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Landline isn't the only phone option out there
There's a chance phone rates will go up significantly in the next few years, so arm yourself by exploring the alternatives.
By LOUIS HAU
Published July 17, 2005
When the three major telephone companies teamed up on Tallahassee in 2003, they muscled through a rewrite of the state's phone regulations that gave them the latitude to raise rates higher and faster than ever before.
This month the State Supreme Court upheld those rate increases, which means that whether you use Sprint, BellSouth or Verizon Communications for your local service, the basic rate - the residence line charge on your phone bill - will go up significantly in the next few years.
The rules entitle phone companies to large rate hikes in their local rates over the next two to three years. Once those initial round of increases are completed, they'll be able raise their local rates by up to 20 percent a year without approval from state regulators.
Is there any way out for consumers? Perhaps.
A lot has changed in the telecommunications market since 2003. Cable companies Bright House Networks and Knology Inc. began offering phone service last year, creating a new level of competition for the traditional telephone giants. In addition, wireless carriers continue offering better deals on their calling packages. And, finally, the advent of "number portability," which means you can keep your phone number even if you switch services, has removed a significant obstacle for consumers interested in shopping for good deals.
Unfortunately for consumers, experts don't see any of these changes providing sufficient competitive pressure to keep the phone companies from taking advantage of their new-found authority to raise rates.
"Even though they say we have all these new gee-whiz technologies, they know it's not one-for-one, they aren't direct substitutes," said Tim Morstad, a policy analyst for Consumers Union, the publisher of Consumer Reports magazine. "Most traditional phone customers have enjoyed that service for decades and are likely to stay put."
So, what are these gee-whiz options? And why aren't they seen as direct alternatives to the traditional "landline" phone? We offer this guide:
First, a word about the tried and true
Different phone systems have different advantages and disadvantages, but there are two big ways in which the plain old landline phone leads the competition.
First, it remains the most reliable means of calling 911 in case of an emergency. Emergency operators can immediately trace the exact location of any 911 call made on a landline phone, and that sometimes is not the case with Internet phone providers and it's rarely so with cell phones.
Second, a landline phone won't be knocked out by a power outage at your home. Of course, there are caveats, as Floridians may recall from all those hurricanes. For one thing, those ubiquitous cordless phones go dead when the electricity is cut, so only corded phones continue to operate during a power outage. And if you've lost your electricity because of a tropical storm or a hurricane, there's a good chance your overhead phone lines were knocked out, too.
Phone service from your cable company
Perhaps the most potent alternative to traditional phone companies is what's available through cable television providers. Last summer, Bright House Networks, formerly Time Warner Cable, made good on its long-delayed promise to offer telephone service. Their system allows allows customers to use their existing phone to place calls over the Internet.
For $50 a month, Bright House phone customers can make unlimited local and long-distance calls to the United States, Canada and Puerto Rico. (The price drops to as low as $40 for Bright House customers who also buy other services from the company, such as cable TV.)
Typically, cable company phone service suffers from two weaknesses.
The first is that because the telephone connection requires an electrically powered high-speed Internet modem, cable telephone service goes out when the power goes out. The second issue for many cable company systems is that because the service relies on the Internet, it can be difficult for emergency operators to trace a call to 911. Bright House has solved that problem because its system has been set up so 911 operators can instantly trace emergency calls.
Unlike many of its cable company counterparts, Bright House doesn't require phone customers to buy a separate broadband subscription. But Bright House doesn't offer stand-alone local basic service. The only calling packages it offers include unlimited local and long-distance calling, which may be more than you need.
This isn't the case with the phone service launched last year by financially struggling Knology, which provides cable TV service in Pinellas County. Knology offers a local basic phone service and other calling packages. But Knology phone service doesn't send calls over the Internet, so it operates just like a regular landline phone.
Internet phone services
Internet phone services have proliferated like mushrooms in recent years. (Try typing in "Internet phone" in your favorite search engine and you'll be amazed at the choices.) The appeal is they often provide far lower rates and more advanced calling features than those available from a landline phone. Plus, you can set them up anywhere and it's possible to buy long-distance-only plans.
Most Internet phone providers offer 911 calling services that are inferior to what you get with a landline phone. But that gap is supposed to narrow by the end of November, when the Federal Communications Commission will begin requiring the most commonly used types of Internet phone services to improve 911 services.
But even the improvements will require customers to be conscientious about registering the right address that emergency crews should go to when a 911 call is made. In addition, you won't be able to make any calls, emergency or not, during a power or broadband outage. Finally, most Internet phone services require you to have broadband subscription, which in the Tampa Bay area usually costs around $35 or more a month.
Wireless service
Cell phones have become ubiquitous and are used by many thrifty consumers who make all of their long-distance calls on nights and weekends, when their calling plans provide unlimited calling.
But even with the recent increases in the number of "anytime" minutes included in most wireless plans, your cell phone remains a relatively expensive means of making local calls, especially if you don't make a lot of them. Business people who are on their cell phones all day can find cost-effective packages, but those packages include far more "anytime" minutes than most consumers need.
Of course, cell phones can be vulnerable to intermittent service, depending on the wireless signal strength in your area. In addition, you have to keep that little battery charged, which can be troublesome if the power is out for extended periods.
Minimizing landline phone costs
If you have decided to keep your landline phone, you may be able to lessen the effect of the coming rate hikes by taking a few simple steps.
First, review your phone bill and make sure you really use all of the nonessential options, like caller ID and call forwarding, that phone companies spend much of their time and money marketing to their customers. Delete those you don't need.
If you don't make many local or long-distance calls, don't be seduced into buying an "all-you-can-eat" calling plan that includes unlimited local and long-distance. The flat pricing can be a great deal for a household that makes lots of calls, but it can be very pricey for those that don't.
Second, cut your long-distance bill by using your cell phone on nights and weekends. Or, shop for a better deal. Sometimes the best rates are available via 10-10 dial-around plans see www.10-10phonerates.com) or calling cards, particularly those at Costco and Sam's Club. But examine them closely to make sure you understand the terms and the expiration dates.
If you decide to switch to using calling cards, make sure you delete your long-distance carrier on your landline phone. If you don't, you'll be paying twice.
Assistance for low-income households
Finally, low-income households are eligible for phone-service subsidies via the Lifeline and Linkup programs. Lifeline provides a monthly $13.50 credit toward landline phone service, while Linkup cuts the cost of installing phone service by 50 percent.
Households with an annual income equal to 135 percent of the federal poverty line can sign up for Lifeline or Linkup via the state Office of Public Counsel. To get information and an application, call public counsel toll-free at 1-800-540-7039.
Households that receive public assistance such as food stamps, Medicaid, public housing, supplement security income or other programs, can get applications by calling their phone company's toll-free customer-service line (Verizon, 1-800-483-3000; Sprint, 1-888-723-8010; BellSouth, 1-888-757-6500).
Louis Hau can be reached at 813 226-3404 or hau@sptimes.com
[Last modified July 15, 2005, 20:17:03]
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