Enter the long-distance FreeWay

If the question for long-distance carriers is how low can you go in price, BroadPoint Communications says all the way to zero. Last week the Maryland-based carrier introduced FreeWay, a long-distance service that is free if callers listen to targeted advertisements.

The service is currently offered only in Pittsburgh.

Customers register by filling out an on-line application that includes questions on demographics. Subscribers then can call a toll-free number, enter a personal code followed by the number they want to call, and listen to five- to 15-second commercial messages aimed at them. Each commercial earns them approximately two minutes of free calling time.

"It's a win-win-win situation," said Perry Kamel, president and CEO of BroadPoint. The service is advantageous to consumers, who can save money on long-distance; to advertisers, who can directly target consumers; and to the telecom industry, which could have a new revenue source, he said. Because Pittsburgh customers can provide feedback on the service and ads through BroadPoint's Web site, Kamel believes the company will be able to develop a high-quality offering before it attempts a national launch. The company will ensure subscriber privacy by not releasing names to advertisers, he said.

Many target groups will be attracted to advertising-based phone service, especially those that spend a lot of money on long-distance, said Yankee Group Analyst Brian Adamik. "Certainly advertisers will be champing at the bit to know whom they're reaching," he said.

BroadPoint is working with several advertising agencies and receives financial and consulting support from Dusquesne Enterprises, a regional energy services company.