Phone rate hikes have landline customers ready to cut the cord

AT&T customers report increases of as much as 50% since 2011. And the firm is not alone. Verizon also has been raising basic service rates.

Joseph Aguon believes in preparing for the worst. So even though he makes most of his calls using a cellphone, he maintains a landline at his home in the Fairfax neighborhood — just in case an earthquake or storm knocked out wireless service.

But Aguon, 61, is finally ready to cut the cord, not because he's less mindful of potential disasters, but because AT&T keeps jacking up his rates.

I've heard from dozens of AT&T customers in recent weeks about big jumps in their bills for basic landlines and measured phone service, which provides customers with a fixed number of local calls each month.

Phone rates: In the Feb. 12 Business section, a column about rising rates for basic telephone service said that Verizon had raised its monthly rate for basic phone service by $1.90 in 2010. The monthly increase was $1, to $20.91. —

Welcome to the exciting world of deregulation, where state officials allow phone companies to do as they please in hopes of encouraging a more competitive marketplace.

Quiz: How well do you remember 2012?

In Aguon's case, he paid about $20 for his landline in 2011. Last year, the cost rose 15% to $23. Now he's learned his monthly bill has climbed an additional 26% to $29.

That's a 45% rate hike in just two years. And did Aguon's service improve appreciably during that time?

"Not at all," he told me. "It's a landline. You call people. People call you. It's a landline."

Like Aguon, Peter Nardi, 65, maintains a landline at his Los Feliz home just to be on the safe side. His measured service plan cost $12 a month in 2011. It now runs $18.

"That's a 50% increase," Nardi said. "So I called AT&T to complain."

What did the company say?

"They apologized but said there was nothing they could do."

In fact, AT&T can do whatever it wants.

Since 2011, the California Public Utilities Commission has allowed phone companies to raise — or lower — basic phone rates whenever they choose, rather than seek approval from regulators. Since then, costs have steadily gone up.

Jarryd Gonzales, a Verizon spokesman, said the company raised its monthly rate $1.90 for basic phone service to $20.91 in 2010. He said the rate will climb again, to $22, next month.

"They're doing it because they can do it," said Bill Nusbaum, managing attorney for the Utility Reform Network, a San Francisco advocacy group. "The PUC has turned its back on the market."

That's not how AT&T would characterize things. Lane Kasselman, a company spokesman, defended the latest price hikes by saying they "reflect changes in the marketplace."