Long Distance Phone Service

According to reviews, telecom giants 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 across all vendors. And traditional vendors are leaving the market. MCI's business was sold to Verizon, and Sprint now focuses on wireless, contracting out its land-line phone contracts to Embarq. Meanwhile, the cheaper no-name companies buy their long distance service wholesale from the telecom giants, so the quality of service is generally the same no matter what. 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.

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¢ per minute. Surprisingly, we discovered that major carriers such as AT&T 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.

Per-minute plans offer cheap long distance

If you make less than 12 hours of long distance calls per month, then a per-minute plan is probably your best bet. Of course, you'll need to do a little math and figure in your local service in order to decide whether you'd do better with an all-inclusive long distance plan like AT&T's Unlimited Plus (*est. $33 per month). However, if you don't make that many long distance calls, a per-minute plan will most likely be your cheapest option. Three companies came up repeatedly in our research: ECG, Pioneer and CogniState. 3U Telecom has the best international long distance rates.

SaveOnPhone.com and TollChaser.com say that right now, ECG (Enhanced Communications Group) has the best deal. Long distance rates with ECG Easy 2.5 run 2.5¢ per minute state-to-state, with a minimum 59¢ monthly charge. The minimum per-call charge is 18 seconds, after which calls are charged in six-second increments. While this isn't the absolute lowest billing increment we found (some companies bill in six-second increments with no minimum; 3U bills in one-second intervals), competing companies such as Pioneer and PNG charge by the minute. Customer service appears to be a factor in many of the reviews we read, and ECG excels in this respect as well. Editors at SaveOnPhone.com say customer-service response time was less than one minute. User feedback at Phonedog.com is also above average.

With ECG's Easy 2.5¢ plan, you must pay your bill automatically with a credit card or automatic debit. A paper bill or check payment isn't an option. ECG has another plan, the Basic 3.5 plan, which charges 3.5¢ per minute with a $2.50 monthly bill processing fee. The only advantage to this plan is that you get a monthly bill in the mail, which you can review before you pay. Still, if you prefer receiving a monthly paper bill, ECG has one of the better deals. These plans won't be available to customers in about 15% of the U.S., depending on your local service carrier. You can determine whether you are eligible for ECG by punching in your phone number on their website (https://www.dialecg.com). Note that calls to Hawaii and Alaska cost more (24¢ per minute for Alaska and 21.4¢ for Hawaii). Higher-cost calls to these states are typical of discount long distance services.

CogniState is listed in the top five in some of the reviews we read. CogniState, which boasts great in-state rates, also has a long distance plan that includes a competitive 2.7¢ per minute rate with no monthly minimum and no monthly service charge, along with six-second billing increments. Online billing is free, but if you prefer a paper bill, CogniState tacks on a $2 monthly fee if your bill is under $20. If your bill is over $20, the paper-bill charge is waived. In our research, we found this policy to be fairly typical of discount long distance companies.

William Van Hefner at Telcompare.com reviews CogniState's plan and highly recommends it. He also points out that the low rates only apply to those whose phone service is provided by a regional Bell company such as SBC, BellSouth (both now part of AT&T) and most of Verizon. Customers outside of these service areas will pay a higher rate. However, if you qualify for CogniState's least expensive rate, then you also qualify for the still cheaper ECG plan.

3U is a company that undercuts other providers when it comes to international calls and calls to Alaska and Hawaii, even though its 4.8¢ per minute domestic rate is higher than ECG's and CogniState's. 3U charges in one-second billing increments, an industry first. That means that if your call lasts three seconds, you pay for three seconds. With other plans, you'd pay for a six-second call or even a 60-second call. There is neither a monthly fee nor a minimum usage charge. Billing is online or by e-mail, and you must pay with an automatic credit or debit card deduction. You'll have about three days to review your bill before your card is charged. You may choose to receive a paper bill, but 3U charges $1 for that.

One of 3U's most unique features is its cheap international calling rates. Many countries (including Australia, Japan, Germany and the U.K.) cost the same 4.8¢ per minute as domestic calls (when calling a landline). 3U also gives you a special access number, so you can get those same rates when calling from your cell phone (as long as your cell phone is registered in the 48 continental states). Your cell company will simply think you are making a domestic call. If you're calling an international cell phone, rates vary a lot but are still lower than those of other companies. Complete rate info is easy to find on the 3U Web site. 3U is available to anyone; your local carrier does not have to be a current or former Baby Bell (as it does with ECG), so 3U is a good choice for those who can't get ECG.

Total Call International is not mentioned very often among the least expensive calling plans, but this company has the advantage of wider availability than ECG or CogniState. Total Call has a 3.9¢ per minute, 24/7 rate plan with no minimums or monthly fees, and six-second billing increments (with an 18-second minimum call time). If you make frequent long distance calls, there is also a 2.9¢ per minute plan with a $15 monthly minimum. Online billing and payment is required. Total Call's customer service is unique in that you can request a Spanish-speaking representative, in addition to five other languages. Although it is more expensive than ECG, Total Call is available with most carriers, and it's a good choice if you don't live in ECG's coverage area and don't make many international calls (3U is cheaper for international calls).

Pioneer is another company we saw mentioned frequently in reviews of long distance services. Pioneer's per-minute rate is cheaper than most: 2.7¢ per minute for domestic calls (excluding Hawaii and Alaska). This company also has a good reputation for customer service. Billing, however, is in 60-second increments, so if you make a 10-second call, you are billed for 60 seconds. Pioneer does offer a plan with 6-second increments, but the charge is 3.25¢ per minute. Calls to any other Pioneer customer are billed at only 1.9¢ per minute. As with ECG, your current location must be served by a current or former Baby Bell company, so about 15% of the country won't be able to access Pioneer. Paper bills cost $1, though this charge is waived if you make at least $15 worth of calls per month. There appears to be little difference between ECG and Pioneer, but we like ECG's shorter billing increments. If you make a lot of in-state calls, it pays to check the rates of both carriers.

We also saw several plans that offer some kind of incentive for luring your friends and relatives to join up. AmeriCom offers an incentive of 2.5¢ per minute (reduced from their standard 3.5¢ per minute) for referring three friends, plus a bonus of 1% of your friends' usage. However, if you are always nagging your friends to switch phone providers, you might find yourself with fewer friends to call.

Big Red Wire is now available across the continental United States. There's no monthly charge, and rates are 2.6¢ per minute. Big Red Wire offers only e-mail customer service and automatic credit/debit card billing. If you know anyone else using BRW, this company will give you $5 worth of free calls per month, but only to other users of Big Red Wire.

Covista is a company that's begun to appear in many lists of top-rated providers. It charges 2.5¢ per minute, in 6-second increments with a 6-second minimum call. There is a service charge of $1.99 per month for accounts that bill less than $20, though for customers who use credit card billing, this charge is waived. Covista may be a good option for those who can avoid its service charge, though as with ECG and some others, it is available only in areas serviced by the Baby Bells.

Free long distance

Keep in mind that you can also make free Internet calls through software applications you can download for free. The catch is that you can only call people who also have the same installed application. One popular service is Skype (http://www.skype.com), which gets great reviews. You can call anyone else who has installed the software over your Internet connection at no charge. Skype also has add-on plans that let you call regular phones through your computer for about 2¢ per minute in the U.S., Canada, most of Europe and Australia.

We have a separate report on VoIP , which includes software such as Skype that lets you make free long distance calls through your computer.

Important Features: Long distance phone service

Here's what the experts say to consider when choosing a long distance carrier:

• Check the fine print for a monthly fee or minimum usage charge. For most callers, a monthly fee is a completely unnecessary expense. Since long distance rates decrease as competition grows, some companies add a monthly fee to offset these lower charges. Most companies call this charge a "recovery fee." The only federally mandated charge is federal tax. The USF (Universal Service Fund) charge is required of long distance companies, but the company is under no obligation to pass the fee to consumers (most do anyway). Any additional charges on your bill (other than calls) are assessed by the long distance company, no matter what phrasing they use.

• Time increments can have a big impact on your bill. Some companies (such as AT&T) bill in one-minute increments; if your call lasts one minute and one second, you're charged for two minutes. This unused time can add up, especially if you make many short long distance calls. Programs that bill at six-second increments more accurately reflect your actual calling time. Editors of Phonedog.com say the savings are 12% to 14% when using a six-second billing increment versus a full minute plan.

• Inbound toll-free service is a nice option. This can be a great way to avoid accepting charges for collect calls. Many long distance providers now offer residential 1-800 numbers, usually with the same rates as outbound long distance calling. There's usually a monthly charge of about $3 for this service, though providers such as 3U or Pioneer offer it for $1, and ECG offers it for free.

The USF (Universal Service Fund) is a required fee from the FCC (Federal Communications Commission) used to help supplement phone service for low-income families, schools, roads, libraries and health care. Phone-service providers are under no obligation to pass the fee to consumers, but most do anyway. In the past, companies used this as a license to charge pretty much whatever fees they liked, attributing them to USF and pocketing the difference. That has changed. The FCC now mandates that all companies charge the same fixed amount, which is announced and changed quarterly, and pay the full amount to the FCC. The current USF fee can be found on the FCC website.

Bear in mind that this report has no relevance to in-state calls. If a considerable portion of the charges on your monthly bill comes from long distance calls made within your state (e.g. from Los Angeles to San Francisco), you'll have to do some of your own research to find the best rates. Since in-state rates vary so greatly from state to state and between carriers, it's impossible to make recommendations for the general consumer. SaveOnPhone.com's rate calculator is a good resource for checking the in-state rates of various long distance providers. In addition, Phonedog.com's rate plan comparison charts have the option to list providers by the lowest in-state rate for any given state.

Our Consensus Report shows how many times products are top-ranked by reviewers included in our
All The Reviews Reviewed chart.

# of Picks	Model (with retailer links)
8	ECG (*est. 2.5¢ per minute)
6	CogniState (*est. 2.7¢ per minute)
6	Pioneer (*est. 2.7¢ per minute)
3	Unitel (*est. $2.5¢ per minute)
2	3U (*est. 4.8¢ per minute)
2	Total Call International (*est. 3.9¢ per minute)
2	Accxx (*est. 3.9¢ per minute)
1 each	Voice Revolution, PNG, Capsule, Simplicity, OPEX

ECG is the choice of most reviewers as the best domestic cent-per-minute provider. Total Call is also listed in our Fast Answers. Even though it's more expensive than ECG, Total Call is available in areas that ECG does not serve. CogniState and Pioneer aren't far behind ECG with their low rates and no monthly fees. However, these companies cost more than ECG's 2.5¢ plan and don't have any better availability. 3U offers some terrific international, Hawaii and Alaska rates.

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