Telephone deregulation took a giant step forward on Sept. 17 when the California Public Utilities Commission agreed to open up so-called local long-distance to competition.
The move is expected to drastically reduce the cost of intrastate calling in the Golden State, but it's also indicative of a national mood that's breaking monopolistic holds on telephone markets everywhere.
While long-distance calling--interstate and international calls--were deregulated in the early 1980s, so-called Baby Bell companies have had the exclusive ability to offer telephone services within set geographic regions. That's kept the cost of county-to-county calls artificially high even while the cost of long-distance has plunged.
For consumers, this new move to deregulate is a call to arms. If you haven't already done so, now is the time to examine your calling patterns to see if you can save money by switching companies or by buying a specialized calling plan, says Jeffrey Kagan, president of Tele Choice Consulting in Atlanta. A few sage moves now may be able to save you 20% or more annually, Kagan says.
But to get the savings you have to do some homework. Telephone companies are no longer all alike. You can no longer assume it will cost you the same amount to call from point A to point B regardless of the carrier.
Indeed, three different carriers are likely to charge three different rates for calls to the same destination. And a myriad of specialized calling plans could make the telephone cacophony all the more confusing.
How do you make sense of it all?
First, realize that you're getting three things through your telephone. And if your market has deregulated local long-distance, you could be getting those three different services from three separate providers.
The three services boil down to:
* A dial tone and local calls.
* Calls of some distance, such as in-state county-to-county calls.
* Out-of-state and international calls.
Despite deregulation, you will continue to get basic service from your Baby Bell. And, in many cases, the charge for that dial tone and ability to call within your neighborhood will skyrocket. It's expected to nearly double in California.
But people who do a lot of calling will continue to find that basic-service charges amount to a small portion of their bill. Their biggest expenses are per-call charges, and these could vary dramatically in this new age of deregulation.
Here's where the work comes in. If you spend upward of $25 a month on local long-distance, you should pull together three months' worth of phone bills, says Dave Morse, manager for the Los Angeles residence market at Pacific Bell.
(If you spend less than that, a 10% savings would save you less than $30 annually--probably not worth your effort. Additionally, phone companies are expected to compete more heavily for heavy phone users, so those who have lower monthly bills are likely to be offered fewer money-saving options.)
Now, either pull out several different colored pencils to highlight frequently called numbers and area codes, or get a notebook where you can write down the toll calls you make frequently. Use different colors (or pages) to highlight the various areas called.
Next scan your bill for calling hours. Most people either make most of their toll calls at night and on weekends, or they make those calls during the day. You need to determine whether you're a daytime, nighttime or indiscriminate caller, because certain calling plans are geared toward the hours you call most.
Finally, you need to get a rough estimate of duration of your calls to each toll area. You don't need to tally up exactly how many minutes you're on the phone to a specific number, but you'd be wise to note--in rounded figures--how many hours you spend on the phone to each area code or toll prefix. (The prefix is the first three digits of a phone number, after the area code.)
Armed with these three bits of information, you're prepared to start shopping for phone services.
Call the companies that currently provide service to your area and ask them what they'd charge you for your frequently made phone calls. For the moment, that's just your local phone company in California. But all the major carriers, including AT&T;, Sprint and MCI, are expected to file rates with the Public Utilities Commission within the next two months. When you get rates, also ask whether the company offers special calling plans, such as Wide Area Telephone Service lines that would make sense for you.
It's also wise to try to make a rough comparison of quality. In many cases, the quality of personal services provided by the various phone companies is roughly the same, but occasionally one provider could be particularly helpful--or unusually bad.
It doesn't make sense to save $10 or $20 by choosing the cheapest carrier if that choice is going to cost you hours of frustration dealing with uncooperative consumer service representatives or phone lines filled with static.