`Your Call Is Being Interrupted For An Urgent Commercial'

Tired of paying high long-distance telephone rates? A small startup in New York City could soon have the lowest rate of them all: Free! The catch? Radio-like commercial pitches would periodically interrupt your chat.

A caller would punch in a special access code to connect with Xadax Inc.'s computers, which would then place the call using long-distance lines leased from another carrier. When the phones connect, the computer asks the parties to punch in information such as age and sex to determine which commercials to play from its memory banks during the course of the call. In return for footing a share of the phone bill, Xadax would give advertisers access to a wealth of demographic information--length and time of call, what geographic areas are called most, number of ads played per call, and so on. Matthew Lederman, president of Xadax, says that the setup has worked in limited trials, but he hopes to raise enough interest to try out the system nationwide later this year.

    Before it's here, it's on the Bloomberg Terminal.