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"Dial-Around" Rates Climb Sharply

October 21, 2002
Is 10-10-220 charging 10-10 2 much? Why did 10-10-345 implement 10-10 3 more rate hikes?

Millions of consumers wanting lower cost long-distance have responded to TV and direct mail ads for those and other 10-10 "dial-around" codes. Unfortunately for bargain hunters, many rates and fees have been increased as the telecommunications industry focus has shifted from market share to profitability.

Users of 10-10-321 -- the first mass marketed 10-10 number -- are facing increases of up to 80 percent. As of October 1 the 10-10-321 interstate rate is now a flat 18 cents per minute. Through September 30, interstate calls less than 10 minutes long had cost 20 cents a minute. At the 10-minute threshold the rate went down to 10 cents a minute for the entire call. This means a 30-minute conversation that had cost $3 will now cost $5.40. 10-10-321 is marketed by a subsidiary of MCI-WorldCom.

In September, 10-10-345 doubled per-call connection fees from 15 to 30 cents a call within the U.S. "Connection fees have a big impact on the actual rate per minute when users make short phone calls," says consumer advocate Rich Sayers of rates comparison Web site 10-10PhoneRates.com.

"A one-minute call with 10-10-345 that was 25 cents is now 40 cents. Quite often people get an answering machine and leave a short message or hang up. That's a 60 percent cost hike on those calls." All interstate calls were affected as of 9/1/02, but in-state effective dates vary due to regulations. 10-10-345 is marketed by a subsidiary of AT&T.

Of all the consumer email Sayers receives, the angriest are from 10-10-220 users who make short calls. Some people don't carefully evaluate the TV offer of "99˘ for all calls up to 20 minutes and 7˘ per minute after that." Every call within the U.S. costs at least 99 cents, even if the call is less than a minute long.

Sayers also notes, "In December 2001, they added a 9.9 percent Universal Service Fund surcharge to 10-10-220 out-of-state calls. So calling another state costs at least $1.09 each time." 10-10-220 is part of MCI-WorldCom.

"Some companies are trying to squeeze every penny out of customers to make up for bad business decisions of the past few years," says Sayers.

Bargain-hunters should remember that in-state rates vary widely from the rates for calls between states. For example, 10-10-345 has a 5-cent-per-minute in-state rate for California, Illinois and Michigan, while Florida is 8 cents, New York and New Jersey 7 cents and Texas 15 cents.

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