Articles About Long Distance

Types of Long Distance Calling
When "Unlimited" Doesn't Really Mean Unlimited
What's the Deal with Dial-Arounds?
The Truth About Flat Rate Long Distance Calling

When "Unlimited" Doesn't Really Mean Unlimited.

The Facts About Another Phone Company "Gotcha"

What do the phrases "Unlimited Long Distance" and "Unlimited Calling" mean to you? You probably think it means that you can call as much as you want, whenever you want and to wherever you want, right? Well, that's not what it means to many phone companies.

"Unlimited" plans are the latest "money saving" offerings from phone companies. They promise unlimited calls for one, flat monthly rate. It's true that many calls are covered under the unlimited-ness of the plans, but you shouldn't assume everything is – it could really cost you. Like most "too good to be true" offers, hidden restrictions, rules and fees abound in the fine print.

There are three ways that phone companies limit unlimited plans. One way is by limiting total calling minutes. A second way is by permitting only what they deem as "qualified" calls. A third way is by restricting "unlimited" calls to those made to in-network members.

Some companies call their plans "unlimited" but then limit the total calling minutes in the fine print! Hard to believe? It's true.

For example, Qwest's "Qwest® Unlimited Calling Plan" claims "unlimited calling talking for all direct dialed domestic calls." Most people would believe that this means all calls are covered. But buried in the fine print is the truth – the plan only covers only the "first 5000 monthly minutes." A 30-day month has over 43,000 minutes – clearly this plan is not unlimited!

As if that wasn't bad enough, the fine print also states that once a customer exceeds the 5000 minutes, their usage "will be evaluated for program continuance". Customers that don't limit their calls might get kicked off their unlimited calling plan!

Using Your Phone Line For Internet Dial-up May Cost You Extra.
It's not just limits on calling minutes that phone users should be concerned about. Some have special restrictions for Internet and calling card usage.

SBC 's "Unlimited Long Distance Plan" excludes the use of Internet – a common use for phone lines. Customers that call long distance to an Internet dial-up service (such as AOL ), could get a huge surprise on their next month's phone bill. A $50 "unlimited" plan can quickly result in a bill for hundreds or thousands of dollars.

How is this possible? The details of SBC 's plan state that if the plan is used for unqualified services (such as Internet) the "customer will be moved to a higher priced per minute usage plan." A few hours each day of not-included Internet usage at high per minute rates can easily send a bill through the roof.

Your "Unlimited Calls" May Be Restricted to In-Plan Members.

Some "unlimited" plans are limited to calls made to other members of the same plan. AT&T's "AT&T Unlimited Plan" restricts it's "unlimited" calls to "AT&T Residential Long Distance" subscribers. If the person you're calling isn't an AT&T subscriber, your "unlimited" plan charges you 7¢ a minute. That's in addition to the fee you pay to have the "unlimited" plan.

Protect Yourself From "Unlimited" Promises.

The next time you see a plan claiming to be "unlimited", read all the fine print – it may not be as unlimited as you think. Look for the limitations mentioned above. Ask questions. Or, better yet, go to SmartPrice.com to get clear, unbiased information and comparisons.

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What's the Deal with Dial-Arounds?

Dial-around services, or "10-10 numbers" for short, are services that allow you to bypass the long distance company associated with a particular phone line. To use these long distance services, you simply dial a long distance carrier's access code (which begin with "10-10") before dialing a long distance number. Dial-around numbers have enticing advertisements, but they don't always offer a better rate. They can, in fact, offer a much worse long distance rate than you would be getting through your regular long distance company. The key to using 10-10 numbers is to know what to look for when selecting a service.

There are a few things to watch out for when reviewing 10-10 plans. First, look for information about a monthly fee for using the service. You could be charged the fee even if you use the service just once. Second, scrutinize discounts offered for longer calls. One company gives you a 50% discount if the call is 20 minutes or longer, but should you hang up at 19 minutes you are charged an exorbitant rate. Third, if it sounds too good to be true, say 99 cents for a 20 minute call, it probably is. If you place a call but get an answering machine, for example, you will still be charged 99 cents for the call, the highest per-minute rate in the industry.

Such seemingly misleading advertising has created a public outcry in recent months, prompting the FCC to begin an information investigation. You shouldn't be scared away from using these numbers, but you should investigate them carefully before using dial-arounds. Each plan has different restrictions, rules and charges, so be sure you understand them before trying them out.

The Federal Communications Commission (FCC) has published several papers and fact sheets about 10-10 numbers. When you click on each link below, a new, separate window will pop up with the related article.

• FCC and FTC (Federal Trade Commission) joint policy statement on deceptive long distance advertising
  http://www.fcc.gov/Bureaus/Miscellaneous/News_Releases/2000/nrmc0009.html
  
  
• FCC fact sheet on the advertising and marketing of dial-around and other long distance services
  http://www.fcc.gov/Bureaus/Consumer_Information/Fact_Sheets/tia_fact.html
  
  
• FCC samples of misrepresentations and deceptions found in 10-10 advertisements
  http://www.fcc.gov/Bureaus/Consumer_Information/Fact_Sheets/tia_examples.html
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The Truth About Flat Rate Long Distance Calling

It sounds like a pretty good deal. AT&T's new "AT&T Unlimited Plan" offers unlimited calls to others on the AT&T network and a 7 cents a minute rate for those not on AT&T's network for $19.95. This plan is representative of a new generation of "flat rate" calling plans from many carriers that claim to offer the consumer savings and simplify billing. Do these plans deliver on their promise? A lot of analysis is required to get at the truth.

What does the plan cost? 
That sounds simple enough; it's a $19.95 plan, right? Wrong! The $19.95 is a starting point for a list of additional charges. First on the list is a Universal Service Fund fee of 11.5%. The government requires the carriers to pay 6.9% into the fund and they may add to this fee to cover their administrative costs. AT&T has one of the highest fees in the industry and charges a whopping 67% for administration.

Next on the list is AT&T's "instate connection fee" - AT&T has declared that some states are expensive to operate in and that they'd like you to chip in to offset those expenses. Texas happens to be one of those expensive states and AT&T charges an additional $1.95 a month to its Lone Star customers. AT&T is not unique in assessing these charges but many competitive carriers don't have them. Instead they charge varying per minute rates for intrastate calls. 

If you want competitive international rates with AT&T's plan you'll have to pay an additional $2.95 a month to get them. A calling card will cost you another $1.00 a month and 25 cents a minute.

AT&T says "Because AT&T has more than 50 million customers you can be sure that many of the people you're calling are also AT&T customers." How do we arrive at the truth for this claim? The FCC publishes a document entitled Trends in Telephone Service twice a year. It is a treasure trove of telecomm related information and a very effective competitor for over the counter sleep aids. The first piece of useful information the FCC provides is AT&T's market share of 44.7% - this means that 55.3% of telecom customers use somebody other than AT&T. AT&T will be charging you 7 cents a minute plus 11.5% USF (7.8 cents per minute) to talk to those folks. Using the FCC average call and duration information along with the market share information we can estimate that an average of 61 calls of 2 minutes would be off the AT&T Network and would cost $9.52.

Finally, AT&T uses a 60 second billing increment to bill the "off net", calling card, and international call minutes. This means that charges are rounded up to the next minute e.g. if your call lasts 5 minutes and 10 seconds you will be charged for a 6 minute call. That may not sound like much but it adds up over time - in the example above the billing increment could add as much as $2.34.

Let's add it all up. Not counting the impact of the 60 second billing increment, the $ 19.95 AT&T Unlimited Plan is likely to cost $35.37.

Is it a good deal?
A good way to determine whether any telecom plan is a good deal is to compare it with alternatives. I plugged my FCC average consumer numbers into the SmartPrice.com web site to see comparisons to the AT&T Unlimited Plan. The SmartPrice.com analysis identified nine plans that out performed the AT&T plan - the best one offered a $18.68 per month savings over the AT&T Plan. Why such a big difference? The plan SmartPrice.com found has no plan charges of any kind, a 4.9 cent interstate rate and a 9.1 cent intrastate rate, and 6 second billing increment. Another big difference was a USF fee of 6.88% - a straight pass through of the government requirement with no administrative overhead. 

While the AT&T Unlimited Plan doesn't meet the needs of the average customer there may be customers for which it would be a great plan e.g. those that make a large number of calls (over 120 per month) to people who are known to be on the AT&T network. To understand any telecom plan it will be necessary to "do the numbers" and SmartPrice.com is an excellent companion for that task. 

Want to find out more about AT&T? You can find more information about AT&T by clicking here.


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