by Jack Lee
A consumer special – Saving you money
A little understood area is what the phone company charges you in extra costs, fees and taxes in your monthly bill. Well, I am here to explain that and a lot more. This information could save you some serious money!
My provider is AT&T and my base rate is $29.94 a month. Probably 90% of you have the same plan. For that base rate I’m allowed to make and receive local calls only. For anything else, local long distance and long distance (two separate classes of billing) I must also have a long distance provider and the costs varies wildly. But on average we all pay around .10 cents a minute for our long distance. If you are with AT&T this can be from 7.5 cents a minute and up on your home phone. The good news here is even though AT&T may have a near monopoly on your local phone service there are many long distance discounter companies out here that offer many plans for your home phone, some as low as 2.5 cents a minute anywhere in the USA.
Do you use a calling card? If you do, you’re paying top dollar. An AT&T long distance calling card jumps to $1.15 per minute. If you’re using an operator assisted calling card it’s a lot more expensive; try $2.95 a minute. That’s almost a 300% increase over the base rate and it’s an increase of 3000% over your 7.5 a minute home phone rate.
Now let’s talk surcharge; what’s a surcharge anyway? You pay it on your home phone every month and you probably never even noticed. A surcharge is what the government allows the phone company to charge above their normal rate to cover the cost of research and new product development (R & D). You’re probably asking, isn’t that normally included in the price of any product? Well yes it is, unless you’re a regulated utility. A government commission controls what they can charge customers and that makes it more difficult for them to adjust prices as needed. So instead of asking for a straight forward price hike, they ask for a “surcharge” and somehow in terms of government bureaucracy this makes more sense and therefore it’s easier for the phone company to get it. When you ask what the basic plan is you are told $29.94 and that sounds so much than if those taxes and surcharges were added on.
A Penny Here; A Penny There: There’s another lil’ gimmick the phone company uses and it varies from one company to another. It’s called rounding. The various types of rounding combined will add another 10 percent to 20 percent to your phone bill, but if your phone calls are always over 5 minutes, this part won’t make much difference to you. But, for quick calls of a minute or less it could add up to a lot of money for the phone company. Rounding applies to time rounding, call-length minimums, decimal rounding and cost minimums. In many cases, they can easily turn a small company’s monthly telephone bill of $2000 into $3000 or more and your home phone calling can also be proportionately affected. Need I say, it pays to know what your phone company is up too?
Polling shows that roughly 73% of phone users are unaware of these hidden charges and they accept their bill and don’t search for lower rates. Not me, I am way too frugal to be gouged like that. So I went with an internet service and now I pay zero surcharges, zero taxes, zero monthly service fees, zero long distance charges for anywhere in the USA and I get both local and distance calling for $25 a year. In addition I also have voice mail and caller ID for free. If I call overseas I can do that between .05 and 10 cents a minute.
If I am traveling I can take my internet device with me and use it wherever there is a computer or I can just use my laptop. My saving is about $1600 a year, but yours could be more. This method has its downside, you must boot it up to use it, but I don’t mind a few seconds of wait considering how much money I’m saving. Actually it’s added more productivity to my life because now I am more likely to call long distance at zero cost, rather than to send an email or go snail mail. That time savings more than off sets my daily boot up time.
Lastly, between government taxes and the surcharge cost you can add another 39% to your phone bill. And that is how your phone bill really works. I’ve deliberately not mentioned the names of telephone discounters here or even my internet phone company because this is not an advertisement or endorsement for any particular company. I’ve only given you the information you need to get started and do some quality shopping for a better deal, unless you’re blissfully content to be paying more than you need too?
Love the cartoon – when I got married, my grandmother gave me a rolling pin and a frying pan that had been given to her by my grandfather’s gramma – for keeping her husband in line.
We quit AT&T because no matter what we paid, the service was getting to be non-existent. We got cell phones through verizon and computer through comcast. Yes, it’s more expensive, but we’ve had continuous service for almost a year now – something new for us after being with AT&T for years. It was very depressing paying our AT&T bill month after month and being without service for days at a time, several times a month. They said we were too far from their transfer box over in College Town to get a consistent DSL signal, and the only thing they’d offer was to downgrade us to dial-up for a few dollars less a month!
Here’s a Vermont joke about phones (one of my great great grandpa’s was from Vermont) —
A Vista volunteer hiked up a long, winding canyon to visit an elderly man who townspeople said had been holed up by himself for years. He found the old man sitting on his porch, smoking his pipe. They sat and talked at length about the old days. Suddenly the Vista man was surprised by the ringing of a phone from inside the old tumbledown shack. But the old man just sat as it rang and rang. Finally, the Vista man couldn’t sit any longer, he leaned over to the old man and asked him, “Well, aren’t you going to answer your phone?” “No!” The old man says. “I got that phone for MY convenience, not everybody else’s!”