1-900-EXTINCT?

Legions of fortune tellers and sweet-talkers may be out of work soon as AT&T discontinues its 900-number service at the end of the year. The move was no surprise to anyone familiar with AT&T's difficulties in this market. But inexplicably, an entire industry of psychics didn't see it coming.

Despite his preternatural vision, “Franco,” a 900-line clairvoyant, said he had no idea AT&T was discontinuing the service or that it could affect his business. He even seemed unaware of the irony dripping from his chief complaint about the 900-number fortunetelling landscape: “This job is very unpredictable.” But he was optimistic about his career options. “I have a nice BMW,” he said. “Probably I'll just turn it into a cab or something.”

Eric Cherry, CEO of ICN, a Delray Beach, Fla.-based service bureau that has run 900 numbers for more than a decade, blames the industry's woes on carrier problems, including the failure to make 900 numbers accessible via cell phones. “If I had cellular access, my business would triple in 60 days,” he said.

But the 900 industry's true Achilles' heel, Cherry said, is “chargebacks” — callers who refuse to pay their charges. The only penalty for scofflaws is a block preventing them from future 900 service, but even this vanishes when a user moves or changes phone numbers. When psychic and sex lines tried to boost call volume by promising a few free minutes at the start of each call, many callers ended up with bills they didn't expect, which sent chargebacks through the roof — about 50% of all psychic calls, Cherry said. For adult chat lines, the number is even higher.

These costs revert to the content providers, which employ the folks manning the phones and get a lion's share of the revenues. (As Franco put it, among psychics, “the only person who makes the beaucoup bucks is the pimp.”) But many of these companies didn't pay their bills to AT&T, ultimately forcing the carrier to exit the business.

AT&T quietly halted billing services for new 900 customers as of Jan. 1 and will discontinue billing for all 900 numbers on Dec. 31. For a time, 900 lines can transfer to MCI WorldCom, which said it will continue the service. But many wonder how long the industry can last.

“Cindy,” who mans a different kind of 900 number, said workers in her trade already have begun transferring to 800 numbers that bill to users' credit cards — a practice that precludes chargebacks — or setting up Web sites to replace their 900 lines. Using PayPal, online fantasy girls can earn more than $1 per minute, Cindy said. “Some girls are making $1500 a week.” Perhaps AT&T could learn a lesson from them.