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Press Release |
Contact: Gene Kimmelman, (202) 462-6262 |
"AT&T's new minimum charge is the latest example of telecommunications deregulation run amok, driving up prices for millions of consumers. AT&T joins MCI and others in driving up monthly charges for the 10 to 20 million households that make less than $3 a month in interstate long distance calls. This new charge is in addition to the approximately $2-3 a month in new fees (e.g., universal service, federal access) AT&T and other long distance companies added to consumers' bills last year. Consumers are now paying more than $1 billion a year in fees to long distance companies that have not been offset with lower per-minute calling charges.
"This signifies the end of the era when consumers could trust the per-minute rate advertised to be the entire charge for long distance service. AT&T and the other long distance companies have taken advantage of deregulation to drive up prices for low volume customers, making it necessary for consumers to spend more money to qualify for the benefits of long distance competition. Obviously, the low-volume end of the long distance market is not adequately competitive to hold prices down but policymakers have eliminated scrutiny of pricing. Consumers Union calls on Congress and regulators to ensure fair pricing for the 50 percent of consumers who generally make less than about $11 a month in interstate long distance calls.
"We applaud AT&T's effort to protect low income consumers through initiation of a lifeline fee-waiver program, but this does not make up for the overall unfairness of charging consumers for long distance service they do not use. It is time for policymakers to acknowledge that telecommunications deregulation is driving up prices for the bottom half of the consumer market and policies must be adjusted to deal with pockets of monopoly that rob consumers' pocketbooks.
"Last month the cost of relaxed cable television regulation rose to about $3 billion a year, a 24 percent price increase since passage of the 1996 Telecommunications Act. With in-state long distance prices up, billions of dollars in new fees on phone bills, and now AT&T's minimum monthly long distance charge, it is time to hold policymakers accountable for the fundamental flaws in a law that promoted industry consolidation and higher prices rather than true competition."
