To buy or not to buy: that is the question telephone customers are having to ask themselves as deregulation of the telephone industry triggers a boom in sales of phones and equipment.
Few American households now own their telephone equipment--about 2 percent, according to some estimates. The other 98 percent lease their phones from the telephone company.
But telephone ownership now is making headlines because of the massive reorganization of the Bell Telephone System. The changes resulted from a decision by the Federal Communications Commission and from a settlement agreement in the antitrust case brought by the Justice Department against the American Telephone & Telegraph Co., the corporate parent of C&P Telephone Co. locally. Collectively, they are known as the Bell System.
Telephone ownership also has gotten a boost from a Bell System decision to sell to customers the equipment already in their homes at prices ranging from $19.95 upward. Bell also plans to sell equipment from its remaining inventory.
At present, customers still have a choice of leasing or buying telephones for their homes. But once the C&P inventory of lease equipment has been exhausted--and the company won't say whether that is a month or a year away--customers will have to buy the equipment they need.
The Chesapeake & Potomac Telephone Co. has filed in Maryland a petition outlining plans for the Bell phone sale, which will begin Jan. 13 unless disapproved by the Maryland Public Service Commission. Similar proposals will be filed in Virginia and the District within the next two to three months, phone company officials said.
For some consumers, this could be a good deal. But for some others, it may not be.
"The answer depends on the age and condition of the equipment in the house now, the price that Bell wants for the equipment and how it compares to what else is available," said Lee Richardson, former president of the Consumer Federation of America and now a consumer advocate who specializes in telephone issues.
Richardson said some telephones have been in customer homes for 20 or 30 years. "While they still may work, they may not be what the customer could get for $20 from some other source, such as a department store, a phone specialty shop or a drugstore."
Richardson contends that telephone ownership is almost always better than leasing.
According to Bell officials, a Maryland residential customer with a flat rate and a standard Touch-Tone telephone now pays $2 a month to lease it. (The Touch-Tone equipment rate for the Virginia customer is $2.10 a month; for the District customer, $2.71 a month.)
The standard Touch-Tone is scheduled to sell for $41.95 to Maryland Bell customers who have one on their premises. The proposed price is $54.95 for standard Touch-Tone telephones sold out of the C&P inventory in Maryland.
At those prices, the telephone would pay for itself in about two years.
Telephone customers who shop around, however, may be able to find a standard Touch-Tone telephone for an even lower price at one of the discount, specialty or regular retail outlets where they now are sold. These stores often have specials where regular prices are reduced, offering consumers an even better deal.
Many telephone customers have been reluctant to buy equipment, however, because they thought it was illegal and because they thought they would have to pay a rental fee to the phone company on top of their equipment purchase price, Richardson said. "People need to understand that a telephone is like a steam iron: you go and buy one and then plug it in," he said.
But the main point, he said, is that people don't have to spend a lot of money to get good quality.
"Telephones rarely break down, so the warranty you get through leasing your telephone isn't worth much. Phones are very simple instruments and don't need much maintenance."
Some phones do break, however, Richardson acknowledged. "So you ought to read the warranty on the one you buy, in case you get the one out of the million that breaks due to a manufacturer's error."
In addition, consumers should ask where repairs can be made. In some cases, the store will arrange for repairs; in others, the consumer will have to contact the manufacturer to have repairs made.
Richardson also said many telephone customers continue renting fancy equipment from the telephone company--such as automatic dial and memory storage--because they don't realize they can buy equipment with those same features.
Other customers don't buy because their old equipment is wired into place, rather than plugged into jacks. "They don't know they can get a plug-in device from a phone store and make the change themselves," he said.
"And yet all they have to do is disconnect four non-dangerous wires in the wall and convert to the plug-in. The phone stores have booklets telling how to make the changes and they sell the wiring, jacks and extras, so it is very simple thing to do.
"It is easier than working with electricity, because it isn't dangerous."