April 8, 1998

Washington, DC -- Consumers may be spending twice as much as they should for interstate long distance telephone service because of a growing disparity in prices among long distance calling plans, according to a study released by the Telecommunications Research and Action Center (TRAC), a Washington, DC-based consumer group that has tracked long distance prices for the last 14 years.

"Long distance carriers are changing rates, plans and terms of service so fast it is hard to imagine how consumers can avoid ending up paying too much," said Samuel A. Simon, founder and Chairman of TRACs Board of Directors. "And that mistake can cost them plenty. Our advice used to be just get on any calling plan. But today, if you get on the wrong calling plan, you could still be paying nearly double what you would be if you were on the right plan for your calling pattern."

TRAC also released its updated "Hot Tips" that advises consumers to take advantage of Sunday calling, to call after 7 p.m. weekdays, to watch out for monthly fees and monthly minimums, and to avoid random rates. The study is TRACs 35^th installment of Tele-Tips™, a publication featuring an analysis of 18 different consumer calling patterns (or call baskets) and how plans offered by eight of the largest long distance companies fare in comparison against each other.

The study for the first time looks at the rates of Excel, a long distance company that sells mainly through multi-level marketing agents. "Excel has grown to be among the largest long distance companies in the country, so we felt it necessary to add them to the comparison chart," said TRACs Simon. "By doing so, we do not imply an endorsement for their marketing methods. Consumer groups historically are cautious about multi-level marketing systems and the risks they impose to investors. We looked at Excels long distance rates only, and not at whether it is a good investment opportunity."

"A lot of things have changed over the past six months that are confusing and putting consumers at risk," noted Simon. "The traditional basic time periods are gone. There are no longer daytime/evening/nighttime rates. Instead, there are peak and off-peak rates. Peak rates are typically charged for weekday calling between 7 a.m. and 7 p.m. and are comparable to the old daytime rates. Off-peak rates begin after 7 p.m. in most cases, and these are generally the old evening rates. The old night rates have become weekend rates. For the most part, rates no longer vary based on the distance of a call. Because of these changes, consumers could be paying more for a call than they would have before. Before you pick up that phone, be sure to know what youre paying."

The study noted that many new changes are costing consumers more, even though the per-minute rates may appear to be competitive or declining. For instance, calling card fees continue to rise for some companies, payphone calls with a calling card now feature a per-call surcharge that is passed along to the consumer, and new Presubscribed Interexchange Carrier Charges are beginning to appear on the monthly bill.

According to the TRAC study, MCIs 5-Cent Sundays rate made a big difference for Heavy Night and Weekend callers. The study also found that monthly recurring charges are making the cost of long distance much higher for low volume users. As a general rule, low volume users are now saving much less when compared to high volume users, particularly since TRACs last comparison in September 1997.

"The long distance companies have signaled that they want to make more money off of low volume users, thus the advent of the monthly recurring charge for many plans," said Simon. "In many cases, there will be a low per minute flat rate, but a monthly fee of anywhere from $1 to $4.95. If you do choose to go on one of these plans, see if the fee can be waived at a certain usage level or even outright."

The 12-page study includes additional information on how to choose a long distance carrier, detailed descriptions of each plan, a features and services comparison chart, a calling time period chart, and the TRAC Update which details some of the changes in the long distance industry over the past six months.

Tele-Tips™ is the only independent source for information on long distance calling plans. The study covers eight of the largest long distance carriers, consisting of nearly 95% of the market. TRAC is a non-profit, tax-exempt consumer organization that works to help consumers make informed decisions regarding their long distance options. TRAC also provides an internet-based long distance call comparison tool called WebPricer on the TRAC Web site at www.trac.org.

Copies of the current Tele-Tips™ residential chart may be obtained by sending a stamped (two first class stamps), self-addressed, business sized envelope and a $5 check to TRAC at PO Box 27279, Washington, DC 20003. Members of the press can contact Geoff Mordock at the number above for a free copy.

For more information, contact:

Geoff Mordock
Samuel A. Simon
(202) 408-1130

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