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The Phone Handbook

Long Distance

Which Long Distance Company Is The Best Company?

People often ask the Attorney General’s Office which long distance company they should choose. Although we cannot recommend a particular carrier to you, we can give you some information to make your choice easier. Not only are there several companies from which to choose, there are different calling methods to pick from as well. To make long distance calls from home, you can subscribe to a long distance telephone company or use an alternative method as described in this chapter. Also, many telephone companies package or “bundle” services together. These bundles often include long distance. Therefore, you may have long distance service from your local telephone company and not even know it. The Minnesota Department of Commerce now lists all long distance carriers on its website. You may search the Department of Commerce’s website for a list of local and long distance telephone service providers in your area by clicking here.external link icon )You may also contact the Department of Commerce’s Telecommunications Division by telephone at 651-539-1883 or by email at telecom.commerce@state.mn.us.

Do I Have to Sign Up With a Long Distance Carrier?

Joining a long distance company is entirely optional. In many ways a long distance membership can be compared to a health club membership. If you make good use of a health club membership it can be an extraordinary value. If you never make it to the gym, however, it becomes a waste of money to maintain your membership. If you do not make long distance calls or if you simply do not wish to have a long distance company, you can cancel the service at any time. In doing so, you can still make long distance calls. You will just have to use a different method of dialing if you need to make a long distance call. Canceling will probably cost you a one-time fee that is charged by your local telephone company as an administrative cost. Thereafter, you will not be billed for long distance usage fees, minimum monthly fees, or universal service charges if you have no usage.

You may wish to verify your long distance carrier by dialing “00” from your home telephone simply as a precaution. If you wish to make any changes to your long distance service, call your local telephone company. You can also ask the local telephone representative to tell you about its free consumer protection features such as a “PIC freeze” or any third-party billing blocking service that may prevent future problems. Basic protections should be free, so use caution before signing up for expensive enhanced protection services.

A Long Distance “Subscription”

If you subscribe to a long distance carrier, they will carry the calls made from your home phone when you dial 1+ the phone number. In Minnesota, you need to choose a long distance company for two types of calling: one for intra-LATA calling and one for inter-LATA calling. Your intra-LATA company handles long distance calls within your local toll calling area. Your inter-LATA company handles long distance calls outside your local toll calling area including in-state, state-to-state and international calling. Most companies carry both types of calls. Your local telephone company and the Minnesota Department of Commerce can tell you which companies offer these services in your area, and provide contact information for the companies. You may be surprised to learn there are over 200 companies offering long distance service in Minnesota!

How Can I Choose the Best Company?

Do you call mostly within Minnesota? Do you call all across the country? Do you call internationally? What time of day do you make most of your calls? Do you typically make very short or very long calls?

To do your best bargain shopping, you need to be aware of your typical calling activity and other needs. A telephone company can best match a plan to your needs if you explain your distinctive calling habits. Most long distance carriers offer calling plans, like “Unlimited Nationwide Calling” or 1,000 minutes of long distance calls, that cost more per month, but do not include a per-minute fee (unless you go over a cap.) These special plans can be a good deal, but make sure they apply to the type of calls you are likely to make. Other advertised deals may only apply if you “bundle” long distance with other services provided by the company, such as high-speed internet service. In these cases, you may be getting a deal on telephone service, but paying more overall by adding these other services. Other deals usually apply only to calls made outside of our state. Most of the time you will pay more for calls made within Minnesota.

Combined Billing or Not?

Long distance companies are currently moving toward direct billing of their customers rather than combining their bill with the customers local telephone bill. Recently, many long distance companies have begun to add a charge for billing their services on your local telephone bill. You may be willing to pay a fee for the convenience of writing only one check to cover local and long distance telephone service. Direct billing, on the other hand, can mean less confusion on your local telephone bill and more accountability by your long distance company.

Hidden Fees: A Word of Caution…

When dealing with long distance carriers, make sure you understand all the rates, time of day restrictions, and limits of any promotional offers. Do not focus only on the per-minute price, but make sure to take into account monthly service fees and other charges that could be applied to your account. Minnesota law requires long distance companies to tell you their rates when they are selling their service. They are also required to send you a printed price list when you start service. Be wary of a telemarketer’s price quote that sounds too good to be true. Many people report that they did not receive the rates they were quoted over the phone and are unable to remedy the situation. If you opt to switch service over the telephone, it is prudent to wait for the printed material to arrive before you make a large number of calls.

What are the Added Fees and Surcharges on My Long Distance Bill?

Make sure you understand all the rates, time of day restrictions, and limits of any promotional offers made by telephone companies. Many long distance companies have added “pass through fees” and “minimum monthly fees” to their customers’ bills. Your telephone company may or may not be willing to negotiate these charges, but do not be fooled into believing they are merely a “tax.” Most of these line-item charges are collected at the discretion of the long distance company, and the money stays with the company. If you do not like the price of your calling plan coupled with the fees and surcharges, your best course of action is to shop around for a better fit.

"Minimum Usage Fees" These fees are becoming increasingly common and range from as little as 30 cents to more than $7 per month. These are fees you pay whether or not you make any calls. Remember to consider this monthly fee when figuring out your average per-minute usage charge. It can make an enormous difference for low volume long distance users.

"Universal Connectivity Fee or Universal Service Fee" This charge is passed along from your long distance company to you to pay for an FCC program that helps pay for telephone and Internet services to libraries, schools, hospitals, and rural areas. The fund also helps assist low-income consumers with initiation costs and monthly fees associated with local telephone service. The amount that long distance companies charge varies considerably. Some companies charge a fixed monthly charge while others assess this charge as a percentage of your bill.

"In-State Recovery Fee/Intrastate Access Recovery Charge" Some companies impose a charge like this to recover amounts they pay your local phone company to carry your in-state long distance and local toll calls over its lines. These fees are generally around $1.95. These charges are not required by the government.

"Carrier Cost Recovery Charge" This fee helps recover costs for providing long distance service including expenses for regulatory fees, programs and compliance, connection and account servicing. This fee is not a tax or charge required by the government.

"Bill Statement Fee" Some long distance companies assess a charge for putting your long distance charges on your local telephone bill, receiving duplicate bills, or even receiving paper copies of your bill.

Alternative Methods for Making Long Distance Calls

There are ways to make long distance calls without joining a long distance company. The three most common methods are buying a prepaid calling card, using a 10-10 XXX dial around code, or contracting for a cellular phone.

Prepaid Calling Cards

One alternative is to use a prepaid calling card, which works like a debit card and is sold in retail stores or even in vending machines. Their rates can be very low—the company saves a lot of money by not generating a bill for their customers. You dial a toll-free (1-800, etc.) access number, punch in a code, and then the meter runs until the minutes are used.

Some people complain that there are too many numbers to dial, but others believe the low rates and low hassle are worth it. Buy prepaid cards from long distance companies and retail outlets that you trust. Start-up phone companies have been known to fold before consumers have used all of their prepaid minutes. Before you purchase a card, make sure you read and understand all its terms and conditions, which may hold hidden charges or expiration periods. It may also be possible for the price of the service to change at any time, so you may wish to check on the rate periodically before adding additional minutes.

Dial Around

Dial around access codes let you use the 10-10 (or 101) prefix to bypass your regular long distance carrier and purchase calls one at a time from your home phone. You can ask any long distance carriers for information about dial around services that they offer as most of them have a code. Many companies advertise 10-10 numbers through TV ads.

Can I Save Money Using 10-10 Companies?

Most of the nationally advertised 10-10 companies are owned and operated by the major long distance companies. For example, MCI owns Telecom USA (10-10-321 and 10-10-220) and Excel owns DimeLine (10-10-811). Since it is hard to identify the actual name of a 10-10 company, finding a toll-free customer service number can be very difficult, but every dial around company has one. You can also ask any long distance carriers for information about dial around services that they offer as most of them have a code.

Ask the company to send you a printed price list before you start experimenting with the company’s service. If you cannot contact a company to ask questions before you use their service, you should be concerned about how you will get help if there is a problem after you have been charged.

Most dial around companies charge consumers a monthly service charge and other fees that reduce any per-minute savings. Several 10-10 companies add a Universal Service Fund (USF) fee to the bill as well. Be aware that your regular long distance company may already be charging you this fee, so you could end up paying twice. Also, pay attention to minimum call times when choosing a 10-10 company. Some calling programs have a three-minute minimum or a 50-cent connection fee. Some programs offer a low, flat rate for “Up to 20 Minutes,” but that same flat rate applies even if you reach an answering machine or only talk for one minute. If you cannot use the full time, a seemingly good deal can turn into a costly call!

While 10-10 services are still available, they are significantly higher priced and less commonly used than when they were first offered and heavily advertised in the late 1990s and early 2000s. Current rates are generally around 20 cents per minute.

Wireless (or Cellular) Phones for Long Distance

Many customers are choosing to use their wireless phones to make long distance calls. If you have a contract that includes long distance calls as part of your fee, this could be an economical way to call long distance. Wireless service is discussed at greater length in the section titled Making Calls Away from Home.

Voice Over Internet Services

Some callers use Internet-based services, many of which are free of charge, to place long distance and international calls. Often the sound quality is good; sometimes it is not. Many services include not only voice but also video, so the callers can see, for example, the new baby! Many other services may be available, such as call forwarding, remote call management, text messaging, and more.