Every year, Americans spend $92 billion on long-distance telephone calls. Yes, that's right, $92 billion. With that kind of money at stake, it's no surprise telecommunications giants such as MCI WorldCom and AT&T; Corp. aggressively are courting consumers with the promise of lower rates. The newest weapon in the marketing arsenal: 10-10 dial around plans.

Unless you've been in a cave for six months, you've seen the commercials. James Garner, Sugar Ray Leonard, Dennis Miller, and a talking dog all offering big savings on your long-distance bills. But how big and how real are the savings?

Consumer beware: It's a jungle out there. No two dial arounds are alike, and monthly fees and minimum talk times complicate the puzzle.

Time to do some homework. We took a look at some of the major dial arounds and talked to the experts. Here's what we found.
     Dial arounds can
     save you money
     on certain calls.
     But you have to
     know the rules
     of the game.

What is a dial around service?
A dial around is a long-distance service that allows you to bypass your regular long-distance carrier by dialing a seven-digit prefix, like 10-10-321 or 10-10-220. Keep in mind that a dial around allows you to switch long-distance carriers for a particular call only; you have to key in the code with every call you make.

What companies offer these plans?
Most major telecommunications companies offer dial arounds, even though they're marketed as off-brand discounted services.

MCI WorldCom owns Telecom USA, the marketer of
10-10-321, 10-10-220, and the 10-10-9000 directory assistance number. AT&T; Corp. owns Lucky Dog, which markets
10-10-345; Qwest Communications offers 10-10-432. Telco, marketer of 10-10-297 and 10-10-457, is a unit of Excel Telecommunications.

Are dial arounds a good deal for consumers?
Dial arounds can save you money on certain calls. But you have to know the rules of the game. 10-10-220's 99-cent rate for a 20-minute call is a good deal—unless you get an answering machine. Then you've just paid 99 cents for a minute—about 10 times what you should have paid.

To gauge your potential dial around savings, get a handle on what you're currently paying for long-distance. "The first thing consumers should do is get on a discounted calling plan," says Alex Everhart, spokesperson for the Telecommunications Research Action Center (TRAC), a nonprofit consumer watchdog group based in Washington, D.C. "It's simple to do and easy to save."

If you're not on a calling plan, you're paying the carrier's highest rates.

Are some dial arounds better than others?
Yes, but keep in mind that the best service really depends on your personal calling patterns: when and how long you talk. Where you call is a factor with in-state and international long-distance plans.

Money Magazine reports that 10-10-220 and 10-10-345 are better deals than the best-known dial around, 10-10-321. Still, the magazine suggests that neither plan beats the simplicity and overall savings you can get with a good calling plan that charges about 10 cents a minute and five cents on weekends—or less.

Kiplinger's Personal Finance Magazine calls PT-1 Communications' 10-10-868 one of the best dial around deals. The plan offers a 7.9-cent-per-minute rate any time plus a 3.9% monthly Universal Service Fund (USF) fee.
     "The first thing
     consumers should do
     is get on a
     calling plan."

What are some dial around pitfalls?
Watch out for monthly fees, minimum call lengths, high daytime rates and prizes. Some dial arounds tout low per-minute rates, but charge more for short calls. Examine in-state and out-of-state rates. Some dial arounds charge USF fees (3.9% to 4.9%); others do not.

Know the facts before dialing. Complicated rate schedules can make it difficult to track costs. For example, 10-10-321 has different rates for calls less than 10 minutes, calls more than 10 minutes, and daytime, evening, and weekend calls. In contrast, AT&T;'s plan offers a flat rate of 10 cents per minute any time (plus a 10-cent-per-call fee).

Which is a better deal? Depends on when you call. On weekends, you're better off with 10-10-321's 6.5-cent rate (calls more than 10 minutes; 15 cents for the first minute). On weekdays AT&T; costs less—unless you're calling after 7 p.m. If this sounds confusing, it is.

How do I know which plan is right for me?
Review your phone bills to determine your calling trends. When do you call? Weekends? Daytime? Are most of your calls out of state or within your state? What is the duration of your calls? Do you call overseas? International calls are one area where you can find bargains with dial arounds.

"It's not just the lowest cost per minute," Everhart of TRAC cautions. Make sure you factor all the fees into the equation.

Consumers need to develop a calling strategy to lower their monthly bills. Basically, that means using a dial around when it's cheaper to do so and avoiding one when it's not.

If you make a lot of calls during the day, look for a plan that offers a flat rate of 10 cents or less. Don't use a 10-10 plan with a minimum calling time if you frequently connect with answering machines and voice mail.

How can I get the best deal on long-distance?
Ask for it. Many telephone consumers pay too much for long-distance simply because they never ask for a better deal. Only 36% of Americans subscribe to a discount program, according to a recent survey by Yankee Group, a technology consulting firm in Boston.

TRAC's Everhart advises consumers to call their long-distance carrier's 800 number and ask to be put on a plan that best fits their calling patterns. If you already are on a discounted plan, ask if you're getting the lowest possible rate.

Shop around. Long-distance rates have plummeted in recent years, but consumers, faced with a dizzying array of choices, need to do their homework if they want to reduce their monthly bills.

And remember, you always can save by making your long-distance calls on the weekend whether you dial around or not.

What about directory assistance dial arounds?
MCI's 10-10-9000 is a directory assistance dial around. Callers get two long-distance listings for 99 cents, which is cheaper than dialing "area code-555-1212."

This automated service will ask you if you'd like to be connected to the number at no charge. Here's where you need to be careful, Everhart says. The connection may be free, but if you're not an MCI customer, you will pay a high per-minute rate for the call.

Where can I get more information about dial arounds?
You can obtain TRAC's Guide to Dial Arounds by sending $1 and a business-size, self-addressed, stamped envelope (55 cents postage) to TRAC at P.O. Box 27279, Washington, DC 20005. A report comparing residential long-distance rates is available for $5. Visit the TRAC Web site.

©1999 Credit Union National Association Inc.