Something About Phone Fee Explanations Rings Hollow

Communications giant AT&T; has just joined such other companies as MCI WorldCom and Sprint in charging most of its long distance customers a monthly minimum whether they make long distance calls or not.

At AT&T;, it is $3. The minimum at MCI and Sprint is usually $5.

This practice is growing as fast as banks’ ATM fees. The advocacy group Consumer Action reports: “The majority of calling plans surveyed last year had no recurring monthly fees. . . . This year, the number of plans with monthly fees or minimums has almost doubled.”

Why now? I asked AT&T; spokesman Mark Siegel. After all, it’s been 15 years since a court ordered an end to AT&T;’s monopoly.

“This is a ferociously competitive industry,” he replied. “In this environment, you have to behave differently than in a monopoly.”

But isn’t this disingenuous? Of the 900 companies in the long distance business, there remain many with no minimum usage or monthly fee.

Aren’t those the companies that are most competitive? The cheapest of them offer rates as low as 5 cents a minute for California calls and 8 cents a minute nationwide, 24 hours every day.

Siegel, to be fair, also meant competitive in another sense.

He said that as the old monopoly carrier, AT&T; is stuck with most of the low-usage long distance callers, and service to them costs $300 million a year. Although long distance revenue for AT&T; runs $23 billion, not charging a minimum would mean that frequent users would have to be charged higher rates to defray the $300 million, making AT&T; less competitive to them.

Still, Siegel added, AT&T; “has never said we were the cheapest and probably we never will be.”

He said 10.5 million of AT&T;’s 70 million customers seldom make long distance calls, and so could start having to pay for calls they don’t make.

But low-income people who qualify for state “life line” service will be exempted from the fees if they ask, he said, and those who don’t make $3 in such calls a month can ask their local telephone company to drop them from having any long distance carrier at all. There is usually a $5 fee for doing that.

Then, if they do occasionally make a long distance call, they can use the dial-around services, dialing a 10-10 access number. In AT&T;’s case, this is 10-10-345.

Although some 10-10 numbers carry their own monthly fees, at AT&T; there’s only a 10-cent connection charge for each call, and it’s then billed at 10 cents a minute.

Also, in place of taxes and fees charged by the long distance carrier, the local phone company will tack on a “presubscribed interexchange carrier charge.” This is $1.04 a month for Pacific Bell customers and 53 cents for GTE’s.

Summing up for AT&T; on instituting the minimum fees, Siegel declared, “There is no choice.”

How many times have we heard this facile explanation from political or business leaders?

But in this case, some companies aren’t charging the fee, AT&T; didn’t charge it for a long time and the Federal Communications Commission has just issued a notice of inquiry into the issue and solicited public comments. It sounds as if there is a choice.

Also, the U.S. Telephone Assn., representing local phone companies, has suggested that were more local companies, (such as PacBell), allowed to sell their own long distance service, “the pricing change [of] AT&T; . . . might have been very different.”

Obviously, this is complicated. In fact, Consumer Action’s 1999 survey on the charges of just 15 of the biggest long distance carriers (available on the Internet at www.consumer-action.org) runs 20 pages and would befuddle many of us.

Besides, there are 885 other companies, and pricing is changing constantly.

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As Times telephone beat reporter Elizabeth Douglass remarks, “the average Joe, even the above-average Joe, has a heckuva time with comparison shopping.”

Minimum usage fees are by no means, of course, the only billing issue. Frustration with ever-proliferating separate charges in telephone bills is growing.

Anthony Galloway, a USC undergraduate studying investigative journalism, recently listed--in a paper that his instructor sent me--11 fees, surcharges and taxes appearing on telephone bills today: federal, state and city taxes, a rate surcharge, an FCC fee, a devices fund, a state fee, a lifeline surcharge, a “high cost” surcharge, a teleconnect fund and a portability fee.

I checked it out on my own PacBell bill and found 10 of the items Galloway mentioned.

Complaints about phone bills are rife. For example, I was approached by two people recently with complaints that PacBell was deceptive in how it triggers charges for three-way, or conference, calls.

They had noticed these charges on their bills, and when they objected that they hadn’t made such calls, PacBell canceled them. But they surmised that such items often slip by without being noticed, so the company profits from the arrangement.

They were told that a phone user has to hold down the phone a few seconds between calls, or the system will register a conference call and levy a 75-cent extra charge.

When I called PacBell spokesman John Britton for comment, he tried to be reassuring. It is only 1.2 seconds that the phone has to be held down between calls, he said.

If you hear a stuttered dial tone, he added, it means you are deemed to be making a conference call. It takes 18 seconds to begin billing, so you could hang up during that time. In any case, watch your bills and if a charge shows up, ask PacBell to remove it, he said.

It sounds simple, but if you are frequently making such calls, I wonder how you know, without keeping a log of all your calls, which charges might be illegitimate. Even this could be quite complicated, as telephone services seem too often to be these days.

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Ken Reich can be contacted with your accounts of true consumer adventures at (213) 237-7060 or by e-mail at ken.reich@latimes.com.