2002 Long Distance Telephone Rates Survey

 

Table of Contents

Basic rates jump, but so do potential savings from calling plans and new providers

Major carriers’ interstate long distance basic rates have risen steeply, according to the latest Long Distance Rates Survey of 21 carriers and 47 discount calling plans. Basic rates, the highest rates paid by customers not on a calling plan, jumped 17.5% in one year at the Big Three carriers (AT&T, MCI and Sprint).

Besides the steep jump in basic rates to as high as 35¢ per minute for weekday, daytime calls (Big Three), Consumer Action (CA) found large increases for:

  • Calling card calls: The cost of placing a 10-minute weekday, daytime calling card call from Chicago to Los Angeles, using each company’s own card and access number, jumped 30% to $11.40 using MCI, 26.8% to $10.15 using Sprint and 42.8% to $5 for Verizon. AT&T’s charge for carrying the call ($10.15) is unchanged since last year, as is SBC’s ($4.25).
    The total for these calls includes the per-call surcharge: this year, MCI’s surcharge rose from $1.25 per call to $1.50 and Sprint’s from 99¢ to $1.25. Surcharges levied by AT&T ($1.25) and SBC (75¢) remained the same. Verizon reports that it does not have a per-call surcharge on calling card calls.
  • Collect calls: The cost of a 10-minute, daytime collect call from Chicago to Los Angeles dialed using Big Three toll-free collect call access numbers shot up 52% across the board since last year. All three companies charged the same rate and implement-ed the same increase—from $8.49 to $12.89.
    The cost for this collect call when you ask the operator to help is even higher: $15.40 for AT&T; $16.44 for MCI and $14.40 for Sprint. The cost of an operator-assisted collect call has remained steady for AT&T and Sprint—MCI increased its cost 18% since a year ago.
  • Directory assistance: In one year, the cost of asking for directory assistance by dialing the area code plus 555-1212 jumped 25% to $2.49 for MCI and Sprint customers. SBC customers, now paying $1.40 per call, have seen a whopping 47% increase. AT&T ($1.99) and Verizon ($1.25) remain the same.

CA also uncovered an international calling trap that could double, even triple the cost of overseas calls. If the number you are calling belongs to a cell phone, the Big Three and many other companies add a per-minute “international mobile termination charge” to their rates.

In a worst case scenario, AT&T and Sprint customers using a discount international calling plan with rates of 9¢ per minute to the United Kingdom would end up paying 31¢ per minute if calling a cell phone because of the 22¢ per-minute surcharge added by both companies.

Linda Sherry, who conducted the survey, noted that most people are used to the notion that when calling a cell phone, the cell phone’s owner pays for the call. “This isn’t true everywhere overseas,” she noted, “which makes this a costly trap for the unwary.”

This year Consumer Action looked at 47 state-to-state long distance calling plans. (See a list of all interstate long distance calling plans) Of the calling plans surveyed, 31 (or 66%) had monthly fees, 11 (or 23%) had no fee and 5 (or 11%) had monthly minimum spending requirements. Monthly fees ranged from 75¢ (Big Zoo) to $59.99 (MCI’s Neighborhood Complete). Minimum spending requirements ranged from $5 to $10.

Calling plan rates ranged from 2.5¢ to 11.5¢ per minute.
The plans fall into several categories:

  • One-rate plans. These plans offer one per-minute rate around the clock.
  • Two-rate plans. These plans offer two rates—typically, a higher per-minute rate applies in the daytime and a lower rate in the evening, at night and on weekends.
  • Online plans. These plans require that customers set up service through the company’s web site, and often include an online billing requirement and automatic credit card payment.
  • “Buckets of minutes” plans. These plans give you a certain number of long distance minutes per month for one charge. When you use more than your allowance of minutes, a slightly higher per-minute rate applies for additional minutes. If you don’t use all the minutes in one month, you lose them—unused minutes don’t roll over to the next month.
  • Prepaid plans. These plans require that customers pay in advance for long distance minutes.

  • “Unlimited” plans. This new twist allows you unlimited calls in return for a set monthly fee.
    “Unlimited plans are a new concept to hit the market since we last surveyed long distance rates,” noted Sherry. “Two plans like this showed up. AT&T has a plan that allows you unlimited minutes when talking to other AT&T customers, while you pay 7¢ per minute for calls to other people. MCI’s Neighborhood is a package of phone services that includes unlimited state-to-state long distance as well as local phone service and other optional services such as call waiting. Both have hefty monthly fees.”

Save up to 72%

CA analyzed how much Big Three customers can save by having a calling plan and found that savings of up to 72% are possible if you avoid paying the three companies’ highest basic rates. Using the same calling basket of 126 minutes of interstate calls it has tracked for 17 years, CA found that AT&T customers could save between $21.93-$25.20 per month, MCI customers between $13.80-$18.91 and Sprint customers $12.15-$24.88 just by enrolling in one of their calling plans.

To assist consumers in shopping for long distance service, CA compiles a chart of the lowest per-minute plan rates. Appearing on the interstate long distance calling plans, this year’s chart features six online plans with interstate rates of 4.5¢ to 9¢ per minute. Internet sign-up and automatic credit card billing usually are required for online calling plans.To assist consumers in shopping for long distance service, CA compiles a chart of the lowest per-minute plan rates. Appearing on pages 4 and 5, this year’s chart features six online plans with interstate rates of 4.5¢ to 9¢ per minute. Internet sign-up and automatic credit card billing usually are required for online calling plans.

“If you’re willing to use the Internet for sign-up, billing and even customer service via e-mail, you can find substantial savings because none of the plans we list have monthly fees,” said Sherry.

Prepaid providers

This year two online prepaid long distance providers have been added to the survey.

BigZoo and OneSuite operate strictly via their web sites, selling prepaid long distance time charged to a credit or debit card. (See interstate calling plans for more details about their services.)

Both services require customers to use either a toll-free or local access number and a personal identification number (PIN). However, they offer automatic PIN recognition, which can save the trouble of dialing the PIN when calling from your home phone. (To make using the access numbers easier, you can use your phone’s speed dialer.)

Sherry said these services have advantages, including lower rates and not having to worry about an unexpectedly large bill. “You can really budget your long distance charges by using a prepaid service,” she said.

The services can be used from any phone, although a payphone surcharge applies.

Long distance comparison sites try to sell you—but that may not be a bad thing

By Michael Iacuessa

With slumping sales causing major long distance carriers to raise rates and fees, consumers have more incentive than ever to search for an inexpensive provider. When consumers go shopping for long distance deals on the web, they often end up at one of the many web sites run by telecom brokers who make money from commissions.

Many of the lowest long distance rates around are offered by companies that buy time in bulk from the major carriers and resell it to the public. By some estimates, there are hundreds of companies selling long distance services and this can make it difficult for consumers to find the carrier that best suits their calling patterns.

To fill that need, many web sites have emerged to offer comparisons between providers, including lists of companies with the cheapest rates and consumer information on long distance service. The sites also direct shoppers to certain providers in exchange for a commission. That may raise questions of reliability but the owners say they have consumers’ best interests in mind.

William Van Hefner, president of The Digest, an on-line newsletter covering the telecommunications industry, said comparison web sites make money on “click-throughs.” That is when a shopper is directed to and signs up with a long distance company via the comparison web site.

The Digest’s sister site, Telcom-pare.com, started in 1999, is an agent for 20 to 30 long distance companies. Van Hefner insists it makes little difference to his company which one a consumer selects because all pay his company the same click-through rate.

“I don’t have any reason to choose one over the other,” he said. “So I would prefer ones that generate the least number of complaints and have a good reputation and customer service.”

While there are countless web sites offering long distance comparisons, Van Hefner said only a handful tend to get heavy traffic. He believes the successful ones are popular because they take a consumer-friendly approach.

At Telcompare.com, providers are ranked in the order customers find most popular. The site is picky about the providers it lists.

No slammers, crammers

“We won’t add someone if they have a history of repeated slamming or cramming,” said Van Hefner. Slamming is when a company takes over a person’s long distance service without permission. Cramming is when a customer is billed for services that were never authorized.

SaveOnPhone.com, by contrast, tries to be the most comprehensive long distance comparison site, listing every provider it knows to exist—even if the company does not offer commissions.

Like many others, SaveOnPhone has a rate calculator that allows you to type in information about your own calling patterns. It then returns a list of 10 long distance plans that might work for you.

Company vice-president Bill Hardekopf says the system is an objective one and does not favor firms that offer commissions to SaveOnPhone.

Calculations take into account in-state and state-to-state rates, billing increments, minimum charges and Universal Service Fund (USF) charges. (The USF is a fee companies must pay to the federal government to help provide phone and Internet service to schools and remote rural areas).

“The comparison sites tend to sell the plans of many of the same cut-rate long distance providers,” said Linda Sherry of Consumer Action. “Some sites seem to exist only to sell long distance, while others have a track record of providing objective information on how to select long distance service.”

Sherry advises that consumers visit several of the sites before conducting business with one. “It’s an educational process in itself to visit these sites.”

As a consumer advocate, Sherry has one sore point. “Some of the rate calculators ask for your entire phone number. They only need the area code and prefix to give you applicable rates. If you’re asked to type in your whole number, I’d look to see if the site has a strong privacy policy before continuing or you might be inviting telemarketers to call.”

While per-minute rate comparisons are usually obvious, other factors, such as billing increments can have quite an effect. Companies that bill in six-second increments instead of the standard one minute can shave your long distance bill considerably.

The USF fee also can vary from company to company. Providers are taxed 6.8% on what they collect but many pass a higher percentage on to consumers.

“Most of them charge a higher amount,” said Hardekopf, noting that major carriers charge consumers up to 11%. “That’s some of the fine print stuff some of the long distance providers are not up front about.”

ABTolls.com, another comparison site, puts each provider through a blind shopping test before choosing whether to list it. Currently, it lists 170 long distance companies.

“We actually call as an anonymous consumer to see how they represent themselves, to see whether or not they are responsive to the customer, including hold times,” said co-founder Dr. Marc-David Seidel.

Not all listed companies pay ABTolls a commission if a consumer signs up through the site, but the company does disclose which companies are sponsors.

ABTolls, started in 1997, is run by three partners—Seidel, Justin Pollock and Scott McCoy—all of whom have other full-time jobs. Seidel says new long distance companies usually find ABTolls on their own and ask to be listed. Other companies are recommended by the site’s users.

Seidel recommends that consumers who are seeking a new long distance provider should “look at the plan and make sure it makes sense for their calling patterns. They should understand what the hidden costs are. There’s a lot of companies out there that are just not reputable.”

ABTolls has a custom pricing tool (TollChaser.com) which offers net rates alongside the advertised rates. It asks visitors for an unusually in-depth calling profile, including the number of state-to-state and out-of-state calls, total monthly minutes and the time of day that calls are usually made. Seidel said recommending the best provider for each household is impossible without knowing these variables.

Pays to look closely

Even with the help of comparison sites, customers need to look pretty closely. The rates and terms can be different depending on where you live.

Some of the companies that are highly rated for value include Isterra, and Pioneer Telephone—sold only through resellers—and ZoneLD. But Isterra’s in-state rates can vary by up to 9¢ per minute. Ditto for Zone LD, which offers Wisconsin residents an in-state rate of 4.5¢ per minute but charges West Virginia residents 16.1¢ per minute on in-state calls.

Pioneer has low 4.9¢ per minute overseas rates to France and England, but requires automatic credit card billing.

“What’s good for one individual may not be good for someone else,” said Seidel, perhaps explaining why his sites have become so popular with consumers who find comparison shopping a time-consuming and tedious process.

Set your ‘sites’ for comparing discount long distance rates

AB Tolls(http://abtolls.com) For all plans featured, ABTolls displays actual per-minute rates and monthly costs after fees, surcharges, minimums and taxes have been figured in. From ABTolls, you can click through to its sister site, Tollchaser.com, which offers “customizable” rate comparisons based on details you provide about your long distance calling patterns.

Discount Long Distance Rates (www.discountlongdistancerates.com)
This site run by Rachael Hoffman allows you to browse its providers or use its online calculator to figure out a “good fit” before you click through to the company of your choice to seal the deal.

LD Wiz (http://ldwiz.com) Telecom consultant Bruce Galle provides detailed information for the plans he offers on his site, including in-state rates, intrastate rates and fees such as the Universal Service Fee (USF).

Lower My Bills (www.lowermybills.com) Recommends alternative providers to help consumers save on various bills, including long distance, and allows you to sign up online for the services of your choice.

Phone Bill Busters (www.phone-bill-busters.com) Represents discount long distance and cellular carriers and provides detailed information, including in-state rates, intrastate rates and fees such as the Universal Service Fee (USF).

Save On Phone (www.saveonphone.com) This site uses its own rating system that gives each carrier 100 points to start and deducts points for unfriendly consumer practices such as call rounding, minimum charges, monthly fees and higher-than-average fees and surcharges.

TelCompare (www.telcompare.com) The long distance plans sold on this site are chosen by William Van Hefner, founder of The Discount Long Distance Digest (www.thedigest.com), and he offers an “unconditional money-back guarantee” to consumers who purchase listed plans.

Interstate Calling Plans


ADELPHIA (888) 374-8444 • www.adelphia.com


Calling plan : Adelphia Long Distance

  • Type : One-rate plan
  • Monthly fee : None
  • Rate periods included : All
  • Plan description : Calls are 8¢ per minute. Calls are billed in six-second increments. Stand-alone billing only.

A T & T (800) 222-0300 • www.att.com


Calling plan : Unlimited Plan

  • Type : One-rate plan
  • Monthly fee : $19.95
  • Rate periods included : All
  • Plan description : ncludes unlimited calls to other AT&T long distance customers; calls to non-AT&T customers are 7¢ per minute.

Calling plan : One Rate 7¢ Plus

  • Type : One-rate plan
  • Monthly fee : $3.95
  • Rate periods included : All
  • Plan description : Calls are 7¢ per minute.

Calling plan : One Rate 10¢ Plan

  • Type : One-rate plan
  • Monthly fee : None. $5 minimum monthly usage requirement.
  • Rate periods included : All
  • Plan description : Calls are 10¢ per minute.

Calling plan : 5¢ eWeekends

  • Type : Online two-rate plan
  • Monthly fee : None. $5 minimum monthly usage requirement.
  • Rate periods included : Peak (weekdays) and Off-Peak (Saturday and Sunday).
  • Plan description : Peak calls are 9¢ per minute and Off-Peak, 5¢. Online billing is required (no paper bills are available with this plan).

Calling plan : One Rate Weekends

  • Type : Two-rate plan
  • Monthly fee : $4.95
  • Rate periods included : Peak (weekdays) and Off-Peak (Saturday and Sunday).
  • Plan description : Peak calls are 7¢ and Off-Peak, 5¢.

Calling plan : 5¢ Nights

  • Type : Two-rate plan
  • Monthly fee : None. $5 minimum monthly usage requirement.
  • Rate periods included : Peak (7 a.m.-7 p.m.) and Off-Peak (7 p.m.-7 a.m.)
  • Plan description : Peak calls are 10¢ and Off-Peak, 5¢.

BIG ZOO Toll Free Number : None • www.bigzoo.com


Calling plan : BigZooLong Distance Service

  • Type : Online prepaid one-rate plan
  • Monthly fee : 75¢
  • Rate periods included : All
  • Plan description : Calls in the continental U.S. are 2.9¢ (local access); 3.9¢ (toll free access). (Calls to Hawaii and Alaska are 16.3¢ per minute. Calls cannot be placed from Hawaii or Alaska.) You sign up on the company’s web site (see above) and pay using a credit or debit card. Payphone calls are subject to a 55¢ charge. You can view all of your calling activity by signing in to your account on BigZoo’s web site. For first-time users, the minimum amount is $5; on subsequent recharges, the minimum is $10. BigZoo PINs expire six months from the date of purchase or last recharge, whichever is more recent. Note: some of the international rates show below have been rounded to the nearest 1/10th of a cent.
    Australia: 5.9¢ for most continental calls (to a cell phone, 32.4¢)
    Brazil: 17.4¢ (to a cell phone, 35.4¢)
    Canada: 4.4¢
    England: 4.5¢
    Mexico (Mexico City): 11.9¢
    Taiwan: 6.5¢; 5.4¢ (Taipei) (to a cell phone, 15.4¢)

EXCEL COMMUNICATIONS (800) 875-9235 • www.excel.com


Calling plan : Nickel Nation

  • Type : One-rate plan
  • Monthly fee : $5
  • Rate periods included : All
  • Plan description : All state-to-state and in-state calls are 5¢ a minute with a 5-minute minimum for completed calls. Calls to Canada also are 5¢ per minute.

Calling plan : Dime Deal 2000

  • Type : One-rate plan
  • Monthly fee : $3.75
  • Rate periods included : All
  • Plan description : All calls are 10¢ a minute.

Calling plan : Simply More

  • Type : One-rate plan
  • Monthly fee : $4.50
  • Rate periods included : All
  • Plan description : All calls are 7¢ per minute.

Calling plan : Three Penny Plus

  • Type : Two-rate plan
  • Monthly fee : $5.95
  • Rate periods included : Peak (7 a.m.-7 p.m.) and Off-Peak (all other times).
  • Plan description : Off-peak calls are 3¢ per minute and Peak calls, 10¢ per minute.

EVERDIAL (800) 263-6690 • www.everdial.com


Calling plan : Everdial 1

  • Type : Online one-rate plan
  • Monthly fee : None
  • Rate periods included : All
  • Plan description : Calls in the continental U.S. are 4.9¢ per minute. Includes a calling card with a domestic rate of 9.9¢ per minute (50¢ connection fee; 35¢ payphone fee). Automatically includes discounted international rates:
    Australia: 8.9¢ (to cell phone, 37¢)
    Brazil: 21.9¢ (to cell phone, 34.9¢)
    Canada: 7.9¢
    England: 6.8¢ (to cell phone, 43¢)
    Mexico (Mexico City): 24.9¢ (to cell phone, 26.9¢)
    Taiwan: 14.9¢ (Taipei 12.9¢) (to cell phone, 25¢)

EXPRESS TEL (800) 571-7777 • www.expresstel.com
TEL AMERICA (800) 748-4000 • www.telamerica.com


Calling plan : Residential Plus

  • Type : One-rate plan
  • Monthly fee : None
  • Rate periods included : All
  • Plan description : All calls within the contiguous 48 states are 11.5¢ a minute. (Calls to Hawaii, Alaska, Puerto Rico and U.S. Virgin Islands are 19¢; Canada: 25¢.) (International calls are automatically billed at discounted rates.)

Calling plan : Ninefold

  • Type : One-rate plan
  • Monthly fee : None
  • Rate periods included : All
  • Plan description : All calls within the contiguous 48 states are 9¢ a minute. (Calls to Hawaii, Alaska, Puerto Rico, the U.S. Virgin Islands and Canada are 15¢ per minute.) Six-second billing increments.

GE RESIDENTIAL LONG DISTANCE (866) 789-8668 • www.gephonehome.com


Calling plan : GE Residential Long Distance

  • Type : One-rate plan
  • Monthly fee : None
  • Rate periods included : All
  • Plan description : Calls are 5.9¢ per minute. All customers must agree to receive a stand-alone statement (you cannot be billed on your local phone company's bill) and to use automatic credit card billing.

GLOBAL CROSSING (800) 482-4848 • net.globalcrossing.com/exac


Calling plan : ExactRate

  • Type : One-rate plan
  • Monthly fee : $1.99 (automatic billing, with a credit card); $3.99 (paper bill).
  • Rate periods included : All
  • Plan description : All calls are 7¢ per minute. The plan comes with automatic low international rates. For an additional monthly fee of $2.99, the rates are further discounted. The following international rates compare default rates with the special calling plan rates:
    Australia: 25¢/17¢
    Brazil: 43¢/40¢
    England: 10¢/9¢
    Taiwan: 40¢/20¢

GTC TELECOM (800) 486-4030 • www.gtctelecom.com


Calling plan : Residential 5¢ Plan

  • Type : One-rate plan
  • Monthly fee : None (Credit card payment with online statement); 95¢ (Credit card payment with paper statement); $1.95 (Payment by check with paper statement.)
  • Rate periods included : All
  • Plan description : All calls are 5¢ per minute, with the exception of calls to Alaska and calls to and from Hawaii, 15¢ per minute. GTC Telecom does not offer service to Alaska residents. USF charge is 8.3%.

IDT (888) 802-0082 • www.idt.net


Calling plan : IDT Long Distance

  • Type : One-rate plan
  • Monthly fee : $3.95
  • Rate periods included : All
  • Plan description : Calls are 5¢ per minute. Domestic calls billed in six-second increments. Rate applies only to calls made from the contiguous 48 states (calls to Alaska are 14.9¢, Hawaii 16.2¢ and Puerto Rico, 6.9¢).

MATRIX TELECOM (800) 282-0242 • www.matrixtele.com


Calling plan : Matrix Value

  • Type : One-rate plan
  • Monthly fee : $3.64
  • Rate periods included : All
  • Plan description : Calls are 7.9¢ per minute.

Calling plan : Matrix Silver

  • Type : One-rate plan
  • Monthly fee : $2.36
  • Rate periods included : All
  • Plan description : This is the Matrix basic rate plan. Calls are 9.9¢ per minute. Discounted international rates are included. Examples: Canada, 19¢ per minute; England, 19¢; Sydney, Australia, 29¢.

MCI (800) 444-3333 • www.mci.com


Calling plan : Anytime 200

  • Type : Bucket of minutes plan
  • Monthly fee : $9.95
  • Rate periods included : All
  • Plan description : The plan includes 200 minutes of state-to-state calls each month. (If all 200 minutes are used, calls are 5¢ per minute.) Additional state-to-state calls are 7¢ per minute. For a higher monthly fee ($12.95), the Anytime 200 In-state plan includes 200 minutes of combined state-to-state and in-state long distance calls and local toll calls. (If all 200 minutes are used, calls are 6.5¢ per minute.)

Calling plan : Neighborhood Complete

  • Type : Unlimited calling plan with local service. (Includes all state-to-state, in-state, regional local toll and local calls.)
  • Monthly fee : $49.99-$59.99 (varies by state).
  • Rate periods included : All
  • Plan description : Monthly fee covers all calls and includes the cost of call waiting, caller ID, speed dial and three-way calling. At press time, the plan was available in 37 states. (More information can be found online at www.theneighborhood.com or by calling 877-777-6271.)

Calling plan : One Net Savings

  • Type : Two-rate online plan
  • Monthly fee : None. $6 monthly minimum usage requirement.
  • Rate periods included : Peak (Weekdays) and Off-Peak (Saturdays and Sundays).
  • Plan description : Calls are 5¢ a minute on weekends and 9¢ a minute on weekdays. Automatic credit card billing and online statements are required.

Calling plan : Anytime Advantage

  • Type : One-rate plan
  • Monthly fee : $5.95
  • Rate periods included : All
  • Plan description : State-to-state calls are 7¢ per minute. For a higher monthly fee, the 7¢ per-minute rate can be extended to cover all state-to-state and in-state long distance and local toll calls.

NET2PHONE (800) 265-7267 • www.net2phone.com


Calling plan : PC2Phone

  • Type : Prepaid, one-rate plan
  • Monthly fee : None
  • Rate periods included : All
  • Plan description : All calls in the U.S. are 2¢ per minute, billed in one-minute increments. You can call any regular phone in the world from your personal computer (PC). Net2Phone CommCenter software can be downloaded from the Internet (see above web site) and is available for most PCs using Windows 95 or more recent with a sound card, speakers and a microphone. The company recommends using a hands-free PC-compatible phone headset for added performance and privacy while making calls. For international rates, check the web site.

ONESUITE (866) 4-1SUITE • www.onesuite.com


Calling plan : OneSuite

  • Type : Prepaid, one-rate plan with toll-free access
  • Monthly fee : None
  • Rate periods included : All
  • Plan description : Calls are 2.9¢ per minute. Customers sign up for an account on OneSuite’s web site, choose any amount of long-distance credit, pay for it with a credit or debit card and use OneSuite’s toll-free access number and your personal identification number (PIN) to place calls. The service can be used from any phone. Pay phone calls are subject to a 55¢ per call charge. The company offers a service called ZipDial, which recognizes your home phone (or any other number you register) when you dial in, so you do not have to enter the PIN number to place calls. Calls placed using the company’s local access numbers are 2.5¢ per minute. International rates are automatic. Sample international rates:
    Australia: 6.5¢ (toll-free access)/5¢ (local access number); 35¢/26¢ (to a cell phone)
    Brazil: 25¢ (toll-free access)/17¢ (local access number); 39¢/16¢ (to a cell phone)
    Canada: 4.5¢ (toll-free access)/3.9¢ (local access number)
    England: 4¢ (toll-free access)/3.9¢ (local access number); 40¢/27¢ (to a cell phone)
    Mexico (Mexico City): 13¢
    Taiwan: 6.6¢ (toll-free access)/5¢ (local access number); 15¢/14¢ (to a cell phone)

OPEX (888) 577-7266 • www.opexld.com


Calling plan : Value Plus

  • Type : One-rate plan
  • Monthly fee : $2. Fee is waived if customer meets a $20 monthly minimum usage requirement.
  • Rate periods included : All
  • Plan description : State-to-state calls in the 48 contiguous states are 4.5¢ per minute. (Calls to HI, AK, PR, and U.S. VI are 23¢ per minute.) Automatic billing to a credit or debit card is required. Calls are billed in one-minute increments with a one-minute minimum charge. International rates are automatic. Sample international rates:
    Australia: 12¢ (to a cell phone, 37¢)
    Brazil: 27¢ (to a cell phone, 39¢)
    Canada: 10¢
    England: 9¢ (to a cell phone, 61¢)
    Mexico (Mexico City): 22¢
    Taiwan: 15¢ (to a cell phone, 22¢)

QWEST (800) 860-2255 • www.qwest.com
Qwest cannot provide interstate long distance services to residents of:
AZ, CO, ID, IA, MN, MT, ND, NE, NM, OR, SD, UT, WA and WY.)


Calling plan : 5¢ Long Distance

  • Type : One-rate plan
  • Monthly fee : $5.95 (paper bills) or $3.95 (online billing)
  • Rate periods included : All
  • Plan description : Calls are 5¢ per minute.

Calling plan : 6¢ Plan

  • Type : One-rate plan
  • Monthly fee : None. $10 monthly minimum usage requirement.
  • Rate periods included : All
  • Plan description : Calls are 6¢ per minute. (Customers who use fewer than 2 hours and 45 minutes of state-to-state long distance per month will pay a higher effective rate.)

Calling plan : Qwest 250 Plan

  • Type : Bucket of minutes plan
  • Monthly fee : $7.95 (Online billing and automatic credit/debit card payment required.)
  • Rate periods included : All
  • Plan description : If the entire four hours is used, the effective rate is 4¢ per minute. Additional calls are 7¢ per minute.

SBC (800) 248-9850 • sbc.com
SBC long distance service is available in Arkansas, Connecticut, Kansas, Missouri, Oklahoma and Texas. SBC offers additional long distance calling plans to customers who purchase a “Phone Solutions” bundle, which includes local phone service and other optional services. For more information on “Phone Solutions,” see the company’s web site.


Calling plan : 500 Block of Time

  • Type : Bucket of minutes plan
  • Monthly fee : $24.95
  • Rate periods included : All
  • Plan description : Includes 500 minutes of state-to-state calls. Additional calls are 7¢ per minute.

Calling plan : 300 Block of Time

  • Type : Bucket of minutes plan
  • Monthly fee : $18
  • Rate periods included : All
  • Plan description : Includes 300 minutes of state-to-state calls. Additional calls are 6¢ per minute.

Calling plan : 200 Block of Time

  • Type : Bucket of minutes plan
  • Monthly fee : $14
  • Rate periods included : All
  • Plan description : Includes 200 minutes of state-to-state calls. Additional calls are 8¢ per minute.

Calling plan : Domestic Saver

  • Type : One-rate plan
  • Monthly fee : $4.95
  • Rate periods included : All
  • Plan description : Calls are 7¢ per minute.

Calling plan : SBC Long Distance

  • Type : One-rate plan
  • Monthly fee : None
  • Rate periods included : All
  • Plan description : Calls are 10¢ per minute.

SPRINT (800) 746-3767 • www.sprint.com
Sprint offers additional long distance calling plans that are bundled with wireless calling plans or internet service. See the company’s web site for details.


Calling plan : 7¢ AnyTime

  • Type : One-rate plan
  • Monthly fee : $5.95 The fee can be reduced to $2 if the following conditions are met: $1 per month credit for ordering online; $1.95 per month credit for using the web site and e-mail for all customer service requests; $1 per month credit for remaining a Sprint customer. A $15 fee will be charged if the account is closed in the first 12 months.
  • Rate periods included : All
  • Plan description : Peak calls are 7¢ per minute.

Calling plan : Nickel AnyTime

  • Type : One-rate plan
  • Monthly fee : $8.95
  • Rate periods included : All
  • Plan description : Peak calls are 5¢ per minute.

Calling plan : Sprint Sense AnyTime

  • Type : One-rate plan
  • Monthly fee : $10.95
  • Rate periods included : All
  • Plan description : Calls are 10¢ per minute. A 10¢ per minute calling card rate is included.

Calling plan : 500 AnyTime, 1000 AnyTime

  • Type : One-rate bucket of minutes plan
  • Monthly fee : $25 or $40
  • Rate periods included : All
  • Plan description : Plans include either 500 minutes (5¢ per minute if you use all the minutes) or 1,000 minutes (4¢ per minute) of state-to-state long distance per month. Additional calls are 10¢ per minute. The monthly fee is billed one month in advance.

VERIZON (800) 483-3000 • www.verizonld.com
Verizon does not offer long distance service to residents of Alaska, District of Columbia, Maryland, Virginia or West Virginia. Not all long distance plans listed are available in every state served by Verizon.


Calling plan : eValues

  • Type : Online, two-rate plan
  • Monthly fee : None
  • Rate periods included : Peak (weekdays) and Off-Peak (all other times).
  • Plan description : Peak calls are 10¢ per minute and Off-Peak, 5¢. Must sign up online.

Calling plan : Timeless

  • Type : One-rate bucket of minutes plan
  • Monthly fee : $3
  • Rate periods included : All
  • Plan description : Includes 30 minutes of calls (10¢ per minute).

Calling plan : Best Times

  • Type : Two-rate plan
  • Monthly fee : $4.95
  • Rate periods included : Peak (Weekdays 8 a.m-5 p.m) and Off-Peak (all other times).
  • Plan description : Peak calls are 8¢ per minute and Off-Peak, 5¢.

Calling plan : State Saver

  • Type : One-rate plan
  • Monthly fee : $4.95
  • Rate periods included : All
  • Plan description : Calls are 9¢ per minute. (Discounts are given on in-state calls on a state-by-state basis. Check the company’s web site for more information.)

Calling plan : TalkTime 60, 300, 500 or 1000

  • Type : One-rate bucket of minutes plan
  • Monthly fee : $5, $21, $30 or $39.95
  • Rate periods included : All
  • Plan description : Packages offer 60 minutes for $5.00 (10¢ per minute for additional calls); 300 minutes for $21 (8¢ per minute for additional calls); 500 minutes for $30 (6¢ per minute for additional calls) or 1,000 minutes for $39.95 (5¢ per minute for additional calls).

WORKING ASSETS (800) 788-0898 • www.workingassets.com


Calling plan : 7¢ Offer

  • Type : One-rate plan
  • Monthly fee : $4.95
  • Rate periods included : All
  • Plan description : All calls are 7¢ per minute. The company donates 1% of your monthly charges to non-profit organizations that customers help to choose. Offer also includes 12 monthly coupons redeemable for free ice cream. Credits new customers $5 for the switch fee charged by the local phone company.

ZONE LD (866) 333-9663 • www.zoneld.com


Calling plan : Rate Smasher

  • Type : One-rate plan
  • Monthly fee : None*
  • Rate periods included : All
  • Plan description : Calls are 4¢ per minute to five states of your choice. (You can change your selection of states as often as you want on the company’s web site.) Calls to remaining states are 4.5¢. Rates are for good only for calls within the contiguous 48 states. Credit card billing is required.
    *A $1 network access charge is applied monthly to all residential accounts.

Interstate Long Distance Rates Survey 2002-2003

How to use this survey

This chart shows the lowest per-minute rates on interstate calls from 21 phone companies, during the Daytime (Peak) and Evening, Night & Weekend (Off-Peak) rate periods. (See plan descriptions in previous section for complete information on each plan, carrier contact numbers and web site addresses.)

Calling plans with no monthly fees or minimum usage requirements are grouped in the first section of the chart. Plans with monthly fees or minimums are grouped separately, as are plans that require customers to set up service online and require automatic billing to a credit or debit card. This year we’ve separated categories for “bucket of minutes” plans which give you a set number of minutes for one monthly fee and prepaid plans, for which you pay in advance for long distance minutes. A new category was added this year for “unlimited” plans which allow you to place as many calls as you wish during the month at no additional charge.

Most carriers offer more than one calling plan. The rates quoted are connected to the specific calling plans listed. Use the chart and listings only as a guide—rates and calling plans can change at any time.

Key to symbols used on the chart

* Lower rate applies if local access number is used instead of toll-free access.
# With online billing, monthly fee is $1.99.
** Includes local service and optional services. Monthly fee varies by state.
## Fee waived if a monthly spending minimum is reached.
### Unlimited state-to-state long distance calls included in monthly price.
**** Online billing and credit card payment required.

Carrier Daytime calls
  Calling plan Per Minute Fee / Minimum
  --- Plans without fees or minimums ---
Adelphia Long Distance None / None
Everdial Everdial 1 4.9¢ None / None
ExpressTel/ TelAmerica Ninefold None / None
SBC SBC Long Distance 10¢ None / None
  --- Plans with monthly minimums ---
AT&T One Rate 10¢ 10¢ None / $5
Qwest 6¢ Plan None / $10
  --- Plans with monthly fees ---
AT&T One Rate 7¢ Plus $3.95 / None
Excel Nickel Nation $5/Has per-call minimum
Global Crossing Exact Rate #$3.99 / None
IDT IDT Long Distance $3.95 / None
Matrix Matrix Value 7.9¢ $3.64 / None
MCI Anytime Advantage $5.95 / None
Opex ValuePlus 4.5¢ ##$2 / None
Qwest 5¢ Long Distance $5.95 / None
SBC Domestic Saver $4.95 / None
Sprint Nickel Anytime $8.95 / None
Verizon Best Times $4.95 / None
Working Assets 7¢ Offer $4.95 / None
  --- Plans that require online sign-up and/or credit card billing---
AT&T eWeekends None / $5
GE Long Distance Residential Long Distance 5.9¢ None / None
GTC Telecom Residential 5¢ Plan None / None
MCI One Net Savings None / $6
Verizon eValues 10¢ None / None
ZoneLD Rate Smasher
4.5¢ None / None
  --- "Buckets of minutes" plans ---
Qwest 250 Plan 4¢ (additional calls 7¢) ****$7.95 / None
SBC 500 Block of Time 4.9¢ $24.99 / None
Sprint 1000 Anytime $40 / None
Verizon Timeless 10¢ $3 / None
Verizon TalkTime 1000 3.9¢ $39.95 / None
  --- "Unlimited" plans ---
AT&T Unlimited Plan ***Zero/7¢ $19.95 / None
MCI Neighborhood Complete ###Zero **$49.99-$59.99/None
  --- Prepaid plans ---
Big Zoo Long Distance Service *2.9¢-3.9¢ None / $10
Net2Phone PC2Phone None / None
OneSuite OneSuite Long Distance 2.9¢ None / None
Carrier Evening, Night & Weekend calls
  Calling plan Per Minute Fee / Minimum
  --- Plans without fees or minimums ---
Adelphia Long Distance None / None
Everdial Everdial 1 4.9¢ None / None
ExpressTel/ TelAmerica Ninefold None / None
SBC SBC Long Distance 10¢ None / None
  --- Plans with monthly minimums ---
AT&T 5¢ Nights None / $5
Qwest 6¢ Plan None / $10
  --- Plans with monthly fees ---
AT&T One Rate Weekends $4.95 / None
Excel Three-Penny Plus $5.95 / None
Global Crossing Exact Rate #$3.99 / None
IDT IDT Long Distance $3.95 / None
Matrix Matrix Value 7.9¢ $3.64 / None
MCI Anytime Advantage $5.95 / None
Opex ValuePlus 4.5¢ ##$2 / None
Qwest 5¢ Long Distance $5.95 / None
SBC Domestic Saver $4.95 / None
Sprint Nickel Anytime $8.95 / None
Verizon Best Times $4.95 / None
Working Assets 7¢ Offer $4.95 / None
  --- Plans that require online sign-up and/or credit card billing---
AT&T 5¢ eWeekends None / $5
GE Long Distance Residential Long Distance 5.9¢ None / None
GTC Telecom Residential 5¢ Plan None / None
MCI One Net Savings None / $6
Verizon eValues None / None
ZoneLD Rate Smasher 4.5¢ None / None
  --- "Buckets of minutes" plans ---
Qwest 250 Plan 4¢ (additional calls 7¢) ****$7.95 / None
SBC 500 Block of Time 4.9¢ $24.99 / None
Sprint 1000 Anytime $40 / None
Verizon Timeless 10¢ $3 / None
Verizon TalkTime 1000 3.9¢ $39.95 / None
  --- "Unlimited" plans ---
AT&T Unlimited Plan ***Zero/7¢ $19.95 / None
MCI Neighborhood Complete ###Zero **$49.99-$59.99/None
  --- Prepaid plans ---
Big Zoo Long Distance Service *2.9¢-3.9¢ None / $10
Net2Phone PC2Phone None / None
OneSuite OneSuite Long Distance 2.9¢ None / None
Neither CA’s surveys nor its interpretation of survey results may be used in advertising or for any other commercial purposes. This survey was conducted by Linda Sherry of Consumer Action between Oct. 23 and Nov. 13, 2002. © Consumer Action 2002

New MCI rate hikes hit hard

As Consumer Action was preparing to go to press with this issue of CA News, financially troubled carrier MCI announced a new set of price increases that took effect Dec. 1, 2002.

The amendments will impact mostly customers who are enrolled in the company’s older calling plans, although we learned that MCI will increase the monthly fee on its Anytime Advantage plan listed in this survey.

To avoid confusion, we have updated this survey to reflect the new monthly fee of $5.95.

A list of all rate hikes can be found on the MCI web site (www.mci.com). Click on the tiny “Service Agreement & Rate Schedule” link in the lower right corner.

“Since the carriers change their calling plans all the time, make sure you are on the calling plan that makes the best sense for your calling patterns,” advised Ken McEldowney, Consumer Action’s executive director.

McEldowney also recommends that you keep an eye on your carrier’s rates by checking its web site frequently.

“In most cases, this is the only way consumers will know about rate increases in advance,” he said.

Some of the MCI calling plans that suffered rate or fee increases are:

  • MCI Weekends/All Week.

  • MCI Everyday Plus, Savings and Classic plans.

  • MCI Select 200 Advantage Option.

  • MCI One Extra, One Advanced and One Savings II.

  • 321 Direct Savings.

  • MCI 7¢ Value Plan and 7¢ Savings Plan.

As of Dec.1, MCI also reserved the right to ask for immediate full payment if the company “becomes concerned at any time about your ability to pay for services.”

Prepaid Phone Card Industry Survey

Stalking the elusive ‘clean card’

By Linda Sherry

In little more than five years, prepaid phone cards have gone from a niche market for promotional and collectible cards to a $3 billion business in 2001. Competition has caused per-minute rates to fall to as low as 1¢—but don’t expect it to be easy to find a real bargain.

Consumer Action has been keeping a close eye on the prepaid phone card industry since 1995. We set out to conduct our third prepaid phone card survey this year and found that it’s tough to directly compare cards and rates from different providers. For one thing, there are hundreds of companies and thousands of distributors and brand names in the marketplace. And it turns out that the kind of card we were stalking—a card with decent rates and no fees—is very difficult to find.

To familiarize consumers with reputable prepaid phone card companies and online distributors, Consumer Action conducted a new Prepaid Phone Card Industry Survey, which includes:

  • 25 prepaid phone card providers who have been around a while and who are active in industry events and associations.
  • The Big Three long distance carriers (AT&T, MCI and Sprint).
  • Seven online “superstore” distributors.
  • Seven nationwide or regional chain stores that sell prepaid phone cards.

The industry calls cards with no fees or surcharges “clean cards.” But our research showed that the majority of cards have fees of some kind even if they are advertised as being clean.

Instead, we set the bar by envisioning the perfect prepaid phone card. It would have low domestic (U.S.) per-minute rates of under 5¢ per minute, no per-call connection fees, no monthly (or weekly or daily) “maintenance” fees, no minimum calling time, a fair payphone surcharge of 50¢ or less and lengthy expiration period of at least six months.

Then we went looking for a card like this. For the most part we uncovered a parade of cards with “gotchas” at every turn. We found only four cards that exactly matched our criteria:

  • Costco: The warehouse shopping chain sells a 575-minute MCI Prepaid Phone Card for $19.99 with a 3.48¢ per minute domestic rate and a 24¢ payphone surcharge. It expires 24 months after the first call. The card is also available at the company’s web site (Costco.com).
  • Just Phone Cards: Two cards sold by this online distributor met our criteria, Access Europe and the Diamond Card. Access Europe has a 3.9¢ per minute domestic rate and a 50¢ pay phone surcharge. The card expires 180 days after its first use. The Diamond Card has a 4¢ per minute domestic rate and a 50¢ payphone surcharge. The card expires 540 days after its first use.
  • Sam’s Club: This discount shopping club sells AT&T prepaid phone cards in various denominations that have a 3.47¢ per minute domestic rate and a 32¢ payphone surcharge. There is no expiration date.

Runners-up

We found four noteworthy runners-up, who met all the criteria but with slightly higher domestic rates between 5¢-10¢ per minute:

  • The Clean Card (produced by Global Prepaid Alliance) has a 6.5¢ per minute domestic rate and a 59¢ payphone surcharge. The card expires six months after first use.
  • Clean and Clear (produced by Radiant Telecom) has a 5.8¢ per minute domestic rate and a 49¢ payphone surcharge. It expires two years after the first use.
  • General Electric’s GE Prepaid Phone Card has an 8.9¢ per minute domestic rate and a 50¢ payphone surcharge. The card expires six months after first use.
  • No Fee! Nickel (sold by LowestPrepaid.com) has a 5.4¢ per minute domestic rate and a 49¢ payphone surcharge. The card expires one year after last use.

‘Stars’ of the survey

On the chart on "Prepaid Phone Card Industry Survey" below, the star signifies a good deal on calls in the U.S, with:

  • per minute rates under 5¢.
  • no per-call connection fee.
  • no maintenance fees.
  • expiration policy of at least six months.
  • payphone surcharge of 50¢ or less.
  • one minute (or less) call rounding.
  • no minimum calling time.

The"pound" sign signifies the runners-up, which meet all the same criteria, except that they have rates of between 5¢-10¢ per minute.

Note: If the card we’ve chosen is one among several sold by the same distributor, the name is highlighted in bold type in the “Card brand names” column of the chart.

Neither CA’s surveys nor its interpretation of survey results may be used in advertising or for any other commercial purposes. This survey was conducted by Linda Sherry of Consumer Action between Nov. 1-Nov. 18, 2002 with funding from SBC Pacific Bell.

Prepaid Phone Card Industry Survey

Company Web site Card brand names
7-Eleven www.7-Eleven.com National chain store sells co-branded Verizon cards.
9278 Communications www.9278.com Absolute Phone Card, NTSE Phone Card, 9278 ExTra, Only Pennies, 9278 Nickel, Mega Middle East, 9278 Africa, European Kingdom, Absolute Europe, Filipino Especial
AT&T www.consumer.att.com/prepaidcard AT&T PrePaid Phone Card
Axion Communications Inc. www.axion-communications.com Mexico Mas Minutos, World Key, Passport Asia, Omni Call
BJ’s Wholesale Club www.bjs.com Eastern U.S. chain store sells its own name brand cards.
Calling Cards.com www.callingcards Online distributor offers Liberty Express, Talk USA, USA 2.2, Phone Bank, Simple2Call, Masala, Phone Bank, Uni Connect
Cheapest Talk Inc. www.cheapesttalk.com Yippie, Seriously, Definitely, WorldWide
Communitel www.communitelusa.com Liberty, Great Wall of China, Miami Heat, Any Time & Tel - Florida, Mi Patria, Tropicool, Tele-Tiempo, The Original Caribbean-Tel
Connect Telecom www.connecttelecom.com Connect Free, Frequent Caller Card
*Costco www.costco.com National chain store sells low-rate MCI cards.
CTW Prepaid www.ctwprepaid.com Penny Saver, Consumers Choice, Llama Cantado, Square Deal Cards, World Max
Dancris Telecom www.dancrisprepaid.com Liberty Select, Mideast Select, Latin Select, Africa Select
Emerge Telecom www.emergetelecom.com Home Again, American Connect, Stay Connected, True Connected, eRates
Encompass www.encompasscommunications.com Patriot Plus, Communicator
#General Electric (GE) www.geprepaid.com GE Prepaid Phone Card
Global Crest Communications www.globalcrest.com 3.5¢, No Connect, American Roadside, Lightspeed, The Bridge
#Global Prepaid Alliance www.gpa.net Africa Xpress, Amexica Numero Uno, Amigo Express, Big Easy, Capitol City, The Clean Card, Double Talk
GPA Prepaid Online www.prepaidonline.com Online distributor.
IDT www.idt.net. GlobalCall, Union Telecard
ILD Telecommunications www.ildtelecom.com Call N Carry
*Just Phone Cards www.justphonecards.com Online distributor. Access Europe, Diamond Card
#Lowest Prepaid www.lowestprepaid.com A Online distributor. No Fee! Nickel
MCI http://prepaid.mci.com/ MCI Rechargeable Prepaid Phone Card
Net Enhanced Technologies (NET) www.netincusa.com Asia 2000, China 2002, USA Prepaid Phone Card, Hollywood California Prepaid Phone Card
Oblio Telecom www.obliotelecom.com TCC Picante, Smart Asia, Smart Card, Hello Asia, Royal Card
One World Communications www.1worldcomm.com Meximundo, China World, Euro World, Mundo Latino
Orion Telecommunications (OTC Phone Cards) www.oriontelecommunications.com Direct Card, X-Press Phone Card, Hello World, Platinum Phone Card
Phonecards-Prepaid.com www.phonecards-prepaid.com Online distributor.
PhoneShark.com www.phoneshark.com Online distributor.
#Radiant Telecom www.radianttelecom.com/prepaid_cards.asp Clean and Clear, Access America, America’s Best, Call 4 Less, Double Talk, Minute Man, Acess Mexico, Solo Mexico
*Sam’s Club www.samsclub.com National chain store sells AT&T prepaid phone cards.
Sprint www.sprint.com Sprint Prepaid Phone Card
STI Phone Card Inc. www.stiphonecard.com STI California Plus, STI Phone Card, STI World Card
Target www.target.com National chain store sells its own name brand cards.
Tel3.com www.tel3prepaid.com Online distributor.
TeleCents Communications www.telecents.com Total Cents
Telstar International www.classicphonecards.com Classic Card
Tricom www.tricom.net Tricom Pass, Mi Tierra, Mi Gente, Tricom Latina, Pa Colombia.
Ultimate Communications International www.ultimatephonecards.com The Nickelcard, Half Nickel Card
Walgreens www.walgreens.com National chain store sells its own name brand cards.
WalMart www.walmart.com National chain store sells its own name brand cards.
ZapTel www.ZapTel.com Online distributor. Call The World, Call 4 Less, Genesis, Student’s Choice

Prepaid phone card evolution keeps buyers on their toes

By Michael Iacuessa

More than 24 billion minutes worth of prepaid phone card time were sold last year in the U.S., yet experts say that the use of these cards is still on the rise. But with the dizzying selection of rate plans, industry insiders say consumers need to be more informed than ever in choosing which card to buy.

The poster screaming 3.9¢ per minute in large font sounds like a good deal but the fine print may reveal costly connection fees or three-minute billing intervals.

Then there is the matter of international calling, the backbone of the prepaid phone card industry. The card with the cheapest rates to India is not likely to have low rates if you’re calling Mexico or Nigeria.

There are as many as 500 different companies active at any given time, many trying to establish small niche markets. Some say it’s good news for consumers because competition among them is fierce, with the best deals changing almost monthly among the less-established firms that target ethnic markets.

‘Good bargains’

“There are some good bargains out there for the careful consumer,” said Howard Segermark, executive director of the International Prepaid Communications Association (IPCA), an industry trade organization based in Washington, DC.

With long distance companies currently scaling back discounts on home phone and wireless calling plans, Segermark believes there is a growing incentive for people to look into prepaid cards as an alternative way to pay for calls.

Choosing when to use one—and which one to use—means doing some math beforehand. Cards with higher per-minute rates may not look enticing but if they don’t have per-call surcharges they may be the better deal for shorter calls. Conversely, calls with higher surcharges may be more suitable for longer calls if the per-minute rate is significantly lower.

This conundrum has fostered a new trend in the industry to offer cards with dual access numbers, which helps people avoid paying a per-call surcharge when they reach an answering machine or the person they want is not at home. On the dual access cards, one number offers a good rate on short calls. If the caller finds someone home, they can hang up and call back using the alternative access number with a better rate on longer calls.

According to Segermark many users carry two cards already.

“There are consumers who are growing in sophistication,” Segermark said. “For those not sophisticated in this area, they need to understand what they are buying.”

Among the pitfalls to look out for are expiration dates, cards that automatically deduct minutes weekly after the first use and cards with high extra fees on payphone calls.

Many cards have higher fees and lower per-minute rates that make them better for an hour-long chat fest.

There are rechargeable cards that offer the ability to purchase more time, which can be an advantage if you often have a small amount of time left over on your cards.

However, the recharge rate on some cards is higher, so it pays to ask before recharging a card.

The card with the cheapest rates to India is not likely to have low rates if you’re calling Mexico or Nigeria.

International pitfall

When placing international calls to some countries, users may also be charged even if no one answers. While illegal in the U.S., some countries do not have the equipment to determine whether a call was picked up. “Consumers have to recognize that this is a possibility when calling less developed countries,” said Segermark.

While there are some players in the prepaid industry that count on making money off unsophisticated users, many insiders say they believe few frequent users are fooled.

“Companies have found that users may initially be attracted to high fee cards offering a lot of minutes,” explained Doyal Bryant, president of Emerging Technology Advisors, a consulting firm. “But soon they’ll switch to a card offering fewer [more expensive] minutes if there is a lower connect charge.”

‘Hard to fool consumers’

Theresa Ward, editor-in-chief of Intele-CardNews, a publishing com-pany covering the telecommunications industry, agrees. “Gimmicks only go so far. It’s kind of hard to fool the consumer right now,” she said. “The ethnic community is always very cautious about what they are going to buy.”

Ethnic users make up the backbone of the prepaid card industry with an estimated 80% of non-mainstream cards and 20% of brand-name cards being used for international calls.

“In the mainstream market, people go to the brand names,” said Ward, referring to cards purchased at Sam’s Club, Walgreens, Costco and other large chain stores.

“The ethnic market goes a different way and those communities have a great way of communicating with each other about cards that work,” noted Ward.

More mainstream business

While foreign tourists, immigrants and those without established credit were the core users when prepaid cards first became popular in the mid 1990s, usage has become more mainstream.

Many large companies now purchase cards in bulk for employees to cap long distance costs for business travel. College students are also a growing market segment.

Business travelers are a boon for prepaid card companies. With higher incomes and less time and incentive to shop around, they are not as likely to watch the fees and rates as closely.

Bulk rates fall

However, industry insiders say prepaid cards when used carefully can save you a lot of money. Rates on cards offering large bulk minutes have come down considerably in cost.

“Some of the 300-, 400- and 500-minute calling card rates are equivalent to placing a call from your home,” said Bryant. “They are three or four cents per minute versus 12 to 15 cents a few years ago.” However, few of these cards exist without added fees.

Ward believes that prepaid cards help users to be more budget conscious when making phone calls.

“It makes you a lot more aware when you know how many minutes you have left,” she explained. “You don’t have to see a bill from the phone company at the end of the month with added taxes and other charges. If I’m calling every weekend and I don’t have a meter telling me how much it’s costing, it’s always going to be a surprise when the bill comes.”

Read the fine print

In any case, experts recommend reading the fine print before purchasing. Ten states, including California, require all terms to be disclosed before sale.

There are few barriers for a company wishing to get into the industry. That has caused problems when consumers purchased cards from firms that then went out of business.

If you have doubts, ask the retailer. Experts say that competition has resulted in distributors who work hard to educate retailers. “If the retailer can’t give you any information, that’s not a good sign,” said Ward.

Guest Columnist - Top tips for saving the most with 'dial-around' plans

By Rich Sayers

(Sayers is the founder and editor of 10-10PhoneRates.com, a web site that helps dial-around users save money by providing frequently updated comparisons between 10-10 plans and alerting consumers to rate increases.)

Consumers spend billions of dollars per year using “10-10” dial-around services. While good deals can be found, you need to watch out for catches. Here are tips to avoid phone bill surprises:

Be careful using plans that charge a minimum amount per call. 10-10-220 charges at least 99¢, even if a call is less than a minute long. 10-10-457’s minimum charges are 65¢ during the day and 35¢ for nighttime rates. Callers might intend to use all the minutes, but instead they reach an answering machine and pay nearly a dollar to leave a short message.

If you make toll calls inside your state, always check instate rates. Some plans advertise a low interstate or “state-to-state” rate, but charge more for in-state calls. An example is 101-6868, which advertises “All calls within the United States are only 7.9¢ per minute nationwide, 24 hours a day, 7 days a week.” However, that applies to interstate calls. Instate rates, not mentioned in the ads, are as high as 17.9¢.

Some dial-around plans bill existing customers at older rates. Even when lower rates are offered to attract new customers, existing customers still pay higher rates. Examples include 10-10-275, 10-10-719 and 10-10-811. Consumers need to call the providers and ask to be switched to lower rates. However, in some cases these “grandfather clauses” can be good news. WorldxChange’s 10-15-335 plan charges new users 4.9¢ a minute after 10 minutes, but allows existing customers to continue paying 4¢ per minute.

Watch Universal Service Fund (USF) charges. Typically, phone companies add 9%-11% to the cost of interstate and international calls to reimburse funds they must pay the federal government. Some providers take a different approach. 10-10-297 and other Excel Communications plans add a flat monthly fee of $1.12. This can be good for people with heavy long distance usage, but bad news for infrequent users. If a single 10-minute long interstate call is made in a month, a user could pay $1.15 for the call, but see the bill nearly double with the $1.12 USF charge.

Per-call connection fees can greatly increase the cost of short calls. In their frequent direct mail ads, AT&T promotes a 10-10-345 rate of 10¢ a minute state-to-state. A 30-cent connection fee per call is noted in smaller type. Other plans with connection fees include Qwest’s 10-10-432 and Startec’s 10-10-719.

Don’t assume a plan with a low rate for one type of call has low rates for every call. While 10-10-811 charges a 3-minute minimum from California, if someone from the golden state recommends it to an out-of-state friend, the friend will get billed a 10-minute minimum. Similarly, while 10-10-345 has fair rates to Germany and France (17¢ per minute), its rate to neighboring Belgium is not even remotely competitive at $1.19 per minute.

Calls to cell phones can cost more. A recent trend has callers paying higher rates to place international calls to mobile devices (wireless phones, pagers, some military lines). Most 10-10 plans have been affected by this trend. This policy can confuse U.S. residents, who expect that the person accepting an incoming call on a mobile phone will pay for the call. In many other countries the person calling to a mobile phone or pager pays a higher rate to do so. Phone companies increasingly are passing on these costs to users.

Pre-registration is required for the best rates. While many 10-10, 10-15 or 10-16 plans can be used at discounted rates simply by picking up a phone and dialing, some require pre-registration to get the discount. An example is Everdial’s “everdial around” service. You must register each phone line from which you will use their 10-10 number.

If you like to use dial-arounds, be careful before switching your local phone service. While regional Bell carriers support most long distance options, alternative providers do not. For example, AT&T Digital Cable phone service only allows 10-10-345 and 10-10-288 calls.

Dial-around services do not work from payphones, hotel or motel phones. Also, many computerized business or dormitory phone systems do not support dial-arounds. To take advantage of lower rates for calls from these phone lines, shop around for a low rate calling card with no connection fees.

It’s easy to divvy up the bill. When placing calls from a friend or relative’s house—or even your own if you have a roommate—10-10 plans can come in handy when paying your share of the bill. This is because billing for each 10-10 number is itemized separately with the local phone bill. Simply make sure you’re using a 10-10 number that no one else dials from that phone. Then when their next bill comes, you can reimburse the amount due for that particular plan.

The World of Dial-Arounds
There is a bewildering array of casual dialing plans—some of them don’t even start with “10-10”—and it’s easy for the uninitiated to fall into a rate trap. For complete information on fees and conditions on all 10-10 plans listed here, check the web site 10-10PhoneRates.com.
Name Dialing Code Parent Company
Lucky Dog 10-10-345 10-10-345
Everdial (Must be a customer to use the code) Everdial/Isterra
10-10-457 Same Excel
10-10-297 Same Excel
10-10-220 Same MCI-WorldCom
10-10-321 Same MCI-WorldCom
101-6868 10-16-868 PT-1
10-10-719
Same Startec
FiveLine 10-10-811 VarTec
Clear Choice 10-10-636 VarTec
Call 4¢ 10-15-335 WorldxChange
Penny Plan 10-10-629 WorldxChange
xChanger 10-10-275 WorldxChange
Source: 10-10PhoneRates.com (www.10-10phonerates.com)

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phones, telephones, survey, telephone rates


 
 

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