"We're not getting that rate--let me tell you that," Grenier says.

Harvard's contract with MCI WorldCom is at least three years old, dating back to a time when phone companies were charging residential customers more.

"At that negotiation, we were trying to hedge against the rates going up, which seemed a possibility with changes to telecom company regulation," he says.

The strategy backfired. As the three major carriers became engaged in a bidding war for customers, the competition drove rates way down.

The HSTO keeps track of its revenue and adjusts rates accordingly, aiming to just break even, Grenier says.

"We're a non-profit organization, so if we're ever in danger of making any money we jump out and lower our rates," Grenier says.

Last year, domestic rates dropped and HSTO lowered international rates this August.

HSTO plots proposed rate changes against current calling patterns to forecast the impact on revenue. Models predicted a $300,000 drop after the domestic cuts and another $200,000 for this year's international cut.

These funds were used for projects such as the wiring of dorm rooms for the Ethernet. The completion of those projects made room in the budget for the rate decreases.

Grenier says connection fees and features are subsidized through the long distance rates, which are the only service on which the HSTO charges more than its costs.

While the HSTO is able to alter specific rates, it is ultimately constrained by a mandate for balanced budget and external costs that prevent it from being competitive with market offerings.

"Let me just say that we are going to be negotiating and re-negotiating our long distance carrier arrangements in the future--within the next year--and recent changes in the residential fees landscape are at the top of our agenda," Grenier says. "We'd like to be competitive against the current advertised residential market."

Yale Is The Worst

Other universities distribute their costs differently, but though they may beat Harvard on either domestic or international rates, none of the Ivy League schools surveyed by The Crimson is lower on both counts.

Only Yale has higher rates for both domestic and international calls.