Pinching Pennies with Long Distance Service

For many companies, moving their long distance service to VoIP has eliminated most, if not all, of their long distance charges.  Before you take it for granted that you will never see a bill for long distance charges again, there are a couple of things you should understand.

First, there is still a lot of calling that originates or terminates the “old fashioned way”.  The call travels across the telecom infrastructure as a VoIP or SIP call, regardless of how it originates or terminates. 

What does this mean for your long distance service?

It might help to understand a bit about how the telecommunications companies actually process calls.

The dial tone you get when you pick up a phone line is provided by the telephone company but it is “interpreted” by your phone system.  There are a few “flavors” of voice services – analog, digital and/or VoIP SIP.  Since most businesses have some form of phone system, this should make sense.

When you place a call, the phone system converts it to something that the telephone company understands.  This gets a bit complicated as the lines can blur depending on the “flavor” of voice services you’re using.

Your call travels to its destination – faster than you can read this – and is interpreted again on the other end.  The less interpretation required, the better.  That would mean that the call originated and terminated on a VoIP capable phone system.

In this case, it’s pretty easy for the phone company to eliminate your long distance charges.  Still, there is a nasty little requirement that the telephone company on the receiving end imposes.  It’s a charge for terminating the call.

Typically, your long distance phone company will absorb these charges as long as they’re “within reason”.  So, what’s unreasonable?  Most telephone companies have a limit to the termination charges they’ll absorb and, from that point forward, they’ll pass the charges through to you.

This is prevalent for companies that have a high call volume into rural areas.  I will save the discussion about the effects of deregulation for a later date but, for these purposes, you should know that some companies are exempt.  And, when they’re exempt, they can charge whatever they want!  In many cases, they do!

So, when you’re working to control your long distance call charges, it’s important to know your calling history.  If you make calls into an area that is likely to generate surcharges, you want to know that in advance. 

Lastly, it’s still important to negotiate a low rate for the calls that do end up being charged at long distance telephone rates.  The pennies can really add up. 

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