New Charts Help Consumers Make Informed Local and Long Distance Choices
Two surveys released today by the Telecommunications Research & Action Center (TRAC) suggest that New Yorkers will save up to $700 million on long distance and local telephone service. TRAC, the nation's leading telecommunications focused consumer group, has been publishing long distance rate comparisons for consumers and small businesses since 1984. The two new studies update similar New York surveys in 1999 and 2000.
Savings Mount for New York Consumers
Because New York was the first state where the local phone company was given permission to sell long distance service, TRAC in 1999 began to publish rate comparisons for long distance and local service in that state. In September 2000, TRAC conducted a further study to estimate the savings to consumers from additional competition in long distance markets and in the local markets. Our study then estimated consumers were saving between $112 million to $217 million. This month's new study updates the September 2000 report and estimates consumers are now saving up to $700 million a year.
Following the updates of the local service and long distance service price comparison Charts announced here, TRAC updated its previous study of consumer's savings. According to publicly available information, about 3 million consumers now subscribe to carriers other than Verizon for local service and about 1.7 million have switched to Verizon for long distance service.
The study concludes that residential customers will save up to $284 million dollars a year after switching long distance companies, and up to $416 million dollars a year after switching local phone companies. Using conservative assumptions, this study predicts that the average consumer that changed long distance service saved up to $13.94 a month, and the average customer saved up to $12.83 a month by changing local service. Overall, competition in the two markets will bring between $84 to $324 of savings a year for each New York phone customer.
"In New York increased competition has meant big consumer savings," said Samuel A. Simon, TRAC's Chairman. "It appears from our study that consumers are saving from taking advantage of both new local and long distance options. We are especially pleased to note that most of the savings in long distance appears to be among the low volume users." A copy of the study is available to press by request.
Long Distance Rate Comparison
The TRAC New York Long Distance Study shows that since Verizon entered the long distance market in New York, consumers enjoy savings unavailable to consumers in other parts of the country. "It is clear from our rate comparisons that consumers in New York, especially the low volume users can save by switching to Verizon SmartTouch," said Simon.
TRAC publishes similar surveys for national interstate long distance service, but has not included Verizon long distance in that comparison, since it is not yet available in all 50 states. The special New York Chart released today adds Verizon to the comparison with seven other major national long distance carriers (AT&T, MCI WorldCom, Sprint, Frontier, Excel, Qwest, and Matrix). Consumers who purchase the TRAC Chart can now compare costs among eight different carriers and 49 different calling plans.
Consistently in the lowest volume categories - TRAC 6, 12, and 18 call baskets - (TRAC uses a shopping basket approach to emulate typical consumer monthly bills), the Verizon SmartTouch option provided significant additional savings. For example, in our 6 call basket for Average Daily Use, the least expensive plan had been Matrix Elite at $6.01. When we add Verizon SmartTouch at $4.48 for the same basket, it is $1.53 less than the least expensive other plan.
Consumers need to be aware that SmartTouch does require pre-payment. Consumers pay an amount each month (or more often if desired) and the usage is deducted. This is different than all other carriers who bill you for usage and you pay after receiving a bill. SmartTouch also does not send a monthly bill. If you want a bill each month, it costs more.
In the high volume usage categories, consumers need to consider other options. Excel Simply More and Qwest 1500 plans were often the least expensive in the higher volume categories.
Consumers need to analyze their exact calling needs and compare all the plans in the TRAC Chart. For example, for the heaviest users in two of the calling categories, Qwest 1500 Calling Plan is the least expensive.
To obtain a copy of TRAC's Residential Long Distance Comparison Chart with the New York Addenda, send a $5 check or money order and a self-addressed stamped envelope (55 cents postage) to TRAC, P.O. Box 27279, Washington, D.C. 20005. You can also order an electronic or hard copy with a credit card on TRAC's website, http://www.trac.org.
Local Service Comparison
New York consumers continue to enjoy strong competition in the local telephone market. TRAC compared six different carriers and eight different local calling plans. TRAC last conducted a comparison in January of 2000.
TRAC found that consumers could save by switching from Verizon to a competitor that provides service on its own facilities, but switching to AT&T or MCIWorldCom would result in generally higher costs. For example, basic dial tone service from facilities-based carriers Broadview Networks, MetTel, and RCN average $5.90 while Verizon charges $6.60. These competitor's rates are also lower than Verizon's; RCN is 8.6 cents compared to 10.6 on Verizon.
TRAC uses a shopping basket approach to comparing plans and services for local telephone comparisons just as it does for long distance comparisons. "In this way we try to emulate several typical monthly bills for consumers," said Simon. "They should look at what services they use and how much calling they do and find the basket that most closely emulates their monthly needs. Then compare."
The baskets include local dial tone, a number of local calls, intra-lata calls and various levels of custom calling services like voice mail and *69 usage.
Smart shoppers for local service can enjoy substantial savings. For example, using TRAC's Average Daily Use baskets, the minimal user who switches from Verizon's highest plan ($17.16) to the lowest available plan, Broadview Networks ($10.48), can save $6.68 a month, nearly 50 percent.
To obtain a copy of TRAC's New York City Local Service Comparison Chart, send a $2 check or money order and a self-addressed stamped envelope (55 cents postage) to TRAC, P.O. Box 27279, Washington, D.C. 20005. You can also order an electronic or hard copy with a credit card on TRAC's website, http://www.trac.org.
