AT&T; Raising Rates for Out-of-State Phone Calls

AT&T; Corp. on Wednesday said basic U.S. rates for state-to-state calls made from a home will rise 5.9% starting Dec 1., adding an average 60 cents a month to the typical residential bill.

The company said it is raising rates to pay for investments made to broaden its service line, build technical infrastructure and improve customer service.

The Basking Ridge, N.J.-based company is raising the cost of calls made with a calling card by 5% and those made with the assistance of an AT&T; operator by 2.6%.

It also said it will increase monthly fees on its Reach Out America, SelectSaver and AnyHour Saver calling plans. AT&T; said it stopped marketing those plans in 1993 when it introduced its True family of calling plans.

However, rates on the True savings plans will also rise, an AT&T; spokesman confirmed, because they are based on a percentage discount from the basic rate. The new One Rate plan introduced this fall, which charges 15 cents a minute for calls made to anywhere in the United States, will not be affected because it is a flat rate.

Consumer advocates said the move to increase rates shows that federal regulators need to speed up reforms to more fully open up long-distance phone markets to competition.

“Ever since the regulations have been relaxed, prices have been going up instead of coming down, said Gene Kimmelman, co-director of the Washington office of Consumers Union. “But in this political environment, it calls for aggressive action to bring new players into the long-distance market.”

Analysts said AT&T;’s rate hike appears to be a response to MCI, which last month informed the FCC that it would raise long-distance consumer rates by 4.9%, also effective Dec. 1. Sprint boosted rates by 2% in November for customers not enrolled in a calling plan.

An AT&T; spokesman denied that the company’s timing was tied to MCI’s; he called the timing of the announcement, just before the Thanksgiving holiday, a coincidence.

AT&T; shares rose 62.5 cents to close at $39 on the New York Stock Exchange.