Long Distance Phone Service Review

Finding the cheapest long-distance service

If you have a land line and make a lot of out-of-state phone calls, it's worth shopping around for long-distance plans to see if you could be saving money on your monthly phone bill. While many people have given up their landlines in favor of VoIP or cell phones, there are still a good number of long-distance phone services available with competitive rates.

SaveOnPhone.com, Telcompare.com, 1CallSaver.com and TollChaser.com are just a few of the websites that maintain charts listing the best long-distance phone services. These charts emphasize cheap long-distance plans, listing rates along with notes on service, availability and extra fees. Many of the same long-distance companies are listed in the top five or at least the top 10 at multiple websites. Other sites, such as MyRatePlan.com, have interactive tables that offer suggestions depending on where you live and what types of calls you make. Having a couple of months of old phone bills on hand will make these sites more useful, since their rate calculators ask for the number of monthly minutes your phone is in use and the percentage of calls you make in state. ConsumerReports.org occasionally covers industry news and gives some basic tips on ways to cut your bill, but it provides no insight about which phone plans are best.

Reviewers continue to recommend smaller companies for cheap long-distance rates. Many of these companies no longer send paper bills, either billing directly through a credit card or sending an email invoice. We found many long-distance phone companies offering plans for well under 5 cents per minute. Monthly fees and incremental billing by seconds (six seconds and one minute are the most common) are also things to take into consideration in judging long-distance services. Some of the reviews we found also take customer service into account.

Most telecom giants, such as AT&T, Verizon and CenturyLink, offer a variety of plans. However, after comparing these plans to others, we found that despite a low advertised rate, fees and other charges quickly outpace savings. For example, Verizon's 5-cents-per-minute plan sounds enticing, but on top of the low rate is a $6 monthly service fee with a $10 per-month minimum charge. AT&T offers a One Rate 10 cents Nationwide Direct Plan, which has a monthly fee of $2.99. In contrast, most reviews favor a smaller company called ECG (Enhanced Communications Group) as the best long-distance carrier. ECG offers a 2.5-cents-per-minute plan with a 59-cent monthly fee (that's less than most other carriers), and six-second billing increments.

The long-distance landscape has changed much over the years. Established vendors, including the well-reviewed CogniState, continue to leave the market or merge with competitors. Lesser-known companies buy their long-distance service wholesale from the telecom giants, so the quality of service is generally the same. Fueling the competitive market are cell-phone companies, most of which lure consumers away from traditional long-distance services with free long distance and free weekend and evening minutes. We have a separate report on cell phone plans.

An alternative to traditional long-distance plans is Voice over Internet Protocol (VoIP), which uses your broadband Internet connection to place calls. You can get VoIP through your cable company (it's often called digital phone), a standalone service such as Vonage or a software program like Skype. Such plans can potentially save you money, with all-inclusive local and long-distance plans starting at about $25 per month. Skype offers low per-minute plans as well. However, all of these services are dependent on a stable, high-speed Internet connection. In the past, there were issues with 911 emergency services not being able to pinpoint your location if you called from a VoIP number. Currently, for hardware-based VoIP, the Federal Communications Commission (FCC) mandates full E911 services so that your number and address can be provided to emergency personnel. This feature is not available with software-based VoIP, like Skype, however. See our separate report on VoIP for more information.

Conventional long-distance providers are staying competitive with cell-phone companies and VoIP services by offering low per-minute charges and single-rate 24/7 plans, so calls to out-of-state relatives no longer need to be delayed in order to snag lower nighttime or weekend rates. In our research, we found long-distance rates as low as 2.5 cents per minute. Major carriers such as AT&T and CenturyLink offer competitive rates in bundled packages. A bundled package is a flat-rate fee for unlimited local, in-state and long-distance calls. This type of plan, however, is only beneficial if you make a high number of calls.