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Archive for Monday, August 6, 2001

Consumers should use statements to shop for long-distance service

August 6, 2001

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People hate being nickled and dimed to death, even when they can afford to pay. That's probably what ticks them off when they read their long-distance telephone bills.

Pretty soon, you'll be able to put your "phone rage" to good use.

Starting Aug. 1, you may have found better and easier ways of comparing rates and fees.

On the surface, today's discount plans look super low cost. Intense competition in per-minute calling rates has knocked the prices down.

Per-minute rates should drop more as long-distance and local-phone companies invade one another's markets.

But the phone companies keep reaching for revenues in hidden corners for surcharges, fees, directory assistance and operator assistance.

Many of these costs have been hard to discover. They've been scattered around the company's Web site, often several layers down.

When you ask for rates by phone, you may not even learn about all the "incidental" fees. If you don't ask about them, the phone salespeople don't volunteer.

By Aug. 1, however, you should have received a written agreement from your long-distance carrier, disclosing all its rates and terms for state-to-state calls. You'll also find it on their Web sites.

That will be your moment to shop anew for a long-distance service. It might even be cheaper to drop your long-distance company entirely and use one of the 10-10 "dial around" numbers.

Here's a shopping guide:

Basic rates. These are charged to people who haven't signed up for a discount calling plan. You're paying the highest rates on the card.

AT&T just announced an increase in its basic rates, effective July 1. Customers are paying 1.6 percent to 11 percent more, depending on the time of day they call.

The new price range runs from 16 cents a minute (weekends) to 30 cents (weekdays), with no minimum monthly phone-usage fee. If you switched to a basic calling plan, you'd pay 10 cents a minute on Saturday or Sunday. MCI's charges more on Saturday but matches the 10-cent Sunday rate.

Basic-rate customers generally don't make a lot of calls. Even so, you'll save money by making all long-distance calls on Sunday either through MCI or by getting on AT&T's Sunday 10-cent plan, says Sam Simon, chair of the Telecommunications Research & Action Center (TRAC) in Washington.

Discount plans. All the major long-distance companies offer discounted per-minute rates, going as low as 5 cents. But you're also charged a monthly fee.

All the rate disclosures should be on the Web sites Aug. 1. The lowest rates often go to people who sign up via Internet and agree to be billed that way.

Discount plans change, so don't settle into the plan you choose. Keep calling your long-distance company to see if there's something cheaper.

For free rate comparisons among five long-distance companies, based on specific phone calls, go to www.trac.org. To find the best carrier (among seven), based on your total calling pattern, send $5 for TRAC's long-distance comparison chart, P.O. Box 27279, Washington, D.C., 20005.

Include a self-addressed business-size envelope and 55 cents in stamps.

Resellers. These small companies lease phone lines from the big carriers at wholesale rates and resell them to you cheap. Rates per minute run as low as 4.9 percent. There are often no monthly minimums or monthly fees. Look for these companies at www.saveonphone.com.

Extras. You'll find many other fees on your long-distance bill, going by varying names say, fees for connecting to the local phone company, special state charges, subscriber-line charges, directory assistance and a federal universal-service (or "connectivity") fee.

Some phone companies charge higher fees than others. Shoppers should factor them into the total price.

Take the universal-service fee. It's on everyone's phone bill. The fee underwrites the cost of phone services to rural areas and low-income people, as well as Internet connections for schools and libraries.

By government fiat, you pay 6.8 percent for universal service. Some phone companies charge no more than that. But AT&T and Sprint charge 9.9 percent. MCI charges 12 percent.

And take the billing fee. You may be paying $1.50 to be billed through your local phone company. Tell your long-distance company to bill you directly, instead.

Dial-arounds. With these services, you don't have to sign up with a particular long-distance phone company. You place each call independently, using a 10-10 number.

Some of the 10-10s have no minimums, no monthly fees and low per-minute rates. Some give excellent discounts for 10- or 20-minute calls. A few even have no universal-service charges. For a free rate comparison, go to www.10-10phonerates.com or www.trac.org

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