Long distance services that are NOT prepaid (calling cards, 1+ services, dial-around services) may charge you an activation fee to cover the cost of opening your account. This is legitimate.
With prepaid cards, an "activation fee" or "activation charge" just a way to cheat you out of some money. Here's how it works:
The first time you use your card, the value of your card is immediately reduced by the amount of this "activation charge".
For example, if you buy a phone card for $5.00 and it has a $1.00 activation charge, the card is really only worth $4.00. The first time you use it, in addition to the cost of your first call, you will be charged an additional $1.00.
Read the fine print! If you don't find it there, it could be anything!