars in performing Utility Audits, since 1994. He was also retained by another NYSE Retailer to advise them in regards to their payment solutions for their customers. Feldman received a U.S. business method patent for a transaction processing technology focused on the hotel industry that he invented while working with Citicorp in developing their global multi-party settlement system in the late 1980’s. During that era, Feldman worked with SITA/Sahara, a global Internet-based organizations of airlines and hotels, and was formerly Vice-Chair of the Association of Travel Marketing Executives. Feldman has represented the United States in the World Championships of Tournament Bridge in 1982, 1986, and 1994. He founded the first accredited organization of Professional Bridge Players. Feldman also served on the National Conduct and Ethics Committee of the American Contract Bridge League (ACBL), as well as its National Marketing Committee. He resides in Petaluma, California in the Sonoma Wine Country.

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