Washington, DC, January 11, 2005 - Heavily-promoted bundled local and long distance calling plans provide value only to heavy long distance users who make five or more hours of long distance calls per month, according to a new study released today by the Telecommunications Research and Action Center (TRAC), the nation's leading telecommunications-focused consumer group. The study, the 46th edition of TRAC's popular TeleTips Residential Long Distance Comparison Chart, compares eighty-two of the most popular stand-alone long distance and bundled local and long distance plans from the nation's leading telephone service providers. "Consumers are overbuying on telephone service to a greater extent than before," said Samuel A. Simon, TRAC's founder and Chairman. "While bundled packages appear attractive, for most consumers their value lies more in the convenience of having a single bill rather than as a true money-saver." TRAC's TeleTips comparison chart helps consumers calculate the true costs of each plan based on a "shopping basket" tailored to their particular calling habits. TRAC's comparison chart also breaks down the features and services of each offered by the leading long distance carriers.

Discretionary fees, taxes, and surcharges also continue to increase the cost of telephone service, making up fifteen percent or more of the average subscriber's bill, depending on carrier and usage. MCI's 85¢ regulatory cost recovery fee, SBC's 0.15% regulatory surcharge, AT&T's 99¢ regulatory assessment fee, and Sprint's 99¢ carrier cost recovery fee are all examples of these types of charges. In addition, many carriers have begun applying monthly recurring charges on plans that previously charged only a per-minute fee. "True" taxes that also eat into phone savings include the 911 fee, FCC Subscriber Line Charge, Universal Service Fund Fee, number portability fee, and various state and local taxes. Finally, "premium" services such as long distance directory assistance and calling cards have become favorite targets for carriers to apply new and raise existing fees. For example, AT&T has raised its payphone surcharge from 47¢ to 60¢ and Verizon increased it's long distance directory assistance fee from 95¢ to $1.25 per call.

Tips for Choosing Long Distance Service

• Don't Be on a Basic Rate Plan: "Basic" or "standard" rate plans continue to be the most expensive plans for consumers. These plans are the default plans that subscribers are placed on if they have long distance service with a company but do not choose a plan.
• Online Account Management: Long distance carriers continue to offer deep discounts to consumers who agree to some form of online billing or account management. Consumers who make two and a half hours or less of long distance calls per month may save money by switching to one of these plans.
• Best Value: In general, long distance buying decision should be based on who can provide the best value as opposed to choosing a carrier based on a low per-minute rate alone. With consumers increasingly turning to wireless phones, e-mail, and instant messaging for their communications needs, many users may find that they no longer need a stand-alone long distance plan at all. Consumers should evaluate their communications needs "in total" rather than as separate pieces of local, long distance, wireless, and Internet.
• Alternative Calling Methods: "Dial 1" long distance isn't the only way to call out-of-town friends and family. 10-10 dial around carriers, prepaid phone cards, wireless phones plans with included long distance, and VoIP are all methods that consumers can use as an alternative to standard long distance plans.

To order copies of TRAC's TeleTips^TM charts, please visit www.trac.org or send $7 check or money order for the TeleTips Residential Long Distance Comparison Chart to PO Box 27279, Washington, D.C. 20005.

# # #