This is often a question that will often stump a business owner who has a DS3 for the long distance telephone calls. Which is the best way to go? Which will make my DS3 long distance bill lower? Well, for each business, you could come up with a different answer. In some situations, it may make since to have one DS3 with flat rate pricing and one with a tiered rate pricing structure. We will go into some examples later, but first I would like to give the true definition of what a flat rate billing model and a tiered rate-billing model means according to the long distance companies.

According to the major long distance companies, a flat rate long distance DS3 is a billing model in which all of your interstate calls are billed at the same rate, let say 1.5 cents per minute. All of your calls that you make to another state (excluding Alaska and Hawaii) will be billed at the 1.5 cent per minute rate. The flat rate long distance DS3 model is the one model most people feel is the only billing model available to them because this is the only model they know because this is how their residential long distance calls are billed as well.

Long distance DS3s can be billed with the flat rate model or the more cost effective DS3 tiered rate long distance model. The DS3 tiered rate long distance billing model is not for everyone, but it is very beneficial to many companies who have certain calling patterns. We will get into which companies these are in another article, but for now, I would like to just give the definition of a tiered rate long distance DS3. A tiered rate long distance billing model according to the long distance companies is the process of billing the telephone calls not based on what state they are located in, but which telephone company owns the line that is called. Calls made to a Regional Bell Operating Company (or RBOC), are billed in what they call Tier A. (The major RBOC companies as of this writing are AT&T, Qwest, Verizon, and Cincinnati Bell) As of last count, about 82% of all landlines are with a RBOC company. Telephones that are not operated by a RBOC company are called Competitive Local Exchange Carriers (or CLECs). Calls made to a CLEC are billed at the Tier B and Tier C billing level. Tier B and Tier C calls are more costly calls per minute than the Tier A calls. This is because the CLECs charge more money than the RBOCs to terminate a call to a client.

Tier A rates for a long distance DS3 start at around 0.758 cents per minute which is in most cases 35-50% cheaper than the same call based on the flat rate billing model.

In summary, there are 2 different billing platforms to choose from when you are ordering your long distance DS3. A good agent ask you questions about your calling habits and recommend one over another based on several factors.

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