1999 Long Distance Telephone Rate Survey

 

Table of Contents

Callers hit with monthly minimums or fees

Competitors step in with per-minute rates of 10¢ and below

All the standard calling plans of long distance market leaders AT&T, MCI and Sprint now have monthly fees and/or minimum spending requirements, according to Consumer Action's new Long Distance Rate Survey.

"This is a much changed long distance landscape," said Linda Sherry, who conducted the 1999 survey with the assistance of intern Ben Goode. "The majority of calling plans surveyed last year had no recurring monthly fees or other special added costs or conditions. This year, the number of plans with monthly fees or minimums has almost doubled." (see run-down of surveyed carriers' calling plans)

AT&T and MCI have begun to charge monthly minimum fees to customers who do not sign up for a calling plan with a monthly fee, as well as to "basic rate" customers who don't choose any calling plan. (A calling plan is an optional service that usually allows you to make long distance calls for less money.)

The carriers credit any calls the consumer makes against the monthly minimum. For instance, if the minimum charge is $3, and a customer makes just $2 in calls, the companies will levy an additional $1 to meet the monthly minimum requirement. AT&T's One Rate Online calling plan customers are not subject to the company's $3 monthly minimum charge.

(AT&T's low income customers who qualify can sign up for a special Lifeline program that waives the $3 minimum and some government regulatory charges.)

MCI has had a $5 monthly spending minimum on its calling plans for two years, and Sprint recently began to require a $5 minimum charge on its plans without monthly fees. However, Sprint customers who are not enrolled in a calling plan are not subject to a minimum charge. (These customers pay Sprint's basic rates-30¢ per minute Monday-Friday and 10¢ per minute on weekends.)

But CA found that a handful of smaller carriers have come up with some long distance deals that are free of monthly costs or minimums.

No-fees, no minimums

The 1999 Long Distance Rate Survey identifies five carriers with per-minute rates of 11.5¢ or less around the clock with no monthly charges. IDT, based in New Jersey, offers the One Plus plan with 8¢ per minute interstate rates. Virginia-based ATCALL offers a 10¢ deal and Texas-based Matrix Telecom, 9.9¢.

Two companies serving a more limited market also offer competitive plans. California-based Pac-West Telecom, which only serves California residents, will give those that sign up before October a flat rate of 7.9¢-a penny less than its standard of 8.9¢ per minute. ExpressTel, serving customers in Arizona, California, Nevada and Utah, offers a 24-hour plan with rates of 11.5¢ per minute.

In 1998, CA surveyed 32 calling plans offered by 14 carriers and found 21 no-fee plans, two with monthly minimum spending requirements and nine with monthly fees. The new 1999 survey of 15 carriers includes 34 plans. Thirteen of the plans have no monthly fees, four carry monthly minimum spending requirements and 17 have monthly fees. In 1998, recurring charges among surveyed carriers ranged from $1 to $4.95 per month; in 1999 from $1 to $25.

Last year, CA found a number of plans with sharply higher rates in the daytime than during the evenings and at night. The 1999 survey shows instead that only two plans, offered by MCI-WorldCom and Sprint, have significantly higher daytime rates on any calling plans.

Online plans

For the first time, CA found four "online" plans-a concept just being introduced when CA conducted research for last year's survey in February 1998. Online plans require that you sign up on the company's web site and pay your bills by automatic charges to your credit or debit card. In most cases, no monthly billing statement is mailed to you-it is posted on the web site. Customers can opt to be notified by e-mail when a new statement is posted.

Online plans are offered by four surveyed companies-AT&T, Frontier Communications, Qwest and MCI-WorldCom. At press time, Frontier was the only company that still offered to mail a bill to online customers.

Three of the online plans have no monthly fee and charge 9¢ per minute. Frontier's plan has a monthly fee of $1.99 and a per-minute rate of 8¢. MCI-WorldCom offers a Sunday rate of 5¢ per minute with a monthly minimum spending requirement of $5.

To help people compare per-minute rates at a glance, CA designed a chart showing the lowest rates available on calls made in two rate periods-"Daytime" and "Evening, Night and Weekend." Calling plans that charge a minimum or fee or that require on-line sign up are separately categorized in the chart.

One-rate calling plans now dominate the market.

CA found that the majority of plans now do not price long distance calls using the standard three rate periods. However, many carriers still use these three periods ("Day," "Evening/Night" and "Weekends") to define their basic rates-the higher rates charged to customers who are not enrolled in a calling plan. These rates can be as high as 30¢ per minute on weekdays and 14¢ on evenings and weekends.

One-rate calling plans now dominate the market. They charge one flat per-minute rate on all calls, no matter what time or day of the week it is. Twenty-eight out of 34 surveyed plans price calls this way.

CA found six two-rate plans. These typically use 12-hour periods Mondays through Fridays, such as 7 a.m.-7 p.m. for Day and all other times for Evening/Night/Weekend. If you make a lot of calls in the early evening, you can save money by using a plan that offers its discounts starting at 5 p.m., such as GTE's Easy Savings or Frontier's HomeSaver.

5¢ Sundays

Discounted Sunday rates of 5¢ per minute are offered as part of calling plans by AT&T, MCI-WorldCom and Working Assets.

While many plans now have monthly fees, CA believes that high-volume long distance users should be able to realize a significant savings before accepting a plan with a recurring charge. The three largest carriers, AT&T, MCI and Sprint, charge $4.95 per month for their 10¢ a minute plan. (Sprint waives the fee when a bill totals more than $30.) AT&T and MCI include half-rate Sunday calls in their 10¢ plans. But rates of 10¢ per minute and below are available without a fee from ATCALL, Matrix, IDT and Pac-West.

To figure out if it's worthwhile to pay a fee, first look on your bill to see how many minutes you spend on long distance each month. Then divide the monthly fee by those minutes, add it to the per-minute rate, and you'll know the actual per-minute cost of paying a fee.

On GTE's Smart Savers plan with 10¢ per minute rates and a $4.95 monthly fee, a household that spent three hours on the phone each month (180 minutes) would pay a total of 12.7¢ per minute. If this household talked for nine hours per month (540 minutes), it would pay 10.9¢ per minute.

However, this plan becomes a better value if four of the nine hours of calls were placed on Sundays and the household used a monthly plan with Sunday rates of 5¢ per minute. Then the per-minute rate would average out to 8.7¢ per minute.

Even choosing a plan with a slightly lower monthly fee has little effect on the rates. The Matrix Savers plan-with a fee of $3.95-would not even save a penny per minute for the household that talked for three hours each month.

"We really don't see any reason for residential users to pay monthly recurring charges," commented CA Executive Director Ken McEldowney. "It seems like people still have choices of plans without monthly costs, and not having to pay recurring costs can really shave a lot off your monthly bill."

He allowed that many people are reluctant to go with a company that does not have brand-name recognition. "But to get the lowest rates, you might have to take a leap of faith."

Finding the lowest interstate long distance rates:

Survey shows the best per-minute rate available from each company

How to use this survey

This chart shows the lowest per-minute rates on interstate calls from 15 phone companies, during the Daytime (Peak) and Evening/Night and Weekend (Off-Peak) rate periods. (See plan descriptions for complete information on each plan and carrier contact numbers.)

Calling plans with no monthly fee or minimum usage requirement are grouped in the first section of the chart. Plans with monthly fees or minimums are grouped separately, as are a new type of plan that requires customers to set up service through the companies' web sites and/or require automatic billing to a credit or debit card. (See plan descriptions for web site addresses.)

Most of the carriers offer more than one calling plan. The rates quoted are connected to the specific calling plans listed. Other calling plans may be available.

Use the chart and listings only as a guide-rates and calling plans can change at any time.

PLEASE NOTE: This survey is not current, and should be used only as a guide. For up-to-date rate information, we suggest that you contact long distance companies directly.

Lowest Per-Minute Rates on Interstate Calls

Plans without fees or minimums

Daytime Evening/Night/Weekend
Carrier
(Plan Name)
Per minute Fee/Minimum Carrier
(Plan Name)
Per minute Fee/Minimum
ATCALL (Flat Out) 10¢ None ATCALL (Flat Out) 10¢ None
ExpressTel (Residential Plus) 11.5¢ None ExpressTel (Residential Plus) 11.5¢ None
Frontier (Frontier One) 15¢ None Frontier (HomeSaver) 10¢ None
GTE (Total Call) 14¢ None GTE (Easy Savings) 10.5¢-14¢* None
IDT (One Plus) None IDT (One Plus) None
Matrix (Just 9.9) 9.9¢ None Matrix (Just 9.9) 9.9¢ None
Pac-West Telecomm (One Rate) 8.9¢ None Pac-West Telecomm (One Rate) 8.9¢ None
TransNational (Simple Rate) 14.7¢ None TransNational (Simple Rate) 14.7¢ None

Plans with monthly minimums

Daytime Evening/Night/Weekend
Carrier
(Plan Name)
Per minute Fee/Minimum Carrier
(Plan Name)
Per minute Fee/Minimum
AT&T (One Rate) 15¢ None/$3 AT&T (One Rate) 15¢ None/$3
MCI-WorldCom (MCI One Savings) 25¢/Sundays 5¢ None/$5 MCI-WorldCom (MCI One Savings) 10¢/Sundays 5¢ None/$5
Sprint (Sprint Sense) 25¢ None/$5 Sprint (Sprint Sense) 10¢ None/$5

Plans with monthly fees

Daytime Evening/Night/Weekend
Carrier
(Plan Name)
Per minute Fee/Minimum Carrier
(Plan Name)
Per minute Fee/Minimum
AT&T (One Rate Plus) 10¢/Sundays 5¢ $4.95/None AT&T (One Rate Plus) 10¢/Sundays 5¢ $4.95/None
Excel (Simply Seven) $4.95/None Excel (Simply Seven) $4.95/None
Frontier (Frontier Select) 10¢ $4.95**/None Frontier (Frontier Select) 10¢ $4.95**/None
GTE (Smart Savers Plan) 10¢ $4.95/None GTE (Smart Savers Plan) 10¢ $4.95/None
Incomnet (Select USA) 8.9¢ $4.95**/None Incomnet (Select USA) 8.9¢ $4.95**/None
Matrix (Savers Plan)*** 9.5¢ $3.95/None Matrix (Savers Plan)*** 9.5¢ $3.95/None
MCI-WorldCom (MCI One Advantage) 10¢/weekends 5¢ $4.95/None MCI-WorldCom (MCI One Advantage) 10¢/weekends 5¢ $4.95/None
Qwest (Q.home "heavy use") $14.95/None Qwest (Q.home "heavy use") $14.95/None
Sprint (SprintSense Anytime) 10¢ $4.95**/None Sprint (SprintSense Anytime) 10¢ $4.95**/None
TransNational (Dime Anytime) 10¢ $3/None TransNational (Dime Anytime) 10¢ $3/None
Working Assets (Round the Clock Plus)**** $4.95/None Working Assets (Round the Clock Plus)**** $4.95/None

Plans that require online sign-up and/or credit card billing

Daytime Evening/Night/Weekend
Carrier
(Plan Name)
Per minute Fee/Minimum Carrier
(Plan Name)
Per minute Fee/Minimum
AT&T (One Rate Online) None AT&T (One Rate Online) None
Frontier (WebSaver) $1.99/None Frontier (WebSaver) $1.99/None
MCI-WorldCom (MCI OneNet Savings) 9¢/Sundays 5¢ None/$5 MCI-WorldCom (MCI OneNet Savings) 9¢/Sundays 5¢ None/$5
Qwest (Q.home "online") None Qwest (Q.home "online") None

Footnotes to the chart:

* Per-minute rate depends on volume of calls made.

** Fee will be waived for customers who reach certain spending levels. For Incomnet plan, spending level is $10 per month. For Frontier Select and SprintSense Anytime, the spending level is $30 per month.

*** This plan is billed in six-second increments after the first minute.

**** If you make lots of calls on Sunday, Working Assets Round the Clock Plus 5¢ Sundays may be a better deal.

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 the CA staff and intern Ben Goode in April-May 1999.
Copyright © 1999 Consumer Action

Calling card rates can vary widely

Using a calling card when away from home traditionally has been quite expensive compared to placing the same call from home. According to Consumer Action's new 1999 Long Distance Rate Survey, calling card rates as low as 15¢ per minute are available. And, more good news for consumers, some carriers have dropped the additional per-call surcharges of up to 99¢ on each call that were standard for many years.

CA found that the price of the same 10-minute interstate call carried by 15 different companies could vary from $1 to $6.29, depending on the carrier and special calling plan, if any.

15¢ per minute

ExpressTel, a carrier serving customers in Arizona, California, Nevada and Utah (where it's known as TelAmerica), offers the lowest per minute rate of 15¢ on its Precise Calling Card. To make the deal even better, ExpressTel charges no fees or per-call surcharges, bills the call in increments of six seconds and charges the same rate for in-state calls. (Most carriers bill calling card calls by the minute and the majority have different, and sometimes higher rates, for instate long distance calls.)

However, ExpressTel and other carriers surveyed add a 30¢ surcharge on all calls placed at pay phones using an 800 access number. The charge goes to reimburse the owner of the pay phone for lost revenues when a toll-free call is placed. This charge is added with every new call from the pay phone, even if you press the # key to get another dial tone.

IDT, based in Santa Clara, Calif., charges 19¢ per minute for calling card calls for people enrolled in its fee-free One Plus plan. Pac-West Telecom of Stockton, Calif., which only serves California residents, charges 19.9¢ per minute for interstate calls. Neither carrier charges any fees or per-call surcharges on their cards.

Discount calling plans

Some of the highest calling card rates are charged by Big Three carriers AT&T, MCI and Sprint. However, all offer fee-based calling card plans that have lower rates and do not include a per-call surcharge.

AT&T charges $6.29 for a 10-minute interstate calling card call at its standard rates, including a 99¢ surcharge. MCI's standard calling card charge for the 10-minute call is $5.99, including a 99¢ per-call surcharge. If you enroll in AT&T's One Rate Plan or MCI's Basic Calling Card Plan-both of which charge a monthly fee of $1-you'll pay 25¢ per minute.

But you can get the same 25¢ per minute calling card rate with no monthly fee or per-call surcharge from Frontier Communications.

Sprint's calling card, Foncard, carries a 50¢ per minute standard rate. If you enroll in a special Sprint Sense Anytime plan with a monthly fee of $10, you will pay 10¢ a minute for calling card calls.

Free short calls

Matrix Telecom charges a standard calling card rate of 25¢. It offers the Take A Minute plan for calling card calls, which has a $1.95 monthly fee and a $3.95 one-time set-up fee. Calls are billed at 14.9¢ a minute. However, up to 24 calls of less than a minute are included free, which might pay off if you call to check your answering machine or leave short messages for family members.

Excel charges 89¢ for the first minute of every calling card call, after which the rate is 31¢ per minute. But if you are calling another Excel customer-or your home if you are an Excel customer-the rate drops to 15.5¢ per minute.

Chart comparing calling card rates and surcharges

Lowest Calling Card Rates and Surcharges

Plans without Per-call Surcharge or Monthly Fee

Carrier 10-Minute Interstate Call Per-call Surcharge Included in Rate Monthly Fee Calling Card Plan
ExpressTel $1.50 None No fee Precise calling card
ATCALL $1.60 None No fee standard rates
IDT $1.90 None No fee One Plus plan
Pac-West $1.99 None No fee standard rates
Frontier $2.50 None No fee Select One plan
Excel $3.68 None * No fee standard rates
Sprint $5.00 None No fee Foncard

Plans with Monthly Fee

Carrier 10-Minute Interstate Call Per-call Surcharge Included in Rate Monthly Fee Calling Card Plan
Sprint $1.00 None $10.00 SprintSense Anytime
Qwest $1.00 None $14.95 Q.home plan
AT&T $1.00 None $19.90 - $44.94 Personal Network
Matrix $1.49 None $1.95 *** Take A Minute plan
AT&T $2.50 None $1.00 One Rate plan
MCI $2.50 None $1.00 Basic Calling Card Plan
Working Assets $2.50 None $1.00 Calling Card Add-on Plan
Incomnet $2.50 None $4.95 ** Select Plus plan

Plans with Per-call Surcharge

Carrier 10-Minute Interstate Call Per-call Surcharge Included in Rate Monthly Fee Calling Card Plan
Matrix $2.75 25¢ No fee standard rates
Working Assets $3.30 30¢ No fee standard rates
TransNational $2.19 - $2.69 **** 40¢ No fee standard rates
GTE $4.30 80¢ No fee standard rates
Qwest $3.99 99¢ No fee standard rates
MCI $5.99 99¢ No fee standard rates
AT&T $6.29 99¢ No fee standard rates

Footnotes to the chart:

* Higher first minute rate (89¢).

** Monthly fee is waived on bills of more than $10.

*** $3.95 one-time set-up fee. Plan allows 24 free calls per month lasting less than one minute.

**** Peak and Off-Peak rates vary.

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 the CA staff and intern Ben Goode in April-May 1999.
Copyright © 1999 Consumer Action

Discounts for heavy users and new package deals

Some of the calling plans offered this year defy standard long distance definitions. Among new offerings are a prepaid long distance plan using new technology to send calls over the Internet and an all-in-one plan with Internet access as well as 10¢ per minute rates on wireless, calling card, personal 800 and some international calls.

Prepaid Internet Calls

The IDT Net2Phone plan charges 5¢ per minute for interstate calls, but customers must pay in advance in blocks of $25 worth of phone time. To use the plan, you must call a local access number and use a personal identification number to reach the company.

Calls are converted into digital data, sent across the Internet and reconverted on the receiving party's end. Some users have complained about poor sound quality, while others say the price makes up for occasional echoes and other sound problems.

AT&T's Personal Network Packages tie together rates for Internet access and other long distance services. All three packages include a personal toll-free 800 number, a popular option for parents, college students and family members who travel a lot and need to call home frequently.

Package deals

There are three variations in AT&T's Personal Network Packages:

  • The $19.90 per month package includes Internet access, 10¢ per minute rates on interstate long distance calls and calling card calls, personal toll-free number and international calls to Canada, England and parts of Mexico.
  • The $29.99 monthly package does not include Internet access but does include wireless calls as well as the rates and options from the $19.90 package.
  • The $44.94 package includes Internet access and 10¢ per minute wireless, long distance, calling card, personal 800 and international calls to Canada, England and parts of Mexico. Other international calls carry AT&T's deepest discounts.

Big fee = low rate

Qwest offers a special plan for people who make many long distance calls from home or using their calling card. The plan has a monthly fee of $14.95 and 5¢ per minute rate on all interstate calls. Including the fee, callers who make only one hour of calls each month using the plan would be paying an effective rate of 29.9¢ per minute.

If you make 15 hours of calls-approximately a half hour of long distance calls per day-you are paying 6.6¢ per minute. The plan also includes a calling card and personal toll-free number with rates of 10¢ per minute and no per-call surcharge.

The Sprint Unlimited plan has a monthly fee of $25 and offers 1,000 minutes of free calls on weekends. Weekday calls are not free-they are billed at 10¢ per minute, and if your weekend calls exceed the free allotment, you are billed 5¢ per minute.

To get the maximum value from this plan, you'd have to take full advantage of your 1,000 free minutes, which means making about four hours of long distance calls each weekend at a cost of 2.5¢ per minute.

New charges on your long distance phone bill

By now most people who pay for long distance services have noticed that their bills feature two new charges that the companies claim are required by the federal government. They are the universal connectivity charge and a carrier line charge, although your carrier's name for and description of these two charges may vary.

And those who use calling cards, personal 800 numbers or prepaid phone cards at pay phones may get hit with an extra 30¢ or so for each call when they access their carrier using an 800 access number. This is the amount that the owner of the 800 number must pay to the owner of the pay phone where the call is placed.

Blame the FCC?

The carriers blame the Federal Communications Commission (FCC), saying that the telecommunications oversight agency has mandated the charges. It is true that long distance carriers are required to contribute a percentage of revenues to provide more affordable service to low income users, schools and libraries.

However, the FCC does not require companies to recover these costs directly from customers, but most carriers now pass them along as itemized charges-often labeled the universal service fee or universal connectivity charge-on customers' bills. The charges are expressed as a percentage of the bill, such as 4% or 5%, or as a flat monthly fee, typically $1 or less.

Charge for local access

Another charge on long distance bills is the presubscribed interexchange carrier charge (PICC), sometimes called a carrier line charge or national access fee. Recent changes made by the FCC modified the charges that all long distance companies must pay local phone companies for local network access.

The carrier line charge represents what long distance carriers must pay the local phone companies for use and maintenance of local lines. This charge currently ranges from 80¢ to $1.10 per month, depending on your long distance carrier. In July, an increase has been approved of 60¢ to 75¢ more per line.

If you have local phone service but have not selected a long distance carrier, the local company may add a carrier line charge to your local phone bill.

"Different companies take different approaches to recovering these fees, and that is very confusing for consumers," said Linda Sherry of Consumer Action. "The companies inform us that the charges are 'mandated by the FCC.' Yes, interstate carriers are required to pay the costs-but they are not required to pass them directly along to consumers!"

"Consumers should ask how these pass-through costs are figured," Sherry said. "Since different companies use different approaches, you might be better off with a carrier who uses a percentage rather than a flat fee."

Domestic Calling Plans

(Unless otherwise noted, all carriers serve customers nationwide.)

ATCALL
(800) 411-9696
(This company bills calls in six-second increments.)

Flat Out

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

AT&T
(800) 222-0300

One Rate

  • Type: One-rate plan
  • Monthly fee: None. However, the plan has a $3 monthly minimum charge.
  • Rate periods included: All
  • Plan description: Interstate calls are 15¢ per minute.

One Rate Plus

  • Type: One-rate plan
  • Monthly fee: $4.95
  • Rate periods included: All
  • Plan description: Interstate calls are 10¢ per minute, except on Sundays, when they are 5¢ per minute.

One Rate Online

  • Type: One-rate, online billing (Charges are automatically billed to your credit or debit card and you must look at your statement online.)
  • Monthly fee: None
  • Rate periods included: All
  • Plan description: You must sign up for this plan on AT&T's web site (www.att.com). Interstate calls are 9¢ per minute.

EXCEL
(800) 875-9235 or 8843
(This company bills calls in six-second increments after the first minute.)

Dime Deal

  • Type: One-rate plan
  • Monthly fee: $1
  • Rate periods included: All
  • Plan description: Interstate calls are 10¢ per minute.

Simply Seven

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

EXPRESS TEL
(800) 748-6350
(Serves Arizona, California, Nevada and Utah. Six-second billing is used.)

Residential Plus

  • Type: One-rate plan
  • Monthly fee: None
  • Rate periods included: All
  • Plan description: all interstate calls made in the continental U.S. are 11.5¢ per minute. (Calls to Hawaii and Alaska are 19¢ per minute.)

FRONTIER
(800) 482-4848

HomeSaver

  • Type: Two-rate plan
  • Monthly fee: None
  • Rate periods included: Peak (8 a.m.-5 p.m. Mondays through Fridays) and off-peak (all other times).
  • Plan description: Interstate calls are 25¢ per minute during peak hours and 10¢ per minute at all other times.

Frontier One

  • Type: One-rate plan
  • Monthly fee: None
  • Rate periods included: All
  • Plan description: Interstate calls are 15¢ per minute.

Frontier Select

  • Type: One-rate plan
  • Monthly fee: $4.95 when monthly bills total less than $30.
  • Rate periods included: All
  • Plan description: Interstate calls are 10¢ per minute.

WebSaver

  • Type: Online billing. Charges are automatically billed to your credit or debit card and bills are posted online. Sign up for the plan on Frontier's web site (www.frontiercorp.com).
  • Monthly fee: $1.99
  • Rate periods included: All
  • Plan description: Interstate calls are 8¢ per minute.

GTE
(800) 483-3737

GTE Total Call

  • Type: One-rate plan
  • Monthly fee: None
  • Rate periods included: All
  • Plan description: Interstate calls are 14¢ per minute.

GTE Easy Savings

  • Type: Two-rate, volume discount
  • Monthly fee: None
  • Rate periods included: Customers may choose their own two 12-hour peak and off-peak periods on the hour from 5 a.m.-5 p.m. to 8 a.m.-8 p.m. For example, you may choose 6 p.m. to 6 a.m. as your off-peak hours.
  • Plan description: Easy Savings customers pay 27¢ per minute during peak hours and 14¢ per minute off peak. Monthly long distance bills of $10-$24.99 are discounted by 10% and bills of more than $25 by 25%.

Smart Savers Plan

  • Type: One-rate plan
  • Monthly fee: $4.95
  • Rate periods included: All
  • Plan description: Interstate calls are 10¢ per minute.

Solid Cents

  • Type: One-rate plan
  • Monthly fee: $2.95
  • Rate periods included: All
  • Plan description: Interstate calls are 12¢ per minute.

IDT
(800) 438-7964 or (800) 225-5438
(You may have to leave a message in order to speak with a sales representative.)

IDT One Plus

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

Net2Phone

  • Type: One-rate plan. Phone calls are sent over the Internet. Callers do not need a computer.
  • Monthly fee: None. However, customers must pay in advance for phone time in $25 increments.
  • Rate periods included: All
  • Plan description: Interstate calls are 5¢ per minute. To use the plan, you must dial a local access number, a personal identification number and the number you are calling-up to 32 numbers. Sound quality can be poor.

INCOMNET
(877) 225-5603

Select USA

  • Type: One-rate plan
  • Monthly fee: $4.95 (Waived if monthly bill totals at least $10.)
  • Rate periods included: All
  • Plan description: Interstate calls are 8.9¢ per minute.

MATRIX
(800) 282-0242

Matrix Savers Plan

  • Type: One-rate plan
  • Monthly fee: $3.95
  • Rate periods included: All
  • Plan description: Interstate calls are 9.5¢ per minute. (Rates are billed in six second increments after the first minute.)

Just 9.9

  • Type: One-rate plan
  • Monthly fee: None
  • Rate periods included: All
  • Plan description: Interstate calls are 9.9¢ per minute.

MCI-WORLDCOM
(800) 444-3333

One Savings

  • Type: Two-rate plan with discount Sunday rates.
  • Monthly fee: None. However, this plan has a $5 monthly minimum usage requirement.
  • Rate periods included: Peak rate period is on Monday-Friday, 7 a.m.-7 p.m.).
  • Plan description: Interstate calls are 25¢ per minute during peak hours, 5¢ per minute on Sundays and 10¢ per minute at other times.

One Advantage

  • Type: Two-rate plan
  • Monthly fee: $4.95
  • Rate periods included: Weekends (Friday at midnight to Sunday at midnight) and weekdays (all other times).
  • Plan description: Interstate calls are 10¢ a minute on weekdays and 5¢ per minute on weekends.

One Net Savings

  • Type: One-rate, online billing. (Charges are automatically billed to your credit or debit card and statement is posted online.)
  • Rate periods included: Sundays are billed at a lower rate.
  • Monthly fee: $5 monthly minimum usage requirement.
  • Plan description: Interstate calls are 9¢ per minute Monday-Saturday and 5¢ per minute on Sunday.

PAC-WEST TELECOMM
(800) 390-1189
(Carrier serves only California residents.)

One Rate

  • Type: One-rate plan
  • Monthly fee: None
  • Rate periods included: All
  • Plan description: Interstate calls within the continental U.S. are 8.9¢ per minute and 13.9¢ per minute for calls to Alaska and Hawaii. (Under a special promotion being offered through Oct. 31, the rate for interstate calls within the continental U.S. is 7.9¢.)

QWEST
(800) 860-2255
(After the first minute, calls are billed by the second.)

Q.home

  • Type: One-rate plan
  • Monthly fee: $4.95
  • Rate periods included: All
  • Plan description: Interstate calls are 9¢ a minute.

Q.home (online)

  • Type: One-rate plan. You must sign up for this plan on Qwest's web site. (Charges are automatically billed to your credit or debit card.)
  • Monthly fee: None
  • Rate periods included: All
  • Plan description: Interstate calls are 9¢ per minute.

Q.home (heavy use)

  • Type: One-rate plan
  • Monthly fee: $14.95
  • Rate periods included: All
  • Plan description: Interstate calls are 5¢ per minute.

SPRINT
(800) 746-3767

Sprint Sense

  • Type: Two-rate plan
  • Monthly fee: None. However, this plan has a $5 monthly minimum usage requirement.
  • Rate periods included: Peak (7 a.m.-7 p.m. Mondays through Fridays) and Off-Peak (all other times).
  • Plan description: Peak-period interstate calls are 25¢ per minute and off-peak calls are 10¢ per minute.

Sprint Sense Anytime

  • Type: One-rate plan
  • Monthly fee: $4.95 (Fee is waived for people who spend $30 or more per month.)
  • Rate periods included: All
  • Plan description: Interstate calls are 10¢ per minute.

Sprint Unlimited

  • Type: One-rate plan
  • Monthly fee: $25
  • Rate periods included: All
  • Plan description: Plan fee includes 1,000 minutes (more than 16 hours) of free weekend calls each month. (Beyond 1,000 minutes, weekend calls are 5¢ per minute.) Calls on weekdays and weekday evenings are 10¢ per minute.

TRANSNATIONAL COMMUNICATIONS
(800) 800-8400

Simple Rate

  • Type: One-rate plan
  • Monthly fee: None
  • Rate periods included: All
  • Plan description: Interstate calls are 14.7¢ per minute.

Dime Anytime

  • Type: One-rate plan
  • Monthly fee: $3
  • Rate periods included: All
  • Plan description: Interstate calls are 10¢ per minute.

WORKING ASSETS
(800) 788-8588

Round the Clock Plus

  • Type: One-rate plan
  • Monthly fee: $4.95
  • Rate periods included: All
  • Plan description: Interstate calls are 9¢ per minute.

Round the Clock Plus Weekends

  • Type: Two-rate plan
  • Monthly fee: $4.50
  • Rate periods included: Peak (Mondays through Saturdays) and off-peak (Sundays).
  • Plan description: Interstate rates are 10¢ per minute on Mondays-Saturdays and 5¢ on Sundays. (For the first six months, customers will receive the 5¢ per minute rate on Saturdays, too.)

New 5¢ long distance calling plans aren't worth a plug nickel for most callers:
Consumer Action releases update to its 1999 Long Distance Rates Survey

Long distance carriers have launched a "Nickel War" with a battery of discount residential calling plans promising callers rates as low as 5¢ per minute on interstate calls. But the majority of the plans have recurring monthly fees as high as $9.95-often are buried in ads-and could cost all but high-volume callers a lot more than currently available no-fee plans.

"With effective per-minute rates of up to 21.5¢, for many consumers these 5¢ calling plans aren't worth a plug nickel," said CA Executive Director Ken McEldowney. "In most cases, callers would have to talk for two or more hours each month before they'd break even with the cost of a no-fee plan. "According to the Federal Communications Commission, in 1998 the average household spent 144 minutes (2 hours, 24 minutes) each month on long distance calls, and the median household used 79 minutes (1 hour, 19 minutes).

In June of this year, CA's 1999 Long Distance Rates Survey identified 8 plans with no monthly fees and 24-hour flat rates ranging from 8¢-14.7¢ per minute. To gauge the impact of monthly fees, CA took an average of those rates (11.5¢ per minute) and compared it to the actual per-minute cost of the new plans.

CA factored the true cost of the monthly fees, arriving at monthly break-even points in hours, effective per-minute rates and monthly savings for each plan. (These figures can be found on the chart at the end of the release.)

Break-even point.

Of the discount plans surveyed, two-AT&T "Nickel-A-Minute" and Qwest "Communicator"-would require 2 1/2 hours of use per month to break even with the average no-fee rate of 11.5¢ per minute. By comparison, GTC Telecom's 5¢ plan with a $1.95 fee would break even after half an hour.

Effective per-minute rates.

Consumers who enrolled in the AT&T "Nickel-A-Minute" and Qwest "Communicator" plans and used them for an hour or less each month would be paying 21.5¢ per minute. MCI-WorldCom customers who sign up for "5¢ Anytime" would pay 19.9¢ per minute in the first hour. GTC Telecom's customers would pay 8.2¢ in the first hour.

Monthly savings.

CA found that even at four or more hours per month, savings were limited strikingly by the level of monthly fees. At four hours per month, AT&T's "Nickel-A-Minute" customers ($9.95 fee) would save only $5.65 each month over those who used a no-fee plan with an average rate of 11.5¢ per minute. GTC Telecom customers ($1.95 fee) would pay $13.65 less per month.

CA's update, released today (10/21/99), includes offerings by the biggest carriers-AT&T, MCI-WorldCom and Sprint-as well as lesser known companies such as Qwest, IDT, GTC Telecom and Talk.com, an Internet-based carrier. Of the 13 plans, 12 have monthly fees ranging from $1.95-$9.95.

The monthly fees on two plans can be waived if customers agree to pay their bills automatically using a credit card (GTC Telecom's "Five Cents Long Distance" and Qwest's "Countdown").

"We've always advised long distance users to look for a fee-free deal," said CA Editorial Director Linda Sherry, who conducted the survey. "But the effect of these much higher monthly fees is an eye-opener. They really eat up any available discounts in the per-minute rate."

Impact of monthly fees on the new one-rate long distance calling plans

AT&T Nickel-a-Minute

Hours Minutes 11.5¢ average 5¢ + $9.95 Effective Per-Minute Rate Hours to break-even Monthly savings
             
1 60 $6.90 $12.95 21.5¢ 2 1/2 (-$6.05)
2 120 $13.80 $15.95 13.2¢ (-$2.15)
3 180 $20.70 $18.95 10.5¢ $1.75
4 240 $27.60 $21.95 9.1¢ $5.65
8 480 $55.20 $33.95 7.0¢ $21.25

AT&T One Rate 7¢ Plan

Hours Minutes 11.5¢ average 7¢ + $5.95 Effective Per-Minute Rate Hours to break-even Monthly savings
             
 1 60 $6.90 $10.15 16.9¢ 2 1/4 (-$3.25)
2 120 $13.80 $14.35 11.9¢ (-55¢)
3 180 $20.70 $18.55 10.3¢ $2.15
4 240 $27.60 $22.75 9.4¢ $4.85
8 480 $55.20 $39.55 8.2¢ $15.65

GTC Telecom Five Long Distance with fee*

Hours Minutes 11.5¢ average 5¢ + $1.95 Effective Per-Minute Rate Hours to break-even Monthly savings
             
1 60 $6.90 $4.95 8.2¢ 1/2 $1.95
2 120 $13.80 $7.95 6.6¢ $5.85
3 180 $20.70 $10.95 $9.75
4 240 $27.60 $13.95 5.8¢ $13.65
8 480 $55.20 $25.95 5.4¢ $29.25
* $1.95 fee will be waived with credit card billing.

GTC Telecom FreeNet

Hours Minutes 11.5¢ average 7.9¢ + $4.95 Effective Per-Minute Rate Hours to break-even Monthly savings
             
1 60 $6.90 $9.69 16.1¢ 2 1/4 (-$2.79)
2 120 $13.80 $14.43 12¢ (-63¢)
3 180 $20.70 $19.17 10.6¢ $1.53
4 240 $27.60 $23.91 9.9¢ $3.69
8 480 $55.20 $42.87 8.9¢ $12.33

IDT 5¢ Long Distance Plan

Hours Minutes 11.5¢ average 5¢ + $3.95 Effective Per-Minute Rate Hours to break-even Monthly savings
             
1 60 $6.90 $6.95 11.5¢ 1.00 (-5¢)
2 120 $13.80 $9.95 8.2¢ $3.85
3 180 $20.70 $12.95 7.1¢ $7.75
4 240 $27.60 $15.95 6.6¢ $11.65
8 480 $55.20 $27.95 5.8¢ $27.25

MCI-WorldCom 5¢ Anytime

Hours Minutes 11.5¢ average 5¢ + $8.95 Effective Per-Minute Rate Hours to break-even Monthly savings
             
1 60 $6.90 $11.95 19.5¢ 2 1/4 (-$5.05)
2 120 $13.80 $14.95 12.4¢ (-$1.15)
3 180 $20.70 $17.95 9.9¢ $2.75
4 240 $27.60 $20.95 8.7¢ $6.65
8 480 $55.20 $32.95 6.8¢ $22.25

Qwest Communicator

Hours Minutes 11.5¢ average 5¢ + $9.95 Effective Per-Minute Rate Hours to break-even Monthly savings
             
1 60 $6.90 $12.95 21.5¢ 2 1/2 (-$6.05)
2 120 $13.80 $15.95 13.2¢ (-$2.15)
3 180 $20.70 $18.95 10.5¢ $1.75
4 240 $27.60 $21.95 9.1¢ $5.65
8 480 $55.20 $33.95 7.0¢ $21.25

1999 Long Distance Rate Survey Update

Neither CA's surveys nor its interpretation of survey results may be used in advertising or for any other commercial purposes. This survey update was conduted by Linda Sherry of the CA staff in October 1999. © Consumer Action 1999

This chart lists calling plans that were introduced between June-September 1999, in order to update Consumer Action's 1999 Long Distance Rates Survey, published in June (see above). This Update is designed to be used along with that survey. Most of the calling plans listed in Consumer Action's June survey still are available and may be preferable, depending on your long distance calling habits.

In the second half of this section, you can find a detailed rundown on these calling plans, along with information on how to contact the carriers.

One rate plan (Same per minute rate all the time): Plans with monthly fees

Carrier Calling Plan Per-Minute Rate: All Day Per-Minute Rate: Peak Per-Minute Rate: Off-Peak Monthly Fee or Minimum
           
AT&T One Rate 7¢ Plan -- -- $5.95 / None (*a)
AT&T Nickel-a-Minute -- -- $9.95 / None
GTC Telecom 5¢ Long Distance -- -- $1.95 / None (*b)
GTC Telecom GTC FreeNet 7.9¢ -- -- $4.95 / None (*c)
IDT 5¢ Long Distance -- -- $3.95 / None
MCI-WorldCom MCI 5¢ Anytime -- -- $8.95 / None
Qwest Communicator     $9.95 / None

Two rate plans (Peak and off-peak rates apply): Plans with monthly fees

Carrier Calling Plan Per-Minute Rate: All Day Per-Minute Rate: Peak Per-Minute Rate: Off-Peak Monthly Fee or Minimum
           
AT&T (Unadvertised offer) (*d) -- 25¢ $1.95 / None
MCI-WorldCom 5¢ Everyday Savings -- 25¢ $1.95 / $5
MCI-WorldCom 5¢ Everyday Plus -- $4.95 / None
Qwest Countdown -- $4.95 / None (*b)
Sprint Nickel Nights -- 10¢ 5¢ (*e) $3.95 / None

Plans requiring online sign-up and/or credit card billing

Carrier Calling Plan Per-Minute Rate: All Day Per-Minute Rate: Peak Per-Minute Rate: Off-Peak Monthly Fee or Minimum
           
TALK.COM 9¢ Long Distance 9¢ (*f) -- -- None/ None

Footnotes:

  1. Customers who also sign up for AT&T local call service (where available) pay $4.95 per month.
  2. Monthly fee is waived if customer opts for automatic credit card billing.
  3. Includes unlimited Internet access through local access numbers in 17 major metropolitan areas only.
  4. AT&T offers to match MCI-WorldCom's Everyday Savings Rate for customers who request it.
  5. Off-Peak rate is from 7 p.m. - 7 a.m. seven nights a week.
  6. For first 30 days of service, interstate calls are billed at 5¢ per minute.

AT&T
(800) 222-0300

Calling plan name: 7¢ A Minute Plan
Type: One-rate plan
Monthly fee: $5.95. (Fee is $4.95 per month if customers also sign up for AT&T local toll service.)
Rate periods included: All
Plan description: Interstate calls are 7¢ per minute.

Calling plan name: Nickle-A-Minute
Type: One-rate plan
Monthly fee: $9.95.
Rate periods included: All
Plan description: Interstate calls are 5¢ per minute.

Calling plan name: None. AT&T states that it will match current calling plans offered by Sprint and MCI if customers ask.
Type: Two-rate plan
Monthly fee: $1.95.
Rate periods included: All
Plan description: Interstate calls are 5¢ per minute from 7 p.m. - 7 a.m. on weekdays and all weekend, and 25¢ per minute from 7 a.m. - 7 p.m. on weekdays.

GTC TELECOM
(800) 486-4030 or (888) 935-5959,

Calling plan name: 5¢ Long Distance
Type: One-rate plan
Monthly fee: $1.95. (Waived if you agree to automatic billing on your credit card.)
Rate periods included: All
Plan description: Interstate calls are 5¢ per minute.

Calling plan name: FreeNet
Type: Long distance and Internet access
Monthly fee: $4.95.
Rate periods included: All
Plan description: Interstate calls are 7.9¢ per minute. Plan includes unlimited Internet access.

IDT
(877) 535-2368

Calling plan name: 5¢ Long Distance Plan
Type: One-rate plan
Monthly fee: $3.95.
Rate periods included: All
Plan description: All interstate calls are billed at 5¢ per minute. (15¢ to Alaska and Hawaii.) Calls are biled in six-second increments.

MCI-WORLDCOM
(800) 444-3333

Calling plan name: 5¢ Everyday Savings
Type: Two-rate plan
Monthly fee: $1.95. (Plan also is subject to a $5 monthly spending requirement.)
Rate periods included: Peak (weekdays from 7 a.m. - 7 p.m.) and Off-Peak (all other times).
Plan description: Interstate calls are 25¢ per minute during Peak hours and Off-Peak, 5¢ per minute.

Calling plan name: 5¢ Everyday Plus
Type: Two-rate plan
Monthly fee: $4.95.
Rate periods included: Peak (weekdays from 7 a.m. - 7 p.m.) and Off-Peak (all other times).
Plan description: Interstate calls are 7¢ per minute during Peak hours and Off-Peak, 5¢ per minute.

Calling plan name: MCI 5¢ Anytime
Type: One-rate plan
Monthly fee: $8.95.
Rate periods included: All
Plan description:Interstate calls are 5¢ per minute.

QWEST
(800) 860-2255

Calling plan name: Countdown
Type: Two-rate plan
Monthly fee: $4.95. (Fee waived if you accept credit card billing.)
Rate periods included: All
Plan description: Interstate calls are 5¢ per minute on weekends and 9¢ per minute on weekdays. The weekday rate will drop by a half-cent every three months, through the 25th month, when it will reach 5¢ per minute.

Calling plan name: Communicator
Type: One-rate plan
Monthly fee: $9.95.
Rate periods included: All
Plan description: Interstate calls are 5¢ per minute all the time. The plan includes a calling card with no surcharge and a per-minute interstate rate of 10¢ per minute.

SPRINT
(800) 746-3767

Calling plan name: Nickel Nights
Type: Two-rate plan
Monthly fee: $5.95.
Rate periods included: Off-Peak (7 p.m. - 7 a.m.) and Peak (all other times).
Plan description: Off-peak-period interstate calls are 5¢ per minute and Peak calls are 10¢ per minute.

TALK.COM
(877) 482-5599

Calling plan name: 5¢ Long Distance
Type:One-rate plan
Monthly fee:None
Rate periods included: For the first 30 days of service, all interstate calls are 5¢ per minute. Following the introductory period, interstate calls are 9¢ per minute.

New CA publications

Consumer Action (CA) has recently completed the following publications:

  • You Can Help Fight Phone Fraud (English or Spanish)
    A 16-page guide to help consumers avoid and detect phone fraud, including slamming, cramming, toll fraud, calling card fraud, identity theft and wireless (cell) phone fraud. Lists resources for information as well as reporting phone fraud.
  • Miracle Cures Can Make You Sick (English or Spanish)
    A fact sheet that explains how to avoid unproven remedies, untested medical products, unlicensed practitioners and unfounded health claims.
  • It's Your Choice - Are Medicare HMOs right for you? (English or Spanish)
    A 30-page booklet advises people currently in Medicare on the changes taking place in Medicare and what they mean. Addresses the pros and cons of Medicare HMOs, offers practical advice to help people in Medicare decide whether or not to join a Medicare HMO. Suggests how to navigate the Medicare HMO system efficiently, appeal HMO decisions, assess prescription drug benefits, predict out-of-pocket expenses, and choose a primary care physician.

All publications are free and available in bulk to community-based organizations.

 

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