AT&T; to raise fee for basic service

Lifsher is a Times staff writer.

Telecommunications giant AT&T; will raise its monthly fee for basic land-line residential telephone service 23%, effective Jan. 1.

The basic charge will jump to $13.50 a month from $10.94.

Monthly bills for customers with about half of AT&T;’s 6.5 million residential land lines in California will be affected by the change, spokesman H. Gordon Diamond said. The rest are part of phone-payment plans unaffected by the increase.

The new rate represents the first change in AT&T;’s basic service bill in 14 years and was authorized by the California Public Utilities Commission on Sept. 18 as one of the last steps in a deregulation process.


The PUC authorized land-line carriers to raise basic monthly fees by as much as 30% in 2009 and up to an additional 23% in 2010. Companies would be free to set their own rates beginning in 2011.

AT&T;, Verizon Communications Inc. and two smaller phone companies have contended that land-line phone rates should be set by market competition, just as they are for wireless service.

Consumer advocates denounced the AT&T; rate increase as unfair to low-income people, including senior citizens, who depend on the basic service and already are suffering disproportionately from the financial crisis.

The cost of operating AT&T;’s fixed-line network has been declining for years and construction of the basic system was paid for decades ago, said Michael Shames, executive director of the Utility Consumer Action Network in San Diego. “Prices should be lower, but they’re not because AT&T; is not competitive,” he said.

Verizon, the state’s second-largest fixed-line phone company, has made no decision about raising basic service fees in 2009, spokesman John Davies said. Verizon has about 4 million lines in California. Verizon charges $17.66 a month for basic service.

Two smaller Northern California carriers also have not set new rates. Frontier Communications Corp. charges $17.85 a month and Sure West Communications charges $18.90.

Even with the increase, AT&T;’s basic service will be “still significantly below every major provider in California and still one of the lowest in the nation, where the national average is $15” a month, Diamond said. Although it was authorized to raise monthly charges for basic service as much as $3.25, AT&T;’s 2009 increase will be only $2.56, he said.

The basic rates for so-called lifeline service for low-income customers will jump 64 cents a month, and “measured service,” which offers a limited number of local calling minutes, will increase $1.45 per month on Jan. 1, he said.

AT&T;’s new rates are typical of the PUC’s deregulation of California’s communications industry in recent years, said Mark Toney, executive director of the Utility Reform Network, a San Francisco-based consumer advocate. “What kind of example of robust competition is it when prices shoot straight up?” he said.