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The purpose of this page is to demystify the long distance selection process, enlightening you to the many marketing techniques employed by the major service providers.   Of course, it is also our belief that the more informed you are, the more likely you are to choose our services!  Should you need a term defined, please visit our telecommunications glossary. How To Choose Your Long Distance Service Wisely Most people choose their long distance service based solely on the interstate rate that is advertised.  However, there are many other factors that affect the cost of their monthly long distance bill that are being ignored.  Click on the factors below for a detailed explanation of how they can affect your monthly long distance bill.  Usage pattern Flat rate vs variable rate Interstate rate Intrastate rate International rates Monthly fee Minimum usage Billing increment PICC fee USF fee Usage Pattern This is the single most important factor which affects your choice of a long distance service.  The term "usage pattern" refers to; 1) When you place calls (time and day) 2) Average number of call minutes per month for:    a) Interstate calls    b) Intrastate calls    c) International calls (per country) 3) Duration of your calls The reason this is such an important factor is that each long distance service provider makes an assumption on a typical user's usage pattern, then designs their marketing campaign and pricing strategy around that assumption.  Armed with your particular usage pattern, you will be able to choose a service that best serves your interest.  For a simplistic example, if the bulk of calls you make are intrastate calls, then you should choose a carrier which provides a favorable intrastate rate for your state, even if their interstate rate is not as low as other services under consideration.  Of course, if it were all that simple, there would be no need to discuss the other topics on this page, so please read on to discover the other factors that determine your final phone bill! Top Flat rate vs variable rate The term "flat rate" refers to a single per minute rate (anytime, any day) for calls made to a particular set of destinations with no usage restrictions.  Normally, the "set of destinations" refers to interstate calls (calls made to any of the 48 continental states other than your own).  Also note that there are no usage restrictions in our definition.  If you have to talk 10 minutes before receiving a "flat rate", you're getting a variable rate!  Likewise, beware of the "up to 20 minutes for $.99" marketing ads.  While this seems to be a rate of 5 cents a minute, read the fine print to make sure that a 1 minute phone call doesn't cost $.99! There are many versions of variable rates, but the most common variable rates vary depending on: 1) Time-of-day and/or day of week 2) Monthly usage or per call usage 3) Location of call origination and destination You are probably familiar with rates that change depending on the time of day or the day of the week.  Providers offer these plans to encourage users to make calls at times when their systems are lightly loaded and otherwise idle.  If a large percentage of your calls are made on these offpeak hours/days, then this type of variable rate could be advantageous. While less common, some providers also offer plans that encourage users to make longer duration calls by reducing their rates after a certain call duration.  For this type of service to be advantageous, you need to be reasonably sure that all your calls are long-duration calls (no answering machines!).  Also in this category are rates that go down after a certain monthly usage is attained. A newer type of variable rate plan to discuss are those that attempt to charge a true cost of service based on the actual locations of the calling and destination parties.  We won't go into the technical reasons here, but each combination of area code and local exchange (at both calling and destination ends) has its own long distance access cost associated with it.  These services dynamically adjust their rates based on these factors.  In other words, if you happen to live in a low cost area and a large portion of your calls are made to other low cost areas, then these types of services could benefit you.  However, deciphering your phone bill to make sure you are being charged the proper rates could be difficult! As you can see, there is no simple answer to the question of "Which is better, flat rate or variable rate?".  Both types of service have their advantages and disadvantages.  The answer is an individual one, based on your particular usage pattern.  Top Interstate Rate This is normally the advertised rate, but always check the fine print to make sure.  This refers to the per minute rate which is charged to make calls to the 48 continental states other than your own.  Calls to/from Alaska and Hawaii are normally charged at a different rate.  Sometimes the rates for calls to Alaska, Hawaii, Puerto Rico, Virgin Islands, etc. are listed under "International Rates" and sometimes they are listed separately.  You need to read the fine print! Top Intrastate Rate This is the per minute rate at which long distance calls within your particular state are charged.  For example, if you live in New York City and call Buffalo, you would be charged at the intrastate rate for New York.  Each state is charged at a different rate and these rates are normally published in the form of an alphabetical listing by state.  If most of your long distance calls are within your own state, it is to your advantage to find a service that offers a low intrastate rate for your state. Top International Rates This refers to the per minute rates that are charged to make a call from any one of the 48 continental states (excluding Alaska and Hawaii) to other countries.  Each destination country is charged at a different rate and these rates are normally published in the form of an alphabetical listing by country name.  If you make international calls, it is very important to consider the rates charged to the countries that you most frequently call.  These rates often vary widely between service providers and can serve as a way to recover revenue from their discounted domestic services.  As a general rule, rates of calls to developed countries are lower than to third world countries, and the difference is often astonishing. Top Monthly Fee This refers to the monthly fee that is charged to your account for the "privilage" of using the provider's service.  These fees vary widely and some services waive their fee if a certain minimum usage is attained.  Better still, some services don't charge any monthly fee.  Your amount of usage will determine the monthly fee that you are willing to tolerate.  Note that you will often need to read the fine print to even find the monthly fee in a service provider's advertising. Top Minimum Usage Fees These are fees that are charged on either a per call basis or a monthly basis.  As for per call minimum usage fees, some services who have 6 second or 1 second billing increments enforce a minimum duration call of either 30 seconds or 1 minute.  By the definition of standard one minute billing increment services, the minimum duration of a call is one minute.  Of course, some providers have taken this to another level entirely by advertising "up to 20 minutes for $.99", which basically is enforcing a minimum call duration of 20 minutes!  In other words, a 1 minute call also costs $.99! Monthly minimum usage fees guarantees the service provider of a set minimum income from your account.  For example, if the monthly usage fee is $5.00 and you don't make any calls, you will still pay as if you had a total of $5.00 usage.  However, if you had $10.00 of actual usage, you would only pay for your actual usage of $10.00. Top Billing Increment Sometimes advertised as "Incremental Billing", this refers to the granularity in time that each call is metered.  This is best illustrated with an example.  Let's compare a 1 minute and 10 second call over two services which both offer 10 cent per minute rates.  Service A has standard one minute billing increments and service B has 6 second billing increments.  Service A would charge 20 cents for the call while service B would charge 12 cents for the call.  Note that the practical difference between 1 second billing and 6 second billing is minimal.  This is because any savings you might get is rounded up to the next penny.  If you make short duration calls, don't underestimate the value of 6 second (or 1 second) billing increments over the standard one minute billing increments! Top PICC Fee The Presubscribed Interexchange Carrier Charge (PICC) is a charge that long distance companies pay to local telephone companies to help them recover the costs of providing the "local loop".  These fees are capped by the FCC at the following levels: Residential  $1.04/mo  $2.53/mo for each additional line Single Line Business $1.04/month Multi Line Business  $4.51/month per line Service providers are paying these fees to the local loop provider.  However, there may or may not be a charge that shows up on your phone bill depending on the marketing and pricing strategy of the service provider.  If it is not on your bill, you are paying in a different way, perhaps via a higher interstate rate. Top USF Fee The Universal Service Fund (USF) is a charge that is paid to the government to allow schools, libraries, and rural health care providers access to discounted services.  Service providers are paying these fees, however, there may or may not be a charge that shows up on your phone bill depending on the marketing and pricing strategy of the service provider.  If it is not on your bill, you are paying in a different way, perhaps via a higher interstate rate. Top Proudly Offered By: LongDistanceSmart.Com Free Long Distance Analysis!! to be notified when our rates go down! (OPEX, PNG, Capsule, Unitel, and others!) © Copyright 2005 ETelecom Solutions, Inc

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