Thursday, February 10, 2011

Paying the local piper

So you went  out  and  got yourself a local-access line for your  home or a slew of access lines  for your  business. Just  how much do you pay for the local calls  you place on those lines? Figuring  out  those costs is a little complicated.


The local rate category refers to the  immediate geographical area,  usually no more than a one- to two-mile  radius from the  telephone from which you’re placing a call. Your LEC may try to make the  local calling  service appear to be free, but  the  fees are built  into the  monthly line charges.

Then  there’s the  tricky bit about what  exactly constitutes a local call. The LEC’s customer-service people can readily specify what  your  local calling area  includes, if you ask. But they  are not  required to make you understand. You have  to ask them to put  it in writing  or refer you to existing documenta- tion that defines the  local calling  area  for your  area. Also, if you live in a larger  metropolitan area  (such as New York, Pittsburgh, or Dallas),  the  direc- tories provided by your  LEC have  maps that indicate what  areas and  prefixes make up the  local calling  area.

Why do you need to know your  local calling  area,  anyway? Because not know- ing can cost you big time.  Today,  if you’re  a residential customer, most LECs provide free local calling  service. The LEC calls this  unlimited local calling. People tend to interpret this  as unlimited free calling  within their local area.  But you want  to know a secret? LECs earn the  greatest revenue on local calls that terminate in the  local toll, regional, or in-state toll calling  areas.

Most callers do not  know the  difference between local unlimited calling areas and  local toll calling areas. The term local toll is ambiguous (and should be outlawed). As a result, customers often  think  they’re making free, local calls when in fact they’re paying  recurring minute usage charges for what  amounts to intralata or intrastate calls.  Because these “hidden” charges don’t  turn up until their next  monthly bill, they  may not  realize this  is happening until it is too  late. Because the  LEC is making  more  money from this  lack of awareness, don’t  hold  your  breath waiting  for them to clarify it for you.

For example, from my Pittsburgh downtown residence, I can call anywhere in the  immediate downtown area  for free, and  each call in this local area  can have  an unlimited amount of minute usage with no extra cost to me. But whenever I make a call to my doctor’s office in Murrysville, a Pittsburgh suburb 19 miles away, I am charged $.12 per minute. Hence  the  puzzling term local long distance.

Do not  be misled by all this  unlimited, free, local call mumbo-jumbo. If your  local service is free and  unlimited, it is because the  LEC has  every hope that you will make lots  of calls just  outside the  local area.  Then they can hit you with intralata toll charges and  laugh  about it all the  way to the  bank.

If you’re  a business, the  problem is even  more  acute and  costly. Businesses must pay recurring charges for calls in the  local calling  area. If you work in a business with multiple lines,  every  PSTN outbound call placed on your  busi- ness telephone is charged a variable per-minute rate based on the  destina- tion of the  call. In the  Pittsburgh region, for example, businesses often  pay $.05 per  minute for calls in the  local calling  area.  If you add  the  total cost of each POTS line to the  total minute charges for all the  local calls made on each POTS line in the  company within a given month, you can begin  to see exactly how much you’re  dishing out  for what  you thought was a free local area  call.

Even if your  company uses higher bandwidth transport lines  (covered begin- ning in Chapter 4) with an in-house telephone system, some LECs consider local calls from this  type  of line to be running on POTS-equivalent lines.  With that little semantic sleight of hand, they  still charge you the  local recurring usage charge on a per-line  basis.

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