Updating your long distance service
Mie-Yun Lee, Editorial Director, BuyerZone.com
January 16, 2002
Despite the popularity of e-mail, the telephone certainly will not be going away anytime
soon. Nor will phone bills. If it has been more than a year since you have taken a look
at your long distance service bill, now is the time to look and see if you can do better.
You may be tempted to choose a plan simply based on comparing the per-minute rate prominently
touted by the long distance service carriers. Before you do so, though, take the time
to check that other fees in the calling program are in line. Otherwise, you may find
yourself paying more than you actually thought you would be.
First of all, check into any minimum billing requirements. Some plans require that
you bill a certain minimum amount every month in order to get the low per minute rates.
You can get a sense for whether you will safely meet this minimum by multiplying this
new rate by your total long distance minutes from a recent bill. Carriers may also require
a minimum length contract in order to secure those rates.
Also check how calls are billed. A calling plan that features a lower per minute rate
with a 1-minute billing minimum and 1-minute billing increments may look better on paper,
but may in fact be no better than, or even worse than, a higher-rate plan that features
6 second minimums and 1-second billing. Typically, long distance service companies will
bill calls using a 30-second minimum and 6-second rounding.
If more than 10 percent of your calling minutes are to locations within your state
or to foreign countries, find out the intrastate and international calling rate. Similarly,
if your company makes many calls during off peak hours, which is typically before 7 am
or after 7 pm, see if there are special rates for those off hours. Carriers have for
the most part moved to flat pricing, though, so it could be a moot point.
Another area where long distance carriers can differ is with the Universal Service
Fund, or USF fee. All long distance service companies are required to pay this fee which
helps subsidize telecommunications services for certain groups. But it's up to the carrier
to determine how they will pay for it. This typically translates into a fee that gets
passed on to you in your monthly phone bill and is determined by taking a certain percentage
of your long distance bill. I have seen this fee range from six to twelve percent. Significant
differences in the percentage charged among carriers can affect your final bill.
Plan on adding calling cards or toll-free service? Then check into those rates as well.
In particular, with calling cards, check what is charged per call in addition to the
per minute rate.
By keeping an eye out for hidden and not-so-hidden charges when evaluating long distance
services, you can ensure yourself the best connection.