AT&T; Raising Rates on Some Long-Distance Calls, Services
California customers of AT&T; Corp. may soon be suffering from a new form of March madness--the kind that has nothing to do with college basketball but everything to do with long-distance phone bills.
That’s because the nation’s largest long-distance carrier is raising rates and service charges for a long list of services on both interstate and in-state calls--a potential double whammy for the company’s California consumers.
Most of the increases will hit customers who use a calling card or who make operator-assisted calls. But the company also increased per-minute prices for some of its service plans.
California’s long-distance market, worth an estimated $3 billion a year, is the largest in the nation, and AT&T; remains the dominant carrier in the state, holding more than half the market. The company has about 70 million long-distance residential customers nationwide.
The increases for in-state long-distance rates, which take effect at the end of the month, were disclosed to California customers in bill inserts. Inexplicably, AT&T;’s California notice said the rates must be approved by the California Public Utilities Commission--an agency that has no authority over AT&T;’s long-distance rates.
“My first reaction was bafflement, because every night I am barraged with advertisements by these companies talking about 10-cents-a-minute rates,” said Greg Kimble, a Los Angeles-area AT&T; customer who was alarmed by the notice about in-state price increases. “It took me half a day of calling bureaucracies just to find out something about what it meant.”
AT&T; has said the price increases are needed to offset higher costs, especially the increased expense of having operators handle calls.
But telecommunications industry watchers say that low prices in one service generally mean the costs will jump for other plans and services.
“We call this water-bed pricing,” said Robert Self of Market Dynamics, a Maryland-based publisher of phone-company price comparisons. “Press down on Sundays to go to 5 cents [a minute], and it’s going to go up somewhere else.”
For AT&T; customers, beginning earlier this month, “somewhere else” includes:
* Service charges for calling card calls under AT&T;’s One Rate and One Rate Plus plans. The per-call fee jumps to 99 cents, up from no surcharge just a few months ago and a 30-cent fee a year ago.
* Service charges for AT&T; calling card calls with operator assistance. The per-call fee jumps to $2.95 (using [800] CALL-ATT) and $3.45 (using another access method).
* Service charges for operator calls. The per-use prices increase to $3.45 for collect calls or calls billed to a third party, with automated assistance; $4.95 for operator-assisted collect calls; and $5.50 for operator-assisted calls with third-party billing.
* Per-use charges for person-to-person calls, busy-line verification calls (in which an operator checks a busy phone line), and busy-line interrupt services. Rates jump to $9.95, up from $6.75.
For long-distance calls within California, AT&T; will increase per-minute and service charges for many of the same categories of calls.
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The company’s in-state price hikes take effect March 31 and include these increases, among others:
* On operator-assisted calls, an increase to 30 cents a minute for California long-distance calls (now 8 cents to 20 cents for the first minute and 13 cents to 24 cents for subsequent minutes). On assisted toll calls, a jump to 20 cents per minute from the current range of 5 cents to 19 cents per minute, depending on the distance.
* A string of similar per-use service fee hikes similar to those being applied to interstate long-distance calls using operators or calling cards.
In today’s market, clear information about such price changes is hard to come by. Though California regulators require that notices be sent to customers for price changes that affect in-state rates, there is no such requirement at the federal level.
AT&T;, for example, is the only long-distance company that even bothers to print notices in newspapers. Federal law requires merely that long-distance companies file information about rate changes with the Federal Communications Commission--in pricing “tariffs” filled with language that is mostly incomprehensible to customers.
Such lack of notice makes it hard for customers to know the details of the service plans they sign up for. It’s also commonplace for long-distance carriers to refuse to provide customers with written verification of their prices.
Consumer groups have long pushed for better pricing disclosures to make it easier for phone customers to shop around among the many long-distance companies. Soon, they may get their wish--or at least part of it.
The FCC last week passed rules that will require AT&T; and others to make easy-to-read pricing and other information available to customers in at least some company locations. In addition, companies with Web sites must post the information on the Internet.
Buying long-distance and other phone service is different from buying most anything else, and it requires a good deal of effort by customers to make sure they are getting fair rates, said Self, the price comparison expert.
“Every time you pick up the phone, you are making a purchase, and there’s no real way of gathering current price information,” he said.
Self advises customers to shop around about every six months to make sure their calling patterns match up with their phone service plan.
“You need to stay away from expensive services like operator calls and calling card calls with high surcharges,” he said. “And make sure you’re sitting on the low side of the water bed.”
Elizabeth Douglass can be reached at elizabeth.douglass@latimes.com.
