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1 Dear Consumer, Telephone service competition holds many benefits for New Yorkers. Significant changes are taking place in the world of telecommunications. Different companies are now competing to provide you with a wide range of exciting services, including Internet voice services, also known as Voice over Internet Protocol (VoIP). This is a technology that allows you to make telephone calls using a broadband Internet connection instead of a regular telephone line. This consumer guide provides suggestions on what to consider when choosing among companies, as well as answers to some of the most commonly asked questions. Garry A. Brown Chairman, Public Service Commission It s your telephone. It s your It s your call. choice. A PSC Consumer Guide Consumer Assistance New York State Public Service Commission 3 Empire State Plaza, Albany, NY Ask-PSC1 For more information or if you have questions For complaints about your local, regional or other in-state telephone service New York State Consumer Protection Board For complaints about your local, regional or other in-state telephone service, and telemarketing New York State Attorney General For complaints about telemarketing Federal Communications Commission For complaints about your out-of-state, long distance telephone service or cramming 8/07 10M

2 n Local calling area n Local toll or regional toll n Long distance in-state n Long distance out-of-state Make an Informed Choice More changes are taking place in the world of telecommunications. Different companies are now competing to provide you with a wide range of services, including local telephone service. Competition means new products and services, and better value for your dollars. Only you can decide what types of telephone services are best for you, your family or your business. So make sure to ask questions, and keep asking until you are sure of your choices. This guide is designed to make it easier to understand your options. Remember, It s your telephone. It s your call. It s your choice. Service Options: Know the difference n Basic local service generally includes dial tone that allows you to make local calls, and to receive calls. Your local calling area usually covers calls nearest where you live or work. Local calls usually are not itemized on your bill. n Local toll or regional toll service (also called local long distance or intra-lata) covers calls outside your local calling area, but within your regional calling area. (There are seven regional calling areas in New York State). n Long distance toll service covers calls that travel outside your regional calling area, either within New York State or out-of-state. n Other optional services can include caller ID, call waiting, directory assistance, inside wire repair plans, and special billing. Types of Local Service n Traditional Wireline: (also known as landline) This service uses in-ground and overhead cables to transmit local and long distance calls. Traditional service is a fixed service option which means it can not be used at any locat ion other than where it is originally installed. n Wireless: (also referred to as cellular or mobile) Wireless telephone service provides many features of landline while permitting the consumer movement over a wide area. Calls are made using a combination of radio waves and landline telephone structure. n Cable: Cable-based telephone service uses a cable company s network facilities to provide telephone service with features similar to those provided by traditional landline telephone companies. Like traditional telephone service, it is generally considered to be a fixed service in that it is intended to be used within limits of the original connection location. n Internet: Internet-based telephone companies generally use broadband connections (also referred to as high speed, cable modem or DSL services) to provide telephone service. 2

3 Thinking about making a change? We suggest you take these four steps, and use the worksheet on page Identify what you have now. First, look at your past bills and ask yourself these questions: n What s included in my basic local service? For example, can I make an unlimited number of local calls? n How many calls do I make in a month? n Where do I call? (local, regional, in-state long distance, out-of-state and international) n How long do my calls last and what times of the day and days of the week do I make them? n Do I make most of my calls to talk to others or to access the Internet? n Do I have any special calling plans and what kinds of savings do I get? n What other optional services do I have? n Do I have a wireless phone, Internet access, or a pager? n How much do I pay for all of these services, individually and combined? 2. Determine what you want. The next step is deciding whether you want different services. Again ask yourself: n Do I want new services? n Do I want to discontinue any services? n Could I use special services, like Lifeline, or services for those with hearing, vision or speech impairments? 3

4 3. Compare services and offers. Now you re ready to compare offers. Contact the companies that interest you by phone or on the Internet. Consider the questions below and use the worksheet on page 8. n What services and features are included in the offer? n Are these services offered separately or packaged together? n Is the local calling area the same as I have now? n Do I have to keep the service for a certain amount of time? n Is there a charge if I cancel early? n When will my service be started or changed? n What will be itemized on my bill? n Will I be billed a flat rate, or some other rate based on the number or length of my calls? n Can I keep my current telephone number if I switch to another carrier or type of service? n Will rates be different for local toll 4. Decide what to do. n You can keep your current company. n You can select a new provider. Contact the new company and request information in writing. n Even after you make a decision, continue to check your bills. (regional) calling, long distance calling within New York and long distance to other states? What is the rate for local calls? n Is there a monthly charge? n Will I be billed for a certain minimum number of minutes/calls each month? n Is there a maximum number of minutes/ calls each month for which I can get the quoted rates? n Are these special (introductory) rates that will change? n Is a deposit required? n Is there a fee for switching or changing my company? n Are there any other fees? n Remember, if you are not satisfied with your choice, you can switch to another company. 4

5 Frequently Asked Questions Q. Can I choose more than one company for different telephone services? A. Yes. Many consumers are now able to choose different companies for their basic local service, local or regional toll service, and long distance service. You may choose one or more than one company to provide all your services. Q. How can I make long distance calls? A. To make long distance calls from most homes or businesses, you can use your chosen long distance company. You can also use a calling card (prepaid or from a company that bills you), one of the advertised ( dial around ) services, or a toll-free telephone number that connects you to a specific long distance company. Tip! Some of the companies only offer plans that save money if you talk for a certain length of time or make a certain number of calls per month. Q. Do all local service companies list their customers in the telephone directory? A. The telephone numbers of people or businesses using traditional landline telephone companies will normally continue to be included in the same telephone book you currently receive. However, you should be aware that if you considering wireless or broadband telephone services, your number may or may not be listed in the directory. If you are considering switching providers, it is a good idea to confirm their policies regarding directory listings. Q. Can I retain my current telephone number if I decide to switch local service providers? A. Generally, if you switch from a traditional landline service provider to another without changing your address, you will be able to keep your existing telephone number. If you are moving, you will want to check with your new provider to see if you can take your number to your new location. If you switch to a wireless, cable or Internet service provider, you should check first to see if you can keep your current number. You should also check the company s policy regarding taking your number with you if you switch back to your original provider. Q. What company do I call for repairs if more than one company provides my telephone services? A. Call the company that provides your basic local service, which is responsible for maintaining service to your home or business. If you have a problem with your other services, contact the company that provides the service. Remember, you are responsible for the telephones, inside wiring, and jacks in your home unless you have a maintenance plan with your telephone company or an independent contractor. Tip! Before you call for help with repairs, make sure the problem is with company-owned equipment or facilities and not your phone or inside wiring. Try the phone at another telephone outlet in your office, home or neighbor s home. Q. How will I be billed? A. Billing methods vary among companies. Ask each company how you will be billed for services so you know what to expect. Q. Can I lose my basic local telephone service if I do not pay other charges, such as long distance charges? A. No. You can only lose your local telephone service if you do not pay local telephone charges. Failure to pay other charges, such as custom calling charges or long distance charges, may result in the disconnection of those particular services. Q. What should I consider if I want to use a wireless phone instead of traditional telephone service? A. Currently, your address and/or apartment number may not automatically be known by the emergency operator if you use a wireless phone to dial 911. Consider the quality of reception at your home or business and the rates for calls and features. Also, conversations on some wireless (and cordless) phones can be overheard on other nearby electronic devices. Tip! Using a wireless phone instead of a traditional phone may save you money if you move frequently. 5

6 Voice over Internet Protocol (VoIP) Source: Federal Communications Commission Web site: Internet Voice, also known as Voice over Internet Protocol (VoIP), is a technology that allows you to make telephone calls using a broadband Internet connection instead of a regular (or analog) phone line. Some services using VoIP may only allow you to call other people using the same service, but others may allow you to call anyone who has a telephone number including local, long distance, mobile, and international numbers. Also, while some services only work over your computer or a special VoIP phone, other services allow you to use a traditional phone through an adaptor. What is VoIP/Internet Voice? VoIP allows you to make telephone calls using a computer network, over a data network like the Internet. VoIP converts the voice signal from your telephone into a digital signal that travels over the Internet, then converts it back at the other end so you can speak to anyone with a regular phone number. When placing a VoIP call using a phone with an adaptor, you ll hear a dial tone and dial just as you always have. VoIP may also allow you to make a call directly from a computer using a conventional telephone or a microphone. How Can I Place a VoIP Call? Depending on the service, one way to place a VoIP call is to pick up your phone and dial the number, using an adaptor that connects to your existing high-speed Internet connection. The call goes through your local telephone company to a VoIP provider. The phone call goes over the Internet to the called party s local telephone company for the completion of the call. Another way is to utilize a microphone headset plugged into your computer. The number is placed using the keyboard and is routed through your cable modem. What Kind of Equipment Do I Need? A broadband (high speed Internet) connection is required. This can be through a cable modem, or high speed services such as DSL or a local area network. You can hook up an inexpensive microphone to your computer and send your voice through a cable modem or connect a phone directly to a telephone adaptor. Is There a Difference Between Making a Local Call and a Long Distance Call? Some VoIP providers offer their services for free, normally only for calls to other subscribers to the service. Your VoIP provider may permit you to select an area code different from the area in which you live. This means you may not incur long distance charges if you call a number in your area code regardless of geography. It also means that people who call you may incur long distance charges depending on their area code and servic e. Some VoIP providers charge for a long distance call to a number outside your calling area, similar to existing, traditional wireline telephone service. Other VoIP providers permit you to call anywhere at a flat rate for a fixed number of minutes. If I Have Internet Voice Service, Who Can I Call? Depending upon your service, you might be limited only to other subscribers to the service, or you may be able to call any phone number, anywhere in the world. The call can be made to a local number, a mobile phone, to a long distance number, or an international number. You may even utilize the service to speak with more than one person at a time. The person you are calling does not need any special equipment, just a phone. What Are Some Advantages of Internet Voice? Because Internet Voice is digital, it may offer features and services that are not available with a traditional phone. If you have a broadband Internet connection, you need not maintain and pay the additional cost for a line just to make telephone calls. With many Internet Voice plans, you can talk for as long as you want with any person in the world (if the other person has an Internet connection). You can also talk with many people at the same time without any additional cost. What Are Some Disadvantages of Internet Voice? If you re considering replacing your traditional telephone service with Internet Voice, there are some possible differences. Customers should consider these differences when evaluating VoIP service options. Some Internet Voice services do no t work during power outages, and the service provider may not offer backup power; Not all VoIP services connect directly to emergency services through 911. It may be difficult for some VoIP services to seamlessly connect with the 911 dispatch center or accurately convey the physical location of the 911 caller or identify the call as an emergency. For additional information, see gov; They may or may not offer directory assistance/white page listings; If you cancel your VoIP service, you may be charged full price to return to the local telephone company. Can I use my Computer While I Talk on the Phone? Yes. Can I Take My Phone Adapter with me When I Travel? You may be able to use your VoIP service wherever you travel as long as you have a high speed Internet connection available. In that case it would work the same as from your home or business. Does My Computer Have to be Turned on? Not if you are making calls with a phone and adaptor or special VoIP phone, but your broadband Internet connection needs to be active. You can also use your computer while talking on the phone. How Do I Know If I Have a VoIP Phone Call? It will ring like any other call. Currently, VoIP services are not under the jurisdiction of the New York State Public Service Commission. If you have any problems or complaints about VoIP services, you should contact the Federal Communications Commission at CALL-FCC ( ). 6

7 Common Telephone Terms (or dial around ) Service Dialing 1010 plus a three digit access code connects you to a specific long distance telephone company. Charges for these calls appear on your local bill. Caller ID This service lets you see the number, or the name and number, of an incoming call. Calling Card This service allows you to place a local, regional or long distance call, without the call being billed to the telephone line you are using. Charges for calling card calls appear on your regular bill. These cards can be obtained from phone companies. Prepaid calling cards, which are paid for in advance, prevent charges from showing up on your bill. These cards are usually available from your telephone company, and at many stores and other locations. Call Return This option allows you to call back the last number that called you, whether or not you answered the call. Call Waiting This service lets you know someone else is calling, when you are already on your telephone line, by making a beep sound. Directory Assistance This service is provided by a number of sources, including telephone companies, Internet-based companies and other advertised directory assistance companies. The service allows you to contact the company s operator to request the telephone number of a residence or business. Companies may charge different rates for local and national listings and for call completion, i.e. automatically dialing the requested number. Lifeline Discounted telephone services for qualified lowincome customers. Number Portability The ability of consumers to retain their telephone number when switching from one telephone service provider to another. Three-way Calling This service lets you talk to two other people at different telephone numbers at the same time. Toll-free Numbers This service allows callers to reach your home or business and have the charges billed to the called number. The call can go through without using an operator. These numbers begin with area codes 800, 877, or 888. Voice Mail This service allows callers to leave messages while you are unavailable without the need for an answering machine. Wire Maintenance Plans These are optional repair plans for the telephones, inside wiring, and jacks in your home or business. Wireless Telephone Services These services include telephones known as cellular, PCS or mobile phones. Services also include pagers ( beepers ) that let you know someone is trying to reach you, even when you are not near a telephone. Explaining Fees, Surcharges and Taxes on Your Phone Bill In addition to the charges you pay for the services you use, you ll find various fees, surcharges, and taxes on your bill. The Commission has recommended that companies include thorough and detailed descriptions of all taxes, surcharges, and other fees on their web sites, including the purpose of each item, and routinely remind customers on bills that this information is available. Additionally, companies may link to the Department s web site, where an appendix of taxes and surcharges is listed. New York State Gross Revenue Tax Surcharge This surcharge recovers telephone company expenses associated with mandated New York State Transportation and Transmission Corporation Franchise taxes. It is applied to all services except the E911 surcharge. Federal Universal Service Fund Recovery Charge The Universal Service Fund is a federal program designed to provide phone service and access to the Internet to schools, public libraries and rural health care facilities, and to subsidize local service to high-cost areas and low income customers. Telecommunications companies with interstate operations are mandated by the federal government to contribute to the Universal Service Fund. The Federal Communications Commission (FCC) permits companies to use the FUSF surcharge to recover their cost of contributing to the fund. E911 Surcharge 911 has been designated as the Universal Emergency Number for all citizens in the U.S. to request emergency assistance. The purpose of the fee is to pay for the cost of such systems consumers do not pay this fee in order to be provided with E911 service. A consumer has access to E911 whether or not the locality in which the consumer lives has imposed the charge. There is no per-call charge for calling 911. This surcharge is a flat fee, not to exceed $.35 per phone line per month within each municipality imposing the surcharge, other than New York City. The City is authorized to impose a monthly charge of up to $1.00. Lifeline customers are exempt from the E911 surcharge. Local Number Portability Surcharge (LNP) This charge pays for the technology that allows customers to keep their phone number, at the same location, when they switch from one local telephone company to another. The FCC authorizes telephone companies to assess this monthly charge on a customer s bill for a maximum of five years. FCC Subscriber Line Charge (SLC) This charge is also known as Network Access Surcharge or Federal Line Cost Charge on some bills. The charge is a flat fee that customers pay to be connected to the telephone network. The charge is intended to cover a portion of the cost of your local telephone line, is added separately to local service bills, and recovers telephone company costs previously recovered from high toll rates. Metropolitan Transportation Authority (MTA) Tax Surcharge This surcharge recovers telephone company expenses associated with the mandated New York State temporary transportation business surcharge and applies to customers located in the New York metro area only. This surcharge is applied to all services except the E911 surcharge. Federal Excise Tax The Federal Excise Tax was introduced in 1898 by the federal government as a temporary tax to support the nation s efforts in the Spanish- American War. The tax revenue from this tax goes directly into the Federal General Fund. The tax rate is 3% and is applied to all local telephone services except installation charges. State and Local Taxes These are taxes paid by consumers and directly submitted to appropriate state, county, or city authorities. City school district taxes are also collected under sales tax law provisions. Taxes are applied to all intrastate services, except the E911 surcharge. Municipal Surcharge This surcharge recovers telephone company expenses associated with municipal revenue taxes which apply to calls originating and terminating within a village or municipality. The rate is not to exceed one percent except in Buffalo, Rochester, and Yonkers, where the rate may not exceed three percent. This surcharge is applied to all local charges, the LNP surcharge, FCC Line Charge, and Federal USF Surcharge. 7

8 Use this worksheet to compare the offers of different companies. Companies price services differently. For example, calls can be priced per minute, per call, by flat rate, by distance, by times of the day or days of the week. Prices also can vary depending on how these services are packaged or whether it s an introductory price. n Basic Local Service Monthly service charge Per-minute rates Per-call rate Companies: n Local Toll Service n Long-Distance Service Monthly service charge In-state rates Out-of-state rates International rates n Deposit required n Other fees (termination, switching, etc.) n Caller ID n Call waiting n Voice mail n Number portability Do you get to keep your local number if you get to switch/switch back? n Wire maintenance plans n Minimum monthly charges n Calling plans n Other Is 911 emergency service offered? 8

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