A Utah company is offering long-distance phone calls anywhere in the country any time of day for 25 cents per call no matter how long the caller talks and only requires a one-time $25 signup fee.
The registered agent for the company says the company is registered to do business in all states and has an office in New York. But an employee of New York's Department of State, Bureau of Corporations, Albany, says no such company as Mountain Tel or Mountain Telcom is recorded there.Gary Randall Whetton, listed in Utah incorporation records as the agent for Mountain Tel, said he has "no idea" why New York officials could not find records of the company there. Mountain Tel filed papers in that state, he repeated.
An ad for Mountain Tel, published recently in the Deseret News and the Salt Lake Tribune, offered a "new choice calling plan." It would make a long-distance call anywhere in the country for only 25 cents, after payment of a $25 "acceptability fee."
Jim Paine, chief investigator for the Division of Consumer Protection, would neither confirm nor deny whether the division is investigating Mountain Tel. "The only information (we give) is whether we have taken legal action against a company, and we have taken no legal action against this company," he said.
But another Utah official, who asked not to be quoted by name, said the state began gathering information about the company as soon as it started getting public inquiries on July 29.
"We went to work to find out who the company is and how they can provide service for what was advertised," the official said.
"Everybody says it looks too good to be true. When something looks too good to be true - it usually is," he said.
But Julie Orchard, secretary to the Utah Public Service Commission, said Thursday that neither she nor any of the three commissioners had received any inquiries or complaints regarding the firm.
Whetton told the Deseret News the company is able to provide long-distance calls at such a low price because "we own the lines." Asked to quantify that, he said the company owns 750,000 telephone lines throughout the world that cost $100 million.
Whetton said the company bought the lines on credit. "Over a period of time, we will pay the lines off."
He declined to say who provided the financing. "The people we bought the lines from, and I can't say who - which company it was. Because of our contract, I can't disclose," he said.
So far, 400 or 500 Utahns have signed up for the service, according to Whetton.
Because the company is buying the telephone lines, Whetton said, "It doesn't cost us a permanent charge to use the lines."
When the Deseret News contacted the New York State Bureau of Corporations, a man there said that a domestic company - one based in New York - must be incorporated in order to do business in that state. A foreign corporation, one based in some other state, must file for authority to do business there.
A woman at a telephone number listed in the ad said once the $25 fee is paid, subscribers can call anytime, anywhere in the United States and can talk for as long as they want for a 25-cent flat rate.
Whetton said Utah officials were gathering information on Mountain Tel because "a man from my company incorrectly filed a tariff."