Flashy phone offers, with fine print

Long-distance plans require careful scrutiny

Dollars & Sense

September 12, 1999|By Mark Ribbing | Mark Ribbing,SUN STAFF

Just when you thought life was complicated enough, there is now a bewildering and ever-expanding array of long-distance telephone plans for you to consider.

In an effort to win a larger share of the $80 billion long-distance telephone market, carriers have been trotting out one new offer after another. Sprint Corp. announced in July that it would have 5-cents-per-minute calling during evenings, 10 cents per minute at other times of day. Soon after, MCI WorldCom Inc. unveiled its own nickel-a-minute plan for evenings and weekends, with weekday rates ranging from a dime to a quarter per minute.

Then the colossus of the industry, AT&T Corp., came forward with a 7-cents-per-minute flat rate. However, the splashy price plans have not been limited to the Big Three long-distance companies: Upstart IDT Corp. said Sept. 1 that it was introducing a flat 5-cents-per-minute plan.

So, all this means big savings for you, right? Well, maybe not.

Long-distance plans tend to be full of riders and additional costs. For example, the new crop of offers typically includes substantial monthly fees, up to $5.95 in the case of the AT&T and Sprint plans. Some plans also have minimum charges, such as the $5 per month stipulated by one of MCI WorldCom's new offerings.

Experts said the new plans are best suited to people who have above-average long-distance costs, at least $25 or so per month. For people who do not fall into this category, they said, the plans are probably not worth the high monthly charges. In other words, the companies are going after the most lucrative slice of the market.

"Basically, the recent round of plans is highly targeted at high-volume users," said Mark Cooper, director of research for the Washington-based Consumer Federation of America. "It is the continuous refinement of competition for the smallest market segment, and the rest of us can rot in hell."

There are resources that can help consumers figure out which plan works best for them. The Telecommunications Research and Action Center (TRAC) is an independent, nonprofit organization that regularly compares pricing plans for interstate long-distance calls. TRAC and other experts offer the following tips:

You can save money by conducting a long-distance checkup -- this consists of calling your long-distance company's toll-free customer service number at least once a year and asking if you're on the company's least expensive plan.

Know thyself. When assessing plans, determine if there are any patterns to your long-distance calls, such as a tendency to call at night rather than during the day. This self-awareness can help you pick the right program.

For high-volume callers, AT&T's 7-cents offering looks promising for people who make lots of daytime calls. For people who make few daytime calls, an MCI WorldCom 5 Cents Everyday or Everyday Plus plan or Sprint Nickel Nights program might be the way to go.

If you don't spend $25 or more on long-distance per month, consider plans that have higher per-minute rates than the new programs but low or no monthly fees and minimums. Another approach would be to fire your long-distance carrier and go with a 10-10 dial-around service. But use caution in choosing such a service.

As all this suggests, picking the right long-distance plan is no simple matter anymore.

For a rate-comparison chart, check out TRAC's Web site at www.trac.org, or send $5 and a self-addressed, stamped (55-cent) envelope to TRAC, P.O. Box 27279, Washington, D.C. 20005.

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