Long-distance pricing : Intralata, intrastate, interstate, and international calling

Even if your long-distance bill contains no errors, the pricing still makes the billing difficult to understand. Numerous factors, such as the following, affect the rates of a long-distance call:

The termination point of the call: Is it intralata, intrastate, interstate, or international?

- The time of the call: Is it peak or off-peak?

- Whether or not the call is outbound, inbound, or calling card;

- Whether or not the call is switched or dedicated;

- Whether or not a virtual private network is in place.

Intralata, intrastate, interstate, and international calling
Long-distance bills usually separate the traffic into intralata, intrastate, interstate, and international calling. Long-distance carriers’ international and interstate rates are listed in the tariffs they file with the FCC. Intrastate and intralata rates are listed in the tariffs filed with the state PUCs.

The interstate and international rates on one calling plan will be the same for all of a business’ locations. For example, a business with locations in Illinois and Maine will pay the same rate for interstate calls at both locations. The intrastate rates, however, will be different. Intrastate pricing is governed by the tariff filed with the PUC in that state. The carriers set these rates based on the economic, competitive, and regulatory influences in each state. Intrastate rates in Illinois are about $0.08 a minute, while in Maine they may be as much as $0.30.

Intralata calls on a long-distance bill will have their own rate. The local carrier normally carries these calls, but many businesses have moved this traffic to their long-distance providers. Many long-distance carriers use the same rate for intrastate and intralata pricing, but the traffic is usually still separated on the actual phone bill.

In addition to having long-distance traffic itemized by interstate, intrastate, and intralata, the phone bill will also have a section for international calling. Calculating the true cost per minute for international calls is difficult, because a different rate is used for each country, but the bill combines all the international calling together. To effectively check international rates, you must spot-check individual calls in the bill’s call detail section.

Call rounding
Long-distance rates may be whole numbers, such as 10 cents per minute, but more often they are expressed as fractional numbers such as 10.5 cents per minute. When customers double-check the rates on their long-distance bill, the rates are usually a little higher than the quoted rate.

Table 1 shows an example of call rounding. The customer was promised $0.069 per minute but is actually paying $0.071 per minute. On a large account, this 3% differential may be significant. If you have a legitimate error on your account, beware that your account executive may say, “The rates are a little high due to call rounding.” This can only be true if the differential is less than a penny. If the difference is more than a penny, you probably have a different error on your account.

Table 1: Call Rounding

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