Do You Really Need a Landline Phone?

landline phone off the hook

Photo by Miryam León on Unsplash

Do You Really Need a

Landline Phone?

(And the expense
that goes with it?)

How Barbara cut her monthly telephone expenses from $117 to just $20 by switching her local and long-distance service from AT&T to her cable internet service provider.

 

As usual, it took me awhile to “get it,” but one day I woke up and realized I no longer needed to be tethered to AT&T and could get everything I needed in the way of long distance and local telephone service from my cable internet supplier.

Until mid-September, 2011, I had two landline phones; the residential phone my husband and I had installed when we moved into our home in 1989; the other, a business line added in 2000 when I opened my website and needed a separate line for doing business on the web. Through the years, it was a challenge to find the best long-distance rates for both lines, but things got better when AT&T began to offer affordable unlimited long-distance packages.

Do You Need a Separate Business Line to be Legal?

For years I preached to my home business readers that the use of a residential telephone number for business purposes might be a violation of their local telephone company’s regulations. In 1984 when the first edition of Homemade Money was published, I learned that each state had a separate commission that determined the usage of a residential phone, so I cautioned my readers to check on this before putting a residential phone number on their business stationery, brochures, business cards, or website. In those years, it was common for a telephone company to impose a fine for improper use of a residential number, tell the customer to stop using it for business purposes, or simply start charging them business rates if they discovered a customer violating the rules.

Long after I no longer needed two phone lines, I kept my business line because I wanted to operate legally. But rates that were once $50 inched up to $72/month over the years, and I finally decided this was just too much expense on top of my residential phone bill of $45/month when I was the only one using a phone.

When Things Changed

The turning point came on a day in 2011 when I had some line trouble and spoke with the AT&T repairman about the legality of canceling my business line and just using my home phone number on my website as a contact number. He laughed and said that a separate business line used to be the law, but then with so many people working at home and doing business on the web, AT&T had better things to do than worry about work-at-homers who were using a cell phone or their residential number for both personal and business use. And putting a home phone number on a website that didn’t sell products, he said, would really be insignificant to them.

Actually, what AT&T and other landline telephone companies are most concerned about now is the competition from cable internet companies that are offering terrific bundled able/internet/phone service packages, plus services such as Magic Jack, Skype, and other VoIP (voice over IP) services that use one’s internet connection and computer to make free phone calls through a USB port.

I once had two landline phones, DirecTV® for my cable service, and internet service from WowWay (Wow!). Today, Wow! provides all three of these services at a good bundled price that I can renegotiate annually. Because I’m now a long-standing customer, I usually get some kind of special discount that keeps my monthly fee as low as possible.

Until I spoke with a salesperson there, I had no idea that they could “import” whichever phone number I wanted them to use, and I could dump both of my AT&T landlines and get everything I needed and much more for just $12/month. I switched after comparing that price to AT&T’s “unlimited long distance” service at $30 (after taxes and other fees were added), which only gave me the ability to call within the continental United States. And consider that I had to renew this service package every year and hope I could keep the rate I’d had the year before. When I added the extra $14 for voice mail, I could see why AT&T was losing a lot of business to cable companies and cell phone providers.

As you might expect, prices of everything keep going up, and Wow’s original $12/month price for internet phone service has gradually inched up to around $20/month, and their cable TV  services have also gone up considerably (like all other cable TV suppliers).

But what keeps me happy is that I can record six TV programs at the same time while watching another, and my phone service gives me truly unlimited local and long distance calling not only in the continental United States, but also Alaska, Hawaii, Canada, Puerto Rico, Guam, Saipan, Northern Mariana Islands, and the U.S. Virgin Islands—PLUS free voice mail, various caller ID services, three-way calling, and more. More important, Wow’s customer service is excellent.

There is one drawback, however. When you get your long distance service through a cable internet provider, your telephone calls are not itemized. That means there is no way to know who you called, or when you made a call unless you keep a record of the numbers called. So if you’re going to use a cable service provider for your business long-distance needs, you may want to keep a record of calls made to business contacts (which won’t be easy to remember to do). Another thing to consider is the tax deductibility of whatever phone number you choose to use for your business.

Tax Deductibility of Cable Internet Phone Expenses

If a single phone line (whether land, cable, or cell) is being used for both business and personal calls, historically the IRS has wanted to see a record of every phone call (not possible with internet service providers), or an appropriate breakdown of how much of the phone expense is personal and how much is business. My accountant confirmed that if you’re turning an old landline phone number in your home into your home office telephone and added it to your internet cable service package, you can deduct the full amount of the internet service provider’s bill so long as you also have another telephone number (cell phone) that can be considered your personal phone.

 If you use one cell phone for both personal and business purposes, to get a business deduction you’d need to calculate what percentage of the cost is related to business use of the phone. (See below for links to web articles that offer additional insight into the tax deductibility of different types of telephone and cable services.)

Landlines vs. Internet Cable Phone Services

When I realized that my phone calls would now be going out over the internet, I remembered all the complaints I’d heard about the quality of phone services provided by Magic Jack, Skype, and other VoIP providers and wondered about the quality I’d get with my internet cable provider. I learned that the main difference between the two is that cable companies are the primary provider of the service, whereas all the VoIP providers are using a third-person provider, which naturally affects the quality of the calls and the reliability of the service as a whole.

At first I was concerned that by cutting both landline phones out of my life. I’d heard that a power failure would render me “phoneless,” in which case I would suddenly find myself without a telephone in an emergency. But I was assured that in the event of a power failure, Wow! (and I assume other cable companies as well) has a backup power source that will be good for about four hours. Beyond that, yes, both the internet cable and telephone service would be gone until the power was restored, but in that case my cell phone would probably still work because those signals come from a satellite.

The problem here for many, however, is that they live in the wrong place. In large cities with skyscrapers, it may be hard to get a cell phone signal at times. And if you live out in the country, there may be no satellite signal for a cell phone, no cable company serving that area, and no high-speed internet provider to work with. Folks in rural areas do have a couple of options, however, through HughesNet and Viasat Internet (formerly Wild Blue Satellite Internet). And here’s info about the top ten VoIP providers in 2021.

With two telephone accounts at AT&T, I had a choice of which number I wanted to use as my primary home and office number in the future, and I naturally took the residential number because it was wired to ring in every room of my home, unlike the business line which rang only in my office. When the cable company imported that number, it automatically closed my account at AT&T, so all I had to do was call to cancel the other account. AT&T discontinued service on both accounts on the same day they got notice. On request, they gave me four months of forwarding service for my old business number. All in all, a very smooth transition especially appreciated by one who hates change.

A Note about MagicJack
(from Betsy in the Midwest)

“We have never used cable. Too expensive, and we don’t have time to watch it, but for several years when our local telephone company would not come this far (only two blocks away) for high speed, we subscribed to the Internet through a cable company. Half the time it did not work, so now we have turned to MagicJack and use our phone with a “naked” standalone DSL medium high service for $29/month through our telephone company. Generally it works fine, plus we have all the perks, as if we had additional services on a land line. So, for $20/year, the cost of MagicJack and our DSL, we have the whole thing.”

Ed.Note: This message was received a few years ago, so the pricing this reader got then has surely changed. This is just one example of the service this couple got from this service provider.

Something I didn’t know until I spoke with a salesperson at Wow! was that, technically, I own the telephone wires in my home, and that what my local telephone company was charging me for in the past was service on the line running from my house to the pole out there on the street somewhere that connects to their services. But now that line is connecting me to my cable company, and while calls are going out over the internet, they are running through the existing telephone lines in my home instead of my computer. (If anything goes wrong with the lines in my home, fixing them will be at my expense.)

Do You Know Who Has Your Number and
Where It Is Appearing on the Web?

In making a list of all the places on the Web where I needed to change my telephone number for business reasons, I was astonished to find that it was appearing in connection with my name on more than 3,000 web pages, from white pages, yellow pages, superpages, and allpages to countless other listings on various city and state sites that provide business telephone numbers and reverse number look-up sites. Of course NONE of these listings were authorized by me.

Never having searched for my telephone numbers before, I had no idea that my personal name, business name, website, and business telephone number was appearing on so many directory-listing sites. This is just an example of how robots crawl the web and pick up information about us. Many of the listings for my name included a P.O. address I stopped using in 1989. Others showed my home address, and most of these listings linked to a map with directions to my front door, something I got off Google a long time ago, but which soon seemed to have been a waste of time.

When I published this article a few years ago, I had no idea what would happen when I had one of my landline phone numbers imported to a cable company service provider, but a search as I was updating this article in 2021 made me feel a whole lot better. Whereas I originally found some 3,000 listings connecting my name to my current phone number, this year only two listings out of 1,160 had my name and number together. (Plus some man in Naperville supposedly having my number, which of course proved to be an error.) The rest of the pages were ads from paid search services offering to trace people whose number began with the first six-digits only, which suggests to me that having my phone service with my ISP has afforded me some privacy on the web that I didn’t have before. (I still get a LOT of junk phone calls every day, however, but at least I can identify the caller before I answer.)

More about Wow! Services

Wow! is a great cable service provider, but they serve a limited territory only in only nine states at present. Visit their website to see if their service is available in your area. If so, you will find it costs less than that offered by Comcast.

I was told that the reason their territory is so small is because this is what used to be covered by Americast, which was a part of AT&T until that company was bought by Southwest Bell several years ago. At that time, private investors bought Americast and renamed it Wow!

A spokesperson at Wow! told me it costs anywhere from $100 to $400 million to “wire” a new city, and this has to be done before they can serve even one customer in a new area. Thus the company, though growing, is growing slowly, one city at a time. I’m grateful to be in an area they serve because they are saving me money and giving me excellent service.

Related Article:

What Time is It on Your Cell Phone? A little levity for time-challenged home-business owners.

Maximizing Schedule C Deductions and Working with an Accountant. Waiting until the last minute in April to think about your tax situation is a BIG mistake.

Related Articles on the Web

These articles offer insight into the tax deductibility of different types of telephone and cable services:

 Deducting Telephone Expenses for Your Home Office (Scroll down for the phone deduction.)

 Are Internet, Cable & Phone Write-Offs for a Small Business?

How Much of My Internet Expenses Are Deductible on My 1040?

First published in 2011, updated in 2017 and 2021.

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