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Priceline Unleashes Long Distance Service

Expanding on its unique "name-your-own-price" business model, Priceline.com, Inc. Monday introduced its long distance phone service, which is set to launch in early 2000.

The service will make it possible for U.S. clients to name their own price for Internet protocol-based communications to almost anywhere in the world with no strings attached. Priceline.com (PCLN) plans to expand its telecommunications services further to offer a name-your-own-price business-to-business long distance service later in the year.

Net2Phone Inc., a leading provider of voice-enhanced IP telephony, is the first company to join Priceline's impending service, pledging an $18 million participation fee in the three-year agreement. Priceline customers will name their own price for phone-to-phone international and domestic long distance calls over Net2Phone's (NTOP) IP network.

Priceline.com decided to offer long distance service after 43 percent of those who answered a survey indicated interest in the company's potential venture.

Priceline.com makes these savings possible because its Net pricing system creates network efficiencies for telecommunications providers, the company said.

"Internet protocol is the future of communications and will continue to reduce the cost structure of providing this service," said Daniel H. Schulman, president and chief operating officer of priceline.com. "Given this trend, Priceline.com's unique demand collection system offers a win-win solution for customers and telecommunications companies. For the first time, customers can use the Net to price their calls."

Priceline.com will offer a few long distance service plans, including:

  • Domestic time blocks -- customers may name their own price for blocks of 60 minutes, 120 minutes or more of long distance time for interstate calls
  • International time blocks -- clients may name their own price for blocks of long distance time for calls to a specified country
  • "Call Anywhere" program -- customers may name their own price for blocks of time that can be used to call multiple designated locations