Be Savvy on the Dial
The battle for long-distance phone customers has been joined. MCI WorldCom and Sprint Corp. picked the fight some weeks back with a nickel-a-minute rate in off-peak hours. AT&T;, the dominant power in this market, responded with a seven-cent rate for all-day service. The fine print makes both deals somewhat less of a bargain. Many consumers will benefit from the price war among the long-distance giants. But just as many will not, and it is up to consumers to decide what is right for themselves.
The proliferation of special deals by long-distance phone companies is a sign that competition for residential customers is heating up, fueled by new mobile and cable technologies and government regulators’ pressure for more equitable pricing of phone services. With one marketing blitz after another, customers are being lured in bold print to sign up for bargains that often seem too good to be true. And they may well be.
Take AT&T;’s just announced “One Rate 7 Cents.” It comes with a $5.95 monthly fee, or $4.95 for those subscribing to AT&T; for local toll calls as well. A consumer whose long-distance bill is more than $25 a month and who makes a fair number of calls during the peak hours will benefit. All others will be better off with MCI’s rates or AT&T;’s own current long-distance service, which costs $4.95 a month plus five cents a minute in off-peak hours and a dime during daytime.
MCI’s five-cent rate in off-peak hours comes with a $5 monthly fee and one of today’s highest daytime long-distance rates, 25 cents per minute.
Rates have also come down considerably for some dial-around, or 10-10, services offered by long-distance companies. But here too consumers should understand the terms of the services before they use them. A 99-cent rate for up to 20 minutes sounds like a bargain, and it is, on calls lasting that long. But paying 99 cents only to speak to someone’s answering machine may not be.
The Federal Communications Commission calls this “competition at its best” and attributes the rate cuts to recent reductions in fees that local phone companies, the Baby Bells, charge long-distance carriers for the use of the local networks. That is only half the story. While the access fees have come down and are being passed on to the consumers, the local phone companies have made up for some of the shortfall by jacking up usage charges to their customers.
Clearly, the fast-changing world of telecommunications is bringing better services, some lower prices--and greater complexity. It is incumbent on the phone companies to disclose the details of their offers in clear language that all consumers can understand and on consumers themselves to keep informed.
