Calls out of state are less expensive

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Why does it cost me more to call the next town than it costs me to call across the country?


A: You must have a separate long-distance plan. Some of them, particularly the cheapest ones, have an odd structure to their pricing that is a result of the difference between federal and state regulations.

For example, in New York state, the dominant phone company, Verizon Communications Inc., has a plan that charges 5 cents a minute for state-to-state calls, while in-state calls are 7 cents a minute.

Sprint Nextel Corp.'s Nickel AnyTime plan similarly charges 5 cents a minute state-to-state, but 10 cents a minute for in-state long-distance.

If you go to the cheaper, smaller providers such as Pioneer Telephone, the differences can be even more striking. It charges 2.7 cents per minute for long distance, but 5.8 cents for calls in New York state. Under this plan, it's cheaper to call from New York City to Sweden than it is to call Long Island.

The reason for the odd pricing is this: State public service and public utility commissions set the charges local phone companies charge long-distance carriers to connect in-state calls over their lines, known as "access" charges. Long-distance carriers pass those charges on to their customers.

Interstate calls are regulated by the Federal Communications Commission, which has taken a different tack from most states. Local phone companies are compensated for connecting interstate long-distance calls by charging their subscribers up to $6.50 per month per line. This fee generally shows up on bills as a "Federal Subscriber Line Charge." That's why the per-minute cost for such calls is lower.

The difference in the "access" charges wasn't as noticeable in the days when the cost of carrying a call across the country was high. The cost of the connection at either end was small by comparison.

Thanks to technology, though, it now costs close to nothing to carry a call across the country or even across the world. It's the part of the call that runs on local phone lines that's expensive.

"Access costs ... what carriers pay to have access to customers call by call ... are the largest cost to the end user for any toll call," said Verizon spokesman Jim Smith.

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