Saving Money on Phone Service

A lot has changed since 1984 when Ma Bell lost her monopoloy on the telephone communications industry. There was a time when you leased your phone from Ma Bell, you did business with Ma Bell or no one, and you paid Ma Bell's rates, or else.

No more. The stately mistress is still alive, but she has given birth to dozens of sons and daughters -- little "Bells" are still springing up all across our land. This has one important ramification for Americans: choice.

But not all of Ma's kids were created equal. The old capitalist slogan "buyer beware!" applies as much to the telephone communications industry today as it has to any other.

The safe thing to do is to stick with Ma. Old faithful AT&T is still going strong, though she no longer monopolizes the market. Two others have earned the nation's respect and grown large enough that folks now speak of the "Big Three." It's "safe" to stick with the "Big Three."

However, it's also expensive. The "Big Three" are where they are not so much as a result of the services they provide but because of the millions of marketing dollars that have lead them along. Television, print, and radio advertising have built these companies' images and earned for them the respect and trust of the American public.

But those millions in advertising dollars come from somewhere. No federal or humanitarian grant pays for the "Big Three" public relations machines. That money comes straight out of the telephone service rates they charge.

This fact gives another meaning to the term the "Big Three." Not only are they the three largest, but they are the three most expensive.

For instance, one of these companies charges you 33 cents per minute every time you use their calling card. Plus, they charge you an additional 85 cents just for connecting the call. If you shop around, you'll find cards for less than half the rate with no surcharge. That's why Money Magazine said, in its September 3, 1995, edition, "If you're using a calling card from any of the big three you're being ripped off!"

"But what about the quality of the network?" Someone objects. "Aren't fiberoptics important?"

"Yes," is the answer. However, the "Big Three" lease the same networks as any little "new kid on the block" long-distance company. The "Big Three" don't all run their own separate cables to every house in America. In fact, there are some long- distance service companies these days that don't own a single inch of cable anywhere -- they just lease large chunks of network capacity at low prices and resell that calling time to their customers at substantially lower rates, sometimes without even requiring that the customer change his or her long-distance carrier!

I became particularly interested in long-distance companies when I was introduced to a low-priced calling card. I sat down with my phone bill from the previous month and discovered that my local phone company was charging me 32 cents a minute for direct-dialed in-state long-distance, plus a 20-cent per call surcharge! If I had made all of those calls on the calling card, I would have saved $40 that one month. That's almost $500 in a year! This sparked my interest in long-distance companies.

Then what's the difference between companies? Looking beyond the size of their marketing budgets, there are three main characteristics to consider when choosing a long-distance company:

1. Customer Service. Customer service for the "Big Three" is good -- real good. You pay top dollar for top service. However, many of the smaller "bells" have great customer service, too. When considering a long-distance service, make sure you have a customer service phone number you can call. If you know of other folks who are customers of the company, ask them how good their service is. MLM suppliers often suffer here.
   
   
2. Longevity and Stability. How long has the company been in business? Are they financially stable? Are they reputable? The "Big Three" excel here. MLM companies often suffer here.
   
   
3. Rates. This is where the smaller companies have the greatest advantage over the "Big Three." Smaller companies with smaller marketing budgets and fewer highly-paid executives and less- expensive sales methods. MLM long-distance companies often do well here, but I've shied away from them for the two reasons above.

When evaluating rates, don't neglect to include surcharges and monthly fees. When I wanted a personal 1-800/888 number so that kids from my Sunday School bus route could call me toll-free, I narrowed my prospects down to two companies. I actually chose one that charged 2 cents-per-minute more, which sounds crazy. However, the lower-priced company charged a monthly service fee, and when I figured out how many hours of calls I'd have to have to make up for the 2 cents-per-minute difference, my choice was clear!

Also pay attention to billing units. The "Big Three" all charge in one-minute increments, rounding your call UP to the nearest minute. However, there are many other services available that bill in six-second increments, which can amount to significant money over the course of a month.

Shop around. It'll be worth every minute you put into it. Lower phone rates can save you a substantial amount of money. Don't be afraid to experiment a little by using one company for a couple months, then switching to another and comparing your bills, their rates, and their service.

Once you find just the right company for you, you can enjoy premium service while stretching those dollars as far as they'll go!

Ron Meldrum works full-time doing web site development for a private liberal arts college, plus works from his home in Greene, Maine, doing web site development and hosting and selling discount commercial and residential telecommunications services. Royal River WebWorks and Telecommunications http://www.royalriver.net/telecom/

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