The references to baby bells in the microsoft suit thread reminded me of a question I’ve often pondered.
I was around when Pac Bell was broken up. My long-distance phone bill averaged a little over $100/month with Pac Bell. After I switched to Sprint, it went down to $50-60/month for approx. the same usage. Pretty big savings.
What I’m wondering is, is the cost of long-distance cheaper now (adjusted for inflation) than it would have been if Pac Bell had been left alone? I think so, but I don’t makeas many calls as I once did.
BTW; People were predicting the same sort of doom & gloom then as they are now, concerning the potential dismembering of Microsoft.
Peace,
mangeorge
Work like you don’t need the money…
Love like you’ve never been hurt…
Dance like nobody’s watching! …(Paraphrased)
Off the point a bit, but using a certain prepaid card, it costs me 5c/min to call the UK (which i think is ludicrously cheap, albeit with a connection fee of $1) but 6c/min to call within the US…curious, but happily so.
Not off the point at all, android209. Callong overseas used to be something one only did during the holidays. Well, maybe not thanksgiving.
Maybe we’ll see the same sort of result if Microsoft does indeed break up.
Who knows.
Peace,
mangeorge
Long Distance is soooo cheap…
Well, the phone services are looking for other ways to make money. One of their big cash cows now is the charge the heck out of collect calls (three times and more than a regular LD call). And if you watch any amount of TV you’ve seen that they’re not bashful about promoting those collect calls.
I can’t believe how much I used to pay for ld compared to now. 11 years ago my fiancee lived in NYC and I lived in Cincinnati. An hour would cost a minimum of $8. And I wouldn’t DREAM about calling him during business hours. And I learned quickly that Sundays were not considered weekend/ evenings, which I thought was a joke. That same call today would cost a max of $5.40 anytime of the day.
Today, I’ve seen promos for as low as 7 cents a minute, but then you have to pay a 5 buck a month fee to begin with. I only average 15 bucks a month now, so the $5 wouldn’t be worth it.
I’m thinking of using the 10-10-xxx services. One advertises 99 cents for the first 20 minutes, then 9 cents a minute after that. That beats my rate of 9c a minute, but I’ve never used the 10-10 numbers for some reason.
Well, phone service is the rare enterprise that I am very happy with. These people actually have my respect and prices are what I consider very reasonable. The competition has definately brought prices down, and I never concern myself with what time of day i call. This is progress in my book. In college I lived in a house with 8 phone lines. AT&T had a 5¢ a minute rate, that cost $4.95 a month up front. The beautiful part considering we were all in college, poor, and making alot of long distance calls home and to friends, is that that $4.95 charge covered all 8 phone lines. So basically we saved over 50% of the typical rates. These special rates are available to everyone, and are used by all companies. The 10-10-*** numbers I think drove these prices so low, and the cost savings is non existant unless you very cautiously structure you calling patterns.
I was slammed last month. My ld calls wer over a dollar a minute. I called and complained,and they deleted it,but I switched back to at&t anyway. I’d had touch 1.
The characters touting the collect call service say how much the callees will appriciate that the caller used that service. If I were the callee, I’d appriciate it more if my “friend” either had a calling card or carried at least 35-farging-cents instead of saddling me with the charges.
One of these commercials was some guy calling his girlfriend. Oh, yes, that’s romantic: a collect call from your boyfriend.
Working for the phone company, I have some good advise…Don’t go switching your carriers all the time. We have customers that switch once a month.
Think of it this way, only one company owns the telephone lines (mci in most parts of the country). If every long distance company owned their own lines, we wouldn’t see the sky. The point is, all the other companies are just reselling the same service, so how could one be that much cheaper than the others. If one company is selling a cheaper rate, then chances are, they charge a higher monthly service charge. Plus, with slamming, etc, that extra .03/minute isn’t worth it if your on the phone with the company, correcting the bill, for a couple hours everytime you get your bill.
So pick a company you trust and stick with it.
The only way to rid yourself of temptation is to yield to it–Oscar Wilde
My roommate and I have really gotten great deals from phone companies competing for our business. Every time another company calls with a better deal, we’ll take it. We’ve switched twice in the last three months. Since they all basically provide the same level of service and pay for the switching costs, the only thing that’s different is that I pay less and less for long distance.
FYI, we always have huge phone bills. Currently, we get the first 100 minutes of long distance free each month through MCI. Our phone bill has been reduced by about $40 (or 5 six packs of Pilsner Urquell).
You’ve been very lucky. Maybe you are the exception that proves the rule. Granted, you can find a really good deal if your long distance spending is extreme, but i still hold my advise for those with regular spending habits.
The only way to rid yourself of temptation is to yield to it–Oscar Wilde
I have picked a long distance company and stuck with it, because I like their customer service. I did switch, briefly, but didn’t care for the service as much and switched back. I got some free calls for both switches, so I still came out ahead.
However, if you’re more interested in getting the best possible rates, switching whenever you’re offered a better deal makes sense. A friend of mine did this for years, and it generally went something like this:
Company B: If you switch to us from Company A, we’ll give you $50 worth of free calls and pay the switching fee. Plus your per minute charges will be less.
Her: Okay.
Company A: If you switch back to us, we’ll give you $50 worth of free calls and pay the switching fee, plus we’ll match the per minute charges you’re paying now.
Her: Okay.
Repeat ad libitum.
It’s a little more work, but she got a lot of free calls that way.
First, to the OP: Yes, LD rates are far below those which would have prevailed if the old AT&T hadn’t been broken up. Competition has driven domestic rates down by (in some cases) 90% in nominal terms since the breakup. It’s nearly unthinkable that that would have happened in a monopoly or near-monopoly situation, despite the technology gains that have allowed LD providers to lower their costs to carry traffic. As I type this, I am listening to a conference call by an upstart telecommunications company in which they are predicting the death of long distance rates entirely for large business users.
Now, to metroshane and SaxFace.
I agree that for most people with phone bills below $30 or so, it’s not worth the hassle of switching frequently. Especially for those who use calling cards a lot (learning a new PIN every 3 months is a pain). It’s completely worth it if bills are large. As torq points out, it’s one of the few truly competitive large industries in the country today – take advantage of it! Just remember that your local telco gets to charge you $5 or so to switch, so make sure the new carrier agrees to pay it.
And lots of companies “own the telephone lines.”
Companies with owned nationwide fiber networks:
ATT
MCI/Worldcom
Sprint (soon to be MCI/Worldcom)
Qwest (soon to be USWest/Qwest)
Frontier (soon to be Frontier/Global Crossing)
Cincinatti Bell (well, it’s still microwave in a few places, but they’re working on it)
Others which I can’t talk about for compliance reasons.
Companies in the process of building or acquiring owned nationwide or near-nationwide fiber networks:
Level 3
Metromedia Fiber Networks
Nextlink
Others which I can’t talk about for compliance reasons.
One thing in the US that does puzzle me is the fact that companies (Ameritech for instance) charge for that service where you can check who called you last (sorry, forgot the exact name of the service. In the UK it’s free, the logic being that you are encourage to dicover who called you last…that way you’re much more likely to make extra calls.
And off at a tangent, why should local/national calls be differently priced…i don’t think the cost to the phone companies can be so different, maybe a billionth of a cent in electricity consumption…
And off at a tangent, why should local/national calls be differently priced
The same reason you get better gas mileage on hwy than in city.
A call jumps on a line from your house to your local central office facility. then it hops on a really long line all the way to the other city’s central office to that person…
local calls have to make lots of turns and redirection when traveling inner city.
I treated Art as the supreme reality, and life as a mere mode of fiction–Oscar Wilde
Yes, lot’s of companies own line, but what i meant was in a single area. And yes, companies are building there own networks, but most companies resell other companies services.
And a lot of companies sell the same product under different names. ex: ATT owns Lucky Dog.
I treated Art as the supreme reality, and life as a mere mode of fiction–Oscar Wilde
Sorry, android209. Your reasonable question is getting caught up in a muddle of minutiae.
Your question was, “Why should local/national calls be differently priced?”
The short answer, of course, is that LD companies gotta make a buck, too!
The big answer is that in addition to recouping the marginal cost of carrying your minute of traffic across this great land of ours, LD companies have to recoup a fair return on the massive capital they have invested in building the network in the first place. So even though the additional cost of carrying your minute is quite low (not quite a billionth of a cent, but under one cent), charging a price that low would leave no incentive for carriers to invest a few billion per year in upkeep and expansion of the network. So the network would die, and we’d all be stuck with tin cans and string.
Additionally, the marginal cost to a LD carrier is actually far above one cent per minute of carried traffic. (What? He just said it was below that. What an idiot!) OK, their cost to carry it from Chicago to NY is under $.01, but their cost to carry it from their office in Chicago to your house runs about 2 cents, and their cost to carry it from their NY office to my house is another 2 cents or so. These are access fees, charged to LD companies by local providers such as Bell Atlantic and Ameritech. These fees have been coming down pretty steadily since 1996, and are expected to fall further still. So there is a source for future decreases in LD rates. As I alluded to in an earlier post, in the future it is not unlikely that large users will see the same rates for local as for LD if they agree to bundle the products with one carrier. Us little guys will probably see at least some extra charge for LD, since individually none of us generates enough minutes to make carriers’ networks hum.
Your other question was about last incoming call service. That’s a little more craven. You have to remember that the UK service historically has been more heavily metered. That is to say, lower line charges and higher per call and per minute charges. So that extra call you make in the UK can mean serious money to British Telecom. Here in the States, not so much. Most places are either not metered for local at all, metered at a “per call” rate, or lightly metered. So the revenue curve works better if you can charge $.75 for each person who wants the number than if everybody got it for free. There are also regulatory issues involved, but no need to go into them here. Most competitive local telcom companies, if you have access to such a thing, will in fact throw the service in for free.
I am a supervisor in the Customer Service department of a phone company that provides both local and long distance. So I say from experience: Don’t use those 10-10 numbers, they are the biggest rip-off going today. I have seen people with terrible, awful, immorally high bills all because they have used the 10-10 services. I have (rarely) seen others who have received rates comparable to direct dialing; but, I don’t think I have ever seen one with any kind of significant savings. If you really want to try it, I would advise you to only make a few phone calls using the 10-10 number until you get your next phone bill and see how it works for you.
As for the long distance rates – be careful, I don’t want to point fingers at any long distance carrier in particular (but the initials are MCI) who “forgets” to mention $8.00 minimum usage charges, or that their fantastic low rates are only state to state - the in state rates are MUCH higher. I could go on and I, but I am boring myself to death…
