Long Distance Phone Service Review

Finding the cheapest long-distance service

SaveOnPhone.com, Telcompare.com, 1+ Call Saver and TollChaser.com are just a few of the websites we visited 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, which 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. Consumer Reports 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.

Reviews 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 e-mail invoice. We found many long-distance phone companies offering plans for well under five 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 consideration.

Most telecom giants, such as AT&T, Verizon and Embarq, 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, AT&T offers a One Rate 10 cents Nationwide Direct Plan, which has a monthly fee of $2.99. Verizon's five-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. Embarq has a seven-cents-per-minute plan, but there's a $7 monthly charge in addition. 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 recovery fee (that's less than most other carriers), and six-second billing increments.

According to reviews, AT&T and MCI used to be the best choices for long-distance service but this is no longer true, partly because call quality and service are uniformly good among all vendors. And established vendors are leaving the market. MCI merged with Verizon, and Sprint now focuses on wireless, contracting out its land-line phone contracts to Embarq, which was spun off as a separate company after the merger of Sprint and Nextel. Meanwhile, 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.

You may have heard advertisements for Vonage. This is not a standard long-distance service. Rather, this is a Voice over Internet Protocol (VoIP) plan, which uses your broadband Internet connection to place calls. Such plans can potentially save you money, with all-inclusive local and long-distance plans starting at about $25 per month. However, they are dependent on a stable, active cable or DSL Internet connection, and there are still some issues with 911 emergency services. Since VoIP plans are "virtual," if you dial 911, police and fire units may not be able to pinpoint your location the way they can with a regular landline. See our separate report on VoIP for more information. According to a report posted on Slashdot.com, AT&T began winding down its CallVantage VoIP service to new customers in spring 2008 because of difficulties in getting 911 service to work for all customers as mandated by the FCC.

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. Surprisingly, we discovered that major carriers such as AT&T and Embarq, are offering 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.