Talk is cheaper - comparison shopping for the cheapest long-distance phone service and an analysis of phone bills from five businesses - includes related article on factors to consider when switching services

Home Office Computing, May, 1994 by Angela Gunn

In the 10 years since the shake-up of Ma Bell, such giant long-distance carriers as AT&T, MCI, and Sprint continue to bombard potential customers with ads that promise to keep them in touch with friends, family, and the world--each company boasting lower prices and better connections than the other guys. And right behind the Big Three are dozens of smaller carriers, promising to do the same for even less. Everybody, it seems, want to be your long-distance company. But the services and savings they promise are buried under layers of jargon about discounts, calling plans, and special options. With competitive this hot, people who don't look for the best, least expensive, and most full-featured service are missing out on remarkable bargains. Overall, the average long-distance phone call costs about half of what it did in 1984. Comparison shopping among carriers can lead you to great savings that accumulate over the months.

Most long-distance carriers will customize your service by laboriously evaluating recent phone bills and suggesting which of their calling plans could save you money. It's easy, however, to make your own decisions with a little information, a collection of your past phone bills, and 20 minutes of quality time with your calculator (see "Smart Ways to Switch Services"). HOME OFFICE COMPUTING asked five businesses to contribute their telephone bills for our analysis. The results--and our recommendations--follow, but one thing is clear: Most businesses spend far more than they should on long-distance service.

Dana Cassell Business: Writer (North Sandwich, NH) Average Long-Distance Bill: $105 Average Monthly Usage: 620 minutes/111 calls Calling Pattern: Moderate call volume; 25% day/49% evening/26% night; 100% of long-distance calls are out of state, 27% to most frequent called number; two phone lines (voice and fax) Current Carrier/Plan: AT&T/Simple Savings Suggested Carrier/Plan: AT&T/AnyHour Saver Estimated New Bill: $81 (22.5% savings)

Dana Cassell is a writer and editor who also runs several associations for independent writers. Her bills were the highest of any of the business owners we talked to for this story. She operates her company from her New Hampshire home, but many of her writers--as well as some of her relatives--live in Florida. Regardless of her high phone bill, Cassell's calling pattern more closely resembles that of a residence, with many of the more expensive calls being made in the evening hours. "When writing sometimes, I intentionally use sources in other time zones so I can reach them when my phone rates are lower," she admits, "even after 11 p.m. my time."

Cassell is a satisfied AT&T customer. "We tried one or two other companies, but they tended to have hidden costs," she says. "AT&T has been easy to reach and deal with." Cassell uses AT&T's Simple Savings discount plan, which provides her with a 25 percent discount on calls in one area code of her choice and 15 percent discounts on the rest of her domestic calls.

Diagnosis: Since Cassell's New Hampshire-to-Florida calls are subject to some fairly stiff per-minute rates (about 24 cents a minute during the day), we found that a flat-rate plan best suited her needs. These provide a single per-minute rate for calls anywhere in the continental United States (and slightly higher per-minute rates to international locales). Some plans provide two rates, for both peak and off-peak hours. The rates themselves vary drastically by company but tend to be a bit below the average per-minute cost of calls even over short distances.

Had Cassell's long-distance charges been higher--above $200 a month--she would qualify for a service such as LDDS Metromedia's EasyAnswer, which changes 15.5 cents per minute during peak times and 12.4 cents per minute off peak. Cassell's best bet, however, is AT&T's AnyHour Saver program, which has a $10 monthly minimum that serves as a kind of flat rate for 60 minutes of long-distance calling.

The AnyHour Saver package charges $10 each month for one hour of long-distance calling. Surprisingly, the $10 is applied to the most expensive 60 minutes of calls on the bill; for instance, Cassell's $10 could be applied to her pricey California calls before it wen toward those closer to home. After the first hour, calls costs 20 cents per minute during the day and a nominal 11 cents per minute during weekends, nights, and evenings--perfect for Cassell's frequent nighttime calls.

Cassell's current bill combines both her voice and fax phone-line charges; a separate service provides her with an 800 number for the writers' association. In addition to changing calling plans, Cassell should consider consolidating her 800 service under the same carrier to combine the bills. This has two advantages: Not only do some companies offer volume discounts (which kick in at remarkably low monthly charges--in some cases as little as $25), but the companies that do so will break down the bill to show voice, fax, 800, residential, calling-card, and even international usage while still allowing Cassell to write one check at the end of the month.