Long Distance 101

There are many choices with long distance telephone service. Are you paying more than you should for long distance? Read on to find out more.

So, you're ready to investigate a new long-distance plan You are no longer limited to the traditional landline telephone service — you can make your long distance calls over the Internet using Voice Over Internet Protocol (VOIP) or you can use a cell phone. No matter which technology you use, there are many different monthly service plans as well as pay-per-call and pre-pay options. Well, the good news is that long distance rates are a fraction of what they were 50 years ago. Here's some advice on selecting long distance service.

Old Choices, New Choices

Before the U.S. government ordered the breakup of the AT&T Bell Telephone monopoly in 1984, the average consumer had one option for long-distance telephone service: the local Bell System phone company. Today you can choose to have long-distance service from any of dozens of telephone service providers. You are no longer limited to having to have a landline telephone in order to make long-distance calls. (A landline phone means that your calls are carried over copper wire or fiber optic cable, as opposed to airwaves for cellular phones or coaxial cable for television service.) Here are some of your new options for landline and other means of long-distance telephone communications:

10-10 Dial Around – The term 10-10 calling refers to dialing 1010 plus a 3-digit code before making a long-distance telephone connection. It is a way of selecting a long-distance carrier with a landline account. The 10-10 carrier bills you on your monthly phone bill. The rates for dial-around calls are much lower than if your telephone service provider charged random rates, which are not associated with a calling plan. For an explanation, see the Ohio Consumers' Counsel article Understanding Dial-Around Long-Distance Services.

VOIP – Voice Over Internet Protocol is a way to make telephone calls over broadband Internet connections. There are many companies competing for a share of the VOIP market, and the price of unlimited long-distance service is usually $35 or less per month. Some companies offer rates of less than $15 per month, with a limited number of minutes included. See the U.S. Federal Communications Commission FCC VOIP factsheet for an explanation of VOIP telephone service, and the ConsumerSearch.com VOIP reviews.

Cell Phones – If you have a cell phone with a monthly service plan, long-distance calls are usually included in your calling time allotment. Most cell phone plans offer night and weekend calling free. Whether this is the best way to make your long-distance calls would depend on your calling patterns. First, do you have a cell phone with a monthly plan? And if so, will you be able to make most of your long-distance calls outside of daytime business hours?

Calling Cards – Prepaid telephone calling cards can be found in grocery stores and retail stores. Usually, you dial a toll-free number and then enter an access code before you dial the number you are trying to connect with. Prepaid phone cards offer a low per-minute rate, but there are usually various fees in addition to the per-minute rate. Calling cards can be a very good option, especially if your calling patterns include international calls to relatives and friends. There are calling cards with very low rates tailored to specific countries. Calling cards are also a good choice for making long-distance calls on landline phone accounts other than your own (public payphones, phones you use when traveling, or phones at your workplace). For more information about calling cards, see the related articles in the CareOne Credit Knowledge Center Library.

Which Is Best?

Choosing the most economical way to make your long-distance calls requires analyzing your telephone calling habits and needs. Understanding your calling patterns is important in this decision, and you need to research the prices and offers from the various long-distance providers.

Take into consideration:

• Added Services: Besides figuring out which type of plan best suits your needs, you should also consider extra services, such as personal 800 numbers, calling cards, and special promotions like frequent flyer miles. Remember, if you don't think you'll use them, there is no point in paying for them.

• IntraLATA Calls: Check out who covers your intraLATA calls. These calls may also be labeled "local toll calls." These are calls that are outside your local calling area, but not far enough away to be considered long distance. In the past, local phone companies handled these calls. Now, you can choose a company to cover your local toll calls.

• Telephone Slamming: Watch out for telephone slamming. This is when long-distance companies switch your service over to their service without notifying you. The FCC requires long-distance companies to obtain a customer's permission to switch service over. If you get slammed, you do not have to pay your new bill provided you take action through the FCC within 30 days. For more about scamming and other types of fraud, read the National Fraud Information Center articleTips on Telephone Service Scams.

• Additional Charges: Know what your provider charges for additional services. Directory assistance charges can range from $.99 per call to $2.50 per call, depending on what phone number you use and who your provider is. So know what your company charges and which number you should use.

• Your long-distance company can help determine the best calling plan for you based on your calling history. If you call them, they can bring up your previous bills and tell you what your best option is. Remember, though, they will only tell you which one of their plans is best for you. Make sure you compare plans from other carriers.

For more help on shopping for long distance, look at the Texas Public Utility Commission tipsheet 20 Questions to Ask About Your Long Distance Rates.

Have more questions? See the related articles in the CareOne Credit Knowledge Center Library.

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• Ten Ways to Cut Your Cellular Phone Bill – The convenience of cell phones makes it that much easier to rack up the costs with every phone call. You can reduce your monthly cost significantly by making only calls that really need to be made over the phone and being conscious of how much time you spend on that call. Checking your voicemail with a landline, saving tidbit discussions for the dinner table, and turning your phone off over "I'll call you back" discussions also add up--in savings.

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