Why are the rates for in-state (intrastate) long distance calls sometimes higher than rates for interstate (state-to-state) calls?
Intrastate long distance calls are generally more expensive because the cost of these calls includes not only the long distance (toll) rate, but also a “connection” fee on a per-call basis. For interstate long distance service, all customers pay a flat monthly fee. The fee is designed to recover the cost of the permanent connections between the customer and the interstate long distance network. (This is usually referred to as the Federal Subscriber Line Charge and is collected from all customers, whether or not they make interstate long distance calls.) For intrastate service, there is no such fixed “connection” fee collected from all customers. Rather, intrastate long distance users pay the actual cost of the connection for each call made, which, in effect, increases the rate.
