California Consumers Paying High Price for Phone Company Deregulation Posted by Bob at 07/18/07 01:21 PM

It's been almost a year since California's Public Utility Commission voted to eliminate rate caps on the state's largest phone companies, buying into arguments by AT&T and Verizon that deregulation would drive down costs and improve services for consumers.

So what has really happened?

In the case of pricing for popular features such as call waiting and caller ID, prices actually are quite different than they were a year ago. They have shot up -- astronomically.

According to a new report by the Los Angeles Times:

* AT&T's monthly price for caller ID has risen 46 percent, from $6.17 to $9.00.
* Call waiting, speed dialing and other features cost 55 percent more, rising from $3.23 to $5.00.
* An unlisted number now costs $1.25 a month, a 346% increase over the previous charge of 28 cents a month.

AT&T controls about 65 percent of the California market for landline phones. Verizon, which controls about 18 percent of the market, has make similar price hikes in the last year.

The price hikes only apply to customers who have a landline and choose to buy their features on an a la carte basis. Customers who sign up for a bundle of services and/or calling features -- at a substantially higher price -- are not subject to the meteoric price hikes. At least not yet.

The price hikes might not be so infuriating were it not for the fact that it costs AT&T and Verizon virtually nothing to provide them. Virtually all wireless phone providers and Internet-based phone services offer the features for free, including the wireless divisions of -- you guessed it -- AT&T and Verizon.

It is an unfortunate fact that many telecom companies are ruthless about sticking it to their customers when they think they can get away with it. Regulators at all levels need to think about that the next time the telecom industry comes calling, seeking to shuck off regulation with some vague promises that consumers will benefit.

comments (2)

1 Posted by Bimba at 07/20/07 01:32 AM

Recently, I went to the local bill-paying office and discovered that I would have to make a separate payment to have the office actually receive my AT&T payment. They now CHARGE money to take your money for AT&T in Santa Cruz.

If it's a public utility, they should not be allowed to profit off taking the bill payment,whether it's a mail-in or a pay-in-person payment.

As I understand it, a public utility is "public" because the service it provides is deemed to be necessary to the smooth running of commerce and health & safety. It is so vital to the core societal interactions that it is regulated in order to monitor compliance, to assure subsidies for the poor, and to assure that access to the service is not limited to only the rich.

I don't think AT&T should be allowed to contract their bill-paying services to people who charge a fee to take their payments, since a landline is a necessity, especially in an earthquake, fire, car-hits-power-pole accident, mud-slide-causing rainstorm, or other emergencies that cause widespread power outages.

Just last year, PG&E was narrowly stopped from doing the same - whereupon you'd have had to pay TWO EXTRA FEES just in order to pay your bills.

2 Posted by Gloria J. O'Reilly at 08/10/07 04:05 PM

I'm 77. when everything was being deregulated in the 70s and 80s we were TOLD that competition would drive down prices. Yeah and Santa brings toys! Everything began to become more and more expensive and disjointed and scrabled. It got so you could barely read the bills. Ha! It was easier 25 years ago. Now, I need 3 Philly lawyers to decipher every bill; the websites are hard to use.