It’s Your Money Column – Comparing Long Distance Services

Question: Can you suggest how to simplify the maze of information about long-distance rates?

Answer: Consumer Action, a nonprofit consumer group in California, completed a long-distance rate survey in fall 2001. Here are some of the highlights of the study to help you decide if you can save money by selecting another plan from your current carrier or if switching carriers may save you more.

As competing carriers scramble to enhance profits, they often make up the difference in competitive rates by adding charges, surcharges and fees, so knowing basic rates is only part of your comparison challenge. For example, customers who elect to have their long-distance charges combined with their local phone bill must pay $1.50 per month for the service.

Carriers are required to contribution a portion of their revenues to subsidize local phone service for low-income and rural people and discounted services to schools, libraries and rural health-care providers. Most of the major carriers charge a universal service fee of 9.9 percent and, according to Michael Balmoris of the Federal Communication Commission, carriers send "approximately 6.9 percent of revenues to fund these programs."

Following are some consumer tips suggested by Consumer Action.

• Make sure you select a calling plan. Basic rates for the "Big Three" carriers (AT&T, MCI, and Sprint) are 30 cents a minute from Monday through Friday. When Consumer Action compared a "calling basket" of 42 daytime, 42 weekday evening and 42 weekend minutes, they found that you would pay $29.82 if you had a basic plan. With a calling plan, you might pay from $9.66 up to $17.55 for the same calling time, depending upon the carrier you select and the specific carrier plan.
• Calling directory assistance is an expensive way to get a phone number. This may cost as much as $1.99 per call. Instead, use 411.com and get your telephone numbers over the Internet.
• There are many carriers in addition to the "Big Three." Consumer Action compared 19 carriers and 44 discount plans. You can find their entire survey online at www.consumer-action.org or order a copy of the Consumer Action News issue with the "Long Distance Rates Survey" from Consumer Action, 717 Market Street, Suite 310, San Francisco, CA 94103-2109. Send a self-addressed envelope with 57 cents postage.

If you have a cellular phone or if you purchase a calling card from a discount store, you may find that you don’t need long-distance service at all.