A flat-rate cell-phone deal sounded good until the phones stopped working and company executives stopped talking

You've just perfected the dream cellular phone: Talk as much as you want to your friends in Fargo, New York, Los Angeles and all points between for $100 a month. Do you pitch the idea to AT&T and MCI and get rich in the ensuing bidding war? Start your own company and try for a new IPO record on the stock exchange? Or would you use the Internet to market your phone, Amway-style, to thousands of people who dream of a flat-rate cellular phone the way Ponce de Leon yearned for the fountain of youth?

If you're International Communications and Computers, you go the Amway route. For prices ranging from $275-$45,000, IC&C has been advertising distributorships for a so-called flat-rate cellular phone. Sales agents are supposed to get commissions as high as $35 for each phone sold, plus a percentage of sales made by agents underneath them. The company has also been offering phones for a $99.95 activation fee and $99.95 for each month of service.

There's just one problem: The phones don't work. And folks across the country who've paid for distributorships and service are starting to get nervous about a company that, from all appearances, has used a mailbox in a Maryland Heights Mail Boxes Etc. as its national headquarters.

Box 194: The world headquarters of IC&C
Jennifer Silverberg
Box 194: The world headquarters of IC&C

A flat-rate cellular phone has taken on trappings of urban legend. Several companies advertise such a phone over the Internet, but no one seems able to deliver. Officials at the Cellular Telephone Industry Association in Washington, D.C., have never heard of anyone offering unlimited cellular service for a flat rate.

Charles Hill of San Diego knows all about the hunt for the elusive flat-rate phone. He's heard of IC&C, but he hasn't given them any money. He's still trying to get back the $200 he gave a different flat-rate cellular company last summer for a phone that didn't work. "I've talked to people who said they were talking to me on one," he says. "I've physically held one, but it never worked."

Since April, Hill has collected names and addresses -- but no money -- from nearly 3,000 potential customers eager to buy flat-rate cellular phones from the first company that comes through. He said he's been in touch with four different flat-rate companies, all of which offer distributorships for a price. None has come up with a phone that works. "I've talked to someone from each one of them," Hill says. "They're all good song-and-dance guys: "Yeah, it's coming. Boy, it's right there. We're all ready to go.' It's a joke."

IC&C in October began shipping phones to people across the country who had paid for their first month of service plus a $99.95 activation fee. One thing was a bit odd: All the phones had 314 area codes. But they worked fine until Nov. 18, when they were all shut off.

Marty Kincaid of New Jersey, who helped recruit agents for the company, says a customer-service representative at AT&T's fraud division told him the phones were shut off for reasons of "fraudulent subscription." AT&T confirms that an investigation is under way but will release no details. "It is under investigation, and that's as far as I can go," says AT&T spokesman David Hale. Kincaid, who has been a critic of IC&C since it rejected him as an agent (because, he says, he was asking too many questions), suspects IC&C bought a block of minutes from AT&T but didn't have a proper contract to resell the airtime.

Explanations are hard to come by, because it's tough to talk to a live person from IC&C, a company that would have you believe it's on the cutting edge of telecommunications technology. Contacted by e-mail, company officials wouldn't grant repeated requests for phone interviews. Susan Grogert, who replied to interview requests sent to IC&C by e-mail, insists: "There is no ongoing issue with AT&T or any of the other companies providing access. Those issues have been settled." However, she provides no details. She says the company has contracts with many wireless providers but will not name any.

No one can point to a case in which the company has refused a refund. In response to e-mails sent to the company, Grogert, whose position in IC&C isn't clear, says by e-mail that most folks aren't asking for their money back, preferring to wait until IC&C works the bugs out. Ann Stagner, a trucker from Jacksonville, Ark., who bought an IC&C phone and a $275 distributorship, says she thinks people will be waiting a long time.

Stagner says company officials have told her that the phones will work again within three weeks but that phone purchasers first must send their phones back to the company. "I'd be willing to bet you we never see those phones again," Stagner says. "I think it's a scam."

Stagner isn't alone. "I guarantee that everybody out there right now thinks this is the biggest scam since you're not going to believe when," says Chris Ryan, a Pennsylvania man who paid $5,000 for the privilege of marketing IC&C's phones and also convinced several friends to invest. "You would not believe the rumors that are out there right now. This is the biggest up-and-down roller coaster."

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