Phone madness

Picking a long-distance carrier looks to get more bewildering

By Clint Swett -- Bee Staff Writer - (Published January 5, 2003)

As a certified public accountant, Suzanne Chapel has a noggin for numbers. But even she gets frustrated trying to figure out the best long-distance carrier for her family.

"It's impossible to stay on top of it," said the Grass Valley resident, who estimates she's had five different long-distance plans in as many years. "You never feel like you are getting the best deal because there are so many out there."

There are some 2,000 companies registered to sell long distance in California, and things are likely to get even more bewildering in the coming weeks as SBC Communications Inc. begins blitzing Californians with offers for its new long-distance service.

Last Monday, state regulators gave SBC (formerly SBC Pacific Bell) the green light to sell long-distance service in competition with AT&T, MCI and a host of other providers.

SBC is expected to begin an all-out marketing barrage this week. But before they sign up with any carrier, consumers should rev up their calculators to make some careful comparisons, experts say.

"People need to be savvy," said Linda Sherry, a spokeswoman for Consumer Action, a national consumer advocacy group in San Francisco.

And there's plenty to be savvy about. As the telecommunications industry struggles under the burden of anemic earnings, accounting scandals and even bankruptcy, many carriers are quietly raising their rates and fees.

That makes it even more important for cost-conscious consumers to be vigilant. "Given the times we're living in, it's not a bad idea to have a good idea about what we're spending," Sherry said.

Not only must consumers sift among scores of long-distance companies, they also need to research prices for out-of-state calls, as well as calls within California.

Further muddying the waters, many of those companies have multiple plans.

In addition to plain-vanilla per-minute charges, most major carriers offer plans that levy a monthly fee in exchange for lower per-minute costs.

However, those plans may be a bargain only for people who make a lot of long-distance calls. For instance, AT&T offers calls for 7 cents a minute if the user pays a $4.95 monthly fee. It also offers another long-distance plan in which users pay 10 cents a minute with no fee.

To benefit from the 7-cent plan, however, a consumer would need to make more than 165 minutes, or nearly three hours, of long-distance calls a month.

SBC is offering 7 cents a minute with no monthly fee, but only if the customer also subscribes to three custom calling features such as caller ID.

Some companies offer bundles of minutes for a flat rate. While those rates might seem very attractive (as part of a package plan, SBC offers 500 minutes for $10, which works out to 2 cents a minute), it's much less of a bargain if customers don't use their full allotment of monthly minutes.

And those exceeding their allotted minutes get socked with much higher fees for additional long-distance minutes, warned long-distance analyst Rich Sayers, who runs a Web site called www.10-10PhoneRates.com.

Other package deals to scrutinize carefully are those for international calls, such as SBC's 300 minutes to Mexico for $60 a month.

At 20 cents a minute, it's not a bad deal, but those who make fewer than five hours of calls in a month are still on the hook for the full $60.

Sayers' Web site promotes so-called "dial-around" long distance. Rather than dialing "one" and then the phone number, those using dial-around typically dial 10-10 plus a three-digit number, then a regular phone number. They will automatically be billed by the dial-around company they choose, often at rates considerably lower than most conventional long-distance companies.

But in addition to being clunky to use because of the extra digits, dial-around can be confusing in its own right. Under some plans, people are billed a flat amount for the first 20 minutes of talk time, and then billed at a different rate.

Such rate plans can make it difficult to draw meaningful comparisons with competing carriers.

Another option is to choose from a number of off-brand carriers like Everdial, which often charge less than half of what the big players do.

Since those smaller players buy their long-distance wholesale from big companies like MCI and then resell it to the public, there's no difference in quality, said Sherry of Consumer Action.

But a few smaller companies have gained a reputation for poor customer service in billing disputes, so it helps to research consumer complaints before choosing a carrier.

Finally, an increasingly popular option is to make long-distance calls using the "free" minutes available on cellular phone plans. Under many plans, especially those offered by long-distance companies such as Sprint PCS and AT&T Wireless, there's no additional charge for long-distance calls.

While wireless phone reception can be iffy in some neighborhoods, the fact that it's already included in a cell-phone plan makes it an attractive proposition.

The most important thing is to know your own calling patterns, Sherry said. Sit down with a couple of phone bills and chart if most of your calls are within the state or to another state, what time of day you call and how long you talk. Armed with that information, it will be much easier to find a service that provides the best value for you.

For some people, however, changing plans might be too daunting. "I might have done it when I was younger," said Betty Keeler, a retired Carmichael resident. "But it can be so confusing. It's just not worth the effort."