Local phone service refers to the services provided by phone companies that allow a customer to make calls within the same city or region, which is defined as the local calling area. What constitutes an individual local calling area is decided by the phone service provider.

Until a few years ago it was not possible to choose your local service telephone provider. However, the Telecommunications Act of 1996 opened up the telephone industry to wider competition and now it is possible for most people to choose a service provider that offers the best rates and service. Thanks to this act, consumers benefit from increased competition and now have better deals to choose from when it comes to phone services.

Long distance services were first offered in 1892 when AT&T built a long distance telephone network that was interconnected between New York and Chicago. Due to the limitations of the technology available at that time, this network could not be extended further. After the invention of loading coils, the network was expanded to Denver, in 1911. Following the development of audio technology in 1914, it was possible to make telephone signals reach each other from one coast to another. However, the first real-time long distance call was not possible until 1951, with the introduction of the direct distance-dialling feature of AT&T. This is also the first time an area code was used, which led to today's 10-digit phone numbers.

For a long time, long-distance carriers specialized only in providing long-distance services. However, with technological advancement most of the service providers could provide both local and long distance phone services to their customers. Joining the two services led to streamlined billing and better customer support. However, the current long distance market is fiercely competitive and using a separate service provider for long distance services can ultimately be cheaper because the providers are competing for business and tend to offer low-cost plans.

The main long distance service providers in the U.S. are Sprint, AT&T and MCI Worldcom. With the development and proliferation of mobile phone technology, mobile telephone service providers have been able to compete with the long distance service providers, providing customers low rates for local and long distance calls. This is one of the main reasons for the increasing popularity of the cell phones in the telecom market.