MEDIA : Commsel-AP Venture Will Offer Financial News Over the Phone

When Jerry Klein was trying to get into the electronic mail business back in the early 1980s, he first sought a deal with Western Union, the now-foundering telegraph and communications company.

Luckily for him, the Western Union deal didn’t work out, and Klein went on to become a reseller of MCI Communications’ electronic mail services.

Today, the Newport Beach entrepreneur owns Commsel, one of the country’s largest service bureaus for the booming 800-number and 900-number telephone services. Commsel recently signed a joint venture agreement with the Associated Press, the newspaper cooperative, to provide financial news and information over the telephone.

With the new service, AP member newspapers, including the Los Angeles Times, will advertise 900 numbers in their newspapers. AP will provide stock quotes and other information, and Klein’s company will furnish the telecommunications facilities that will make it all happen. The newspapers, AP and Klein will share the revenue.

The 900 phone services, in which callers pay per-minute fees that are much higher than regular rates, are considered one of the fastest-growing segments of the phone business. Toll-free 800 service, in which the cost of the call is picked up by the company offering the service, has become a multibillion-dollar business over the past decade.

Together, these services have brought a windfall to Klein, although not necessarily to Orange County. Although Commsel is headquartered here, only Klein and two assistants actually work in Newport Beach. The main operation, which consists of some $12 million worth of computers, telephone switches and voice storage equipment, is in a 20,000-square-foot facility in McLean, Va.

The operations there are highly automated. Calls that come in are answered by a recorded voice that either provides the information sought or instructs the caller to push any of various phone buttons to receive the other information. Klein said only 27 people, most of them computer programmers, work at the site.

The Commsel bureau can handle up to 400,000 calls per hour and 3,600 calls simultaneously. The AP service will not generate nearly that volume of calls, but Klein is nevertheless happy with the arrangement.

“It’s one of the more stable ongoing services,” he said. “Some things that are more promotional in nature, like a service for the National Enquirer, will produce more calls in one day than AP does in a month. But it’s good to have a mix of promotional and stable services.”

Klein, Commsel’s sole owner, would not disclose exact revenue figures, saying only that they are “in excess of $20 million.”

Klein is grateful that the nature of the business has allowed him to stay in Newport Beach and enjoy the “California lifestyle.” He communicates with Virginia by electronic mail, which he continues to sell for MCI. “I don’t think we could do this without it,” he said.