|
|
Press Release |
Contact: Janee Briesemeister or |
AUSTIN, TX - A bill passed by the Senate today lowering the price paid by long distance carriers to local phone companies in Texas is likely to benefit the more profitable high-spending business and residential customers at the expense of the large number of consumers who make few long-distance calls, Consumers Union says.
SB 560, by Sen. David Sibley, R-Waco, phases in lowered access charges over the next several years. Although the bill requires the state's largest long distance companies to pass the savings on to the residential customer class, it does not require that each residential customer receive savings. The companies are required only to show that the savings have been passed through on average. The bill discussed in the Technology and Business Growth subcommittee last week would have required the PUC to ensure that all the savings are not funneled to the lucrative, high-volume customers and that even customers on basic rate plans receive their share of access savings.
"The change between last week and this week means less money in the pockets of folks who make the fewest long distance calls," said Janee Briesemeister, senior policy analyst with CU's Southwest Regional Office. "If the only long distance call you make all month is from Marfa to Midland you're unlikely to see much if any difference in your long distance bill. The strategy for all of these companies is to target the big-spending customers and punish those who don't need a lot of long distance service or can't afford it. For example, AT&T just announced it will impose a $3 minimum bill, meaning customers pay the minimum no matter how few calls they make. Now those customers are not likely to see savings from access reductions."
Although the legislation extends the cap on local phone rates for another six years, it does not cap monthly phone bills. The maximum prices on popular services such as call waiting and caller ID will increase by 12 percent yearly (beginning when Southwestern Bell enters the long distance market, and sooner for other companies, such as GTE). Maximum prices can increase 12 percent each year without PUC approval. These services can only be provided by the same company who provides the local phone line to the consumer. The price charged for directory assistance will be capped.
"Ever since the state and federal governments began deregulating the phone companies, consumers have been nickel and dimed to death with new fees and surcharges," Briesemeister said. "Now this legislation is increasing prices in the name of competition. Monthly phone bills are going up for the same level of service. The state's telecommunications law was supposed to be about competition and lower prices, not escalating phone bills with no one to switch to."
The bill affects the pricing of other telephone services as well. Notably, all "data services" are classified as competitive and can be priced as high as the market will bear. However, the term "data service" is not defined and could possibly apply to home use of the Internet or fax machines.
"Will residential customers with second phone lines be asked if the line is for a teenager or to hook to the Internet?, asked Briesemeister.
