Released: December 11, 2002

2002-2003 Long Distance Survey

Contact: Linda Sherry or Ken McEldowney, (415) 777-9648

New long distance survey finds sharp increases in basic rates, calling card calls and collect calls

Wednesday, Dec. 11, 2002 - Major carriers’ interstate long distance basic rates have risen steeply, according to the latest Consumer Action Long Distance Rates Survey of 21 carriers and 47 discount calling plans. The survey, released today, appears in the December issue of the San Francisco-based national non-profit education and advocacy organization’s newsletter, CA News.

Basic rates, the highest rates paid by customers not on a calling plan, jumped 17.5% in one year at the Big Three carriers (AT&T, MCI and Sprint). Basic rates at the Big Three rose to a high of 35¢ per minute for weekday, daytime calls. But the group found that Big Three customers can save up to 72% off basic rates by having a calling plan.

Using the same calling basket of 126 minutes of interstate calls it has tracked for 17 years, Consumer Action found that AT&T customers could save between $21.93-$25.20 per month, MCI customers between $13.80-$18.91 and Sprint customers $12.15-$24.88 just by enrolling in one of their calling plans.

Consumer Action Executive Director Ken McEldowney said that long distance consumers have to be on the offensive nowadays. "Because of changes in federal telecommunications law, companies can change their rates and fees at any time without notifying customers directly," McEldowney pointed out. "It’s up to the consumer to stay on top of these changes by watching their bills closely."

Of the 47 state-to-state long distance calling plans surveyed, 31 (or 66%) had monthly fees, 11 (or 23%) had no fee and 5 (or 11%) had monthly minimum spending requirements. Monthly fees ranged from 75¢ (Big Zoo) to $59.99 (MCI’s Neighborhood Complete). Minimum spending requirements ranged from $5 to $10. Calling plan rates ranged from 2.5¢ to 11.5¢ per minute.

Consumer Action found a new twist in calling plans that allow you unlimited calls in return for a set monthly fee. "Unlimited plans are a new concept to hit the market since we last surveyed long distance rates," noted Linda Sherry, who conducted the survey. "Two plans like this showed up. AT&T has a plan that allows you unlimited minutes when talking to other AT&T customers, while you pay 7¢ per minute for calls to other people. MCI’s Neighborhood Complete is a package of phone services that includes unlimited state-to-state long distance as well as local phone service and other optional services such as call waiting. Both have hefty monthly fees."

Consumer Action also found large increases for:

- Calling card calls: The cost of placing a 10-minute weekday, daytime calling card call from Chicago to Los Angeles, using each company’s own card and access number, jumped 30% to $11.40 using MCI, 26.8% to $10.15 using Sprint and 42.8% to $5 for Verizon. AT&T’s charge for carrying the call ($10.15) is unchanged since last year, as is SBC’s ($4.25).

The cost of these calls includes the per-call surcharge: this year, MCI’s surcharge rose from $1.25 per call to $1.50 and Sprint’s from 99¢ to $1.25. Surcharges levied by AT&T ($1.25) and SBC (75¢) remained the same. Verizon reports that it does not have a per-call surcharge on calling card calls.

- Collect calls: The cost of a 10-minute, daytime collect call from Chicago to Los Angeles using Big Three toll-free collect call access numbers shot up 52% across the board since last year. All three companies charged the same rate and implemented the same increase—from $8.49 to $12.89.

The cost for this collect call when you ask the operator to help is even higher: $15.40 for AT&T; $16.44 for MCI and $14.40 for Sprint. The cost of an operator-assisted collect call has remained steady for AT&T and Sprint—MCI increased its cost 18% since a year ago.

- Directory assistance: In one year, the cost of asking for directory assistance by dialing the area code plus 555-1212 jumped 25% to $2.49 for MCI and Sprint customers. SBC customers, now paying $1.40 per call, have seen a whopping 47% increase. AT&T ($1.99) and Verizon ($1.25) remain the same.

Consumer Action also discovered an international calling trap that could double, even triple the cost of overseas calls. If the number you are calling belongs to a cell phone, the Big Three and many other companies add a per-minute "international mobile termination charge" to their rates.

In a worst case scenario, AT&T and Sprint customers using a discount international calling plan with rates of 9¢ per minute to the United Kingdom would end up paying 31¢ per minute if calling a cell phone because of the 22¢ per-minute surcharge added by both companies.

Sherry noted that most people are used to the notion that when calling a cell phone, the cell phone’s owner pays for the call. "This isn’t true everywhere overseas," she noted, "which makes this a costly trap for the unwary."

To assist consumers in shopping for long distance service, Consumer Action compiles a chart of the lowest per-minute plan rates. This year’s chart features six online plans with interstate rates of 4.5¢ to 9¢ per minute. Internet sign-up and automatic credit card billing usually are required for online calling plans.