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  #1  
Old 11-16-2002, 11:10 PM
savagepenguin savagepenguin is offline
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In-state long distace always costs more than out-of-state?

I've looked at a lot of long distance plans by a lot of different companies online.
In every case, rates for out-of-state calls are cheaper than the rates for in-state calls. So why are calls to places 50 miles away more expensive that calls 2000 miles away?

I've also noticed that in a lot of cases, calls to Mexico (from the USA) would cost twice as much as calls to some European countries, or even Australia. I assume the the just relative to what each nation charges for phone service, or taxes the phone company. Am I right?
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  #2  
Old 11-16-2002, 11:53 PM
Sigene Sigene is offline
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Interstate commerce is federally regulated. Intrastate commerce is not.
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Old 11-16-2002, 11:54 PM
kniz kniz is offline
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Interstate commerce is regulated by the federal government and intrastate charges are up to the state. This is also true of other regulated industries, like trucking.
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Old 11-18-2002, 03:32 AM
Freddy the Pig Freddy the Pig is offline
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The key difference lies in who regulates the access charges assessed by local phone companies to long distance companies which originate and terminate calls on their networks. Access charges on interstate calls are regulated by the FCC and are generally low. Access charges on intrastate calls are regulated by the states. They're generally higher, partly because high-cost states can't average with low-cost states and partly because local companies have a stronger lobbying presence in the states than in Washington. The higher access charges inevitably translate into higher long distance retail prices.

It's pretty much the same story internationally. By setting high access charges, a country like Mexico can effectively force international LD companies (and their customers) to help subsidize its local service.
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Old 11-18-2002, 07:29 AM
savagepenguin savagepenguin is offline
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That all makes sense.
Thanks, people.
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