TRACNotes

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• "Overbuying" Costing Consumers Money, Says New TRAC Study
• Update on Qwest Payphone Surcharge Increase
• More Tips on Reaching Human Customer Service
• Comparing Wireless Text Messaging Plans

BUCKS WATCH

"Overbuying" Costing Consumers Money, Says New TRAC Study - Consumers looking to save money by switching to a bundled local and long distance plan may want to look elsewhere, according to a new study released this week by TRAC. The study, the 46th edition of TRAC's flagship publication, the TeleTips Residential Long Distance Comparison Chart, shows that the 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. "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." The study also offers the following tips for consumers looking to find the best value for their long distance buck:

• 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 phone plans with included long distance, and VoIP are all methods that consumers can use as an alternative to standard long distance plans.

The TeleTips Residential Long Distance Comparison Chart is available for purchase for $6 on TRAC's website (www.trac.org) or $7 via mail order. For more information on the chart and how to order, click hereⁱ .

Update on Qwest Payphone Surcharge Increase - In last week's edition of TRACNotes, we mentioned that Qwest would be increasing their payphone surcharge from 25¢ to 55¢ for their long distance subscribers on January 11, 2005. The company announced this week that the charge will only increase to 50¢ in Maryland, Mississippi, South Carolina, and Maryland for intrastate calls. The payphone surcharge for interstate calls will remain at the new 55¢ level in these states. For more information on this fee increase, click hereⁱⁱ .

More Tips on Reaching Human Customer Service - Last week's article on reaching human customer service agents generated quite a bit of interest. TRACNotes reader Bob Hunt of Olympia, Washington sent us a neat trick that he uses. "When I can't find my way through an organization's 'toll-free' Auto Attendant maze, I usually hang up and call back (since it's their nickel)," wrote Hunt. "On that second call, don't press any touch-tone digits. This simulates a rotary dial phone call and usually gets you to at least a semi-live person." Thanks for the great advice, Bob!

WIRELESS WATCH

Comparing Wireless Text Messaging Plans - A recent New York Times article discussed how many teens and young adults are quickly getting in over their heads with costly monthly wireless phone bills thanks to out of control text-messaging (or "texting"). SMS technology, which allows one carrier's subscribers to text almost any other carrier's subscribers, has contributed greatly to the texting boom. With text messages costing, on average, 10¢ per message sent or received, a quick chat with a friend during a boring math class could end up costing teens and their parents big at the end of the month. Most wireless companies now offer plans that include several hundred text messages or more per month. Here's a quick breakdown of what the major wireless carriers are offering in the way of text messaging plans:

• Cingular - Text messages are charged at a default rate of 10¢ per message sent or received. The Text/Instant Messaging Packages with included text messaging minutes start at $2.99 per month for 100 messages (10¢ overage rate) to $9.99 per month for up to 750 messages (3¢ overage rate). The pricier Media packages include text messaging as well as multimedia messages (or MMS -- used to send photos, videos, and sounds) and wireless Internet access. The Media packages range from $7.99 per month for the Media Basic plan, which includes 250 text messages (10¢ overage rate), to $19.99 per month for the Media Works plan, which includes 1500 text messages (3¢ overage rate). Cingular customers who send 30 or more text messages per month will save by switching to one of the optional packages.
• Nextel - Subscribers pay a flat rate of 15¢ per text message on all plans, except for the $199.99 per month National Unlimited NDC Plus Plan, which includes unlimited text messaging. Optional text messaging plans with included messages can be added for a monthly fee. These include the $14.99 per month all-you-can-text Unlimited Text Messaging option. Subscribers looking for less costly text messaging can opt for the $4.99 per month 100 message plan or $7.99 per month 500 message plan (10¢ overage rate on both plans). All Nextel subscribers who plan on sending any text messages at all should sign up for the optional Pay As You Go Text Messaging plan. Since there is no monthly fee associated with the option and messages are charged at 10¢ instead of the default 15¢ text messaging rate, texters can save 5¢ per message at no additional charge. However, Nextel subscribers who send or receive a total of 50 or messages per month will save money by switching to one of the optional packages with a monthly fee.
• Sprint PCS - Subscribers pay a flat fee of 10¢ per text message sent or received. Sprint PCS plan subscribers can get unlimited text messaging for $10 per month or 100 monthly messages for $5 per month (10¢ overage rate). Subscribers who also have a Sprint PCS Vision Pack can upgrade to unlimited text messaging for $5 per month. Sprint PCS users who send or receive a total of 50 or more text messages per month will save by buying one of the optional text messaging plans.
• T-Mobile - Text messaging costs a flat rate of 5¢ per message sent or received. Optional texting packages can be added for $2.99 per month for 300 messages or $6.99 per month for 1000 messages (5¢ overage rate on both plans). T-Mobile subscribers who send or receive a total of 59 text messages or more per month will save by buying an optional text messaging plan.
• Verizon Wireless - Verizon Wireless is the only major wireless carrier to charge a lower price for text messages received than they charge for sent messages. Messages sent are charged at a flat rate of 10¢ per message with received messages costing 2¢ per message. Optional texting plans range from $2.99 per month for 100 messages to $19.99 per month for 2,500 messages. All text messages sent or received beyond the plan limits are charged at the flat rate. Subscribers who send more than 30 text messages per month may save money by buying one of the optional text-messaging plans.

Overall, consumers looking for the best value in text messaging should look to T-Mobile, whose flat rate of 5¢ per message is significantly below the competition. To read the New York Times story on text messaging, click hereⁱⁱⁱ (free registration required).

INTERESTING LINKS

FCC Main Page: http://www.fcc.gov

FCC Complaint Form - http://svartifoss2.fcc.gov/cib/fcc475.cfm

List of State Regulatory Commissions: http://www.naruc.org/displaycommon.cfm?an=15

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©2004 Telecommunications Research and Action Center. TRAC grants unlimited rights to reproduce TRACNotes or any information contained in it provided attribution is given as follows: "Source: Telecommunications Research and Action Center. http://www.trac.org"

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