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AT&T Rate Increases Coming
AT&T is jacking up phone rates for residents of Alabama, one year after state officials deregulated the Alabama telephone service marketplace based on the premise that competition would bring about lower rates for consumers, not higher.
Darrell Baker, director of the Alabama Public Service Commission’s telecommunications division, said telephone companies heavily promoted the price deregulation plan by claiming competition would keep rates down. An industry-friendly deregulation bill was passed in 2005 over PSC objections, and another bill the Alabama Legislature passed this spring expanded deregulation further.
Alabama residents will now pay for that free-market construct in a state with limited local line competition.
AT&T spokesman Hood Harris said customers with Basic Service, a single-line home phone, will see their bill rise 3 percent, from $16.95 per month to $17.45. Approximately 15 percent of AT&T’s Alabama customers have basic service.
Customers with AT&T’s deluxe plan, the Residence Complete Choice Package, will see an increase of 9.5 percent, from $21 per month to $23.
Harris blamed the increases on inflationary costs.
Baker was unimpressed with the rate increase announcement. “It doesn’t sound like the competitive market is having much impact,” he said. Baker expects other telephone companies in the state to quickly follow suit.
AT&T increased rates in 2008 by 4.1%.
Other stories of interest:
- Big Cable Tries to Squash Municipal Competition: Round One
- Unlimited Flat Rate International Calling Arrives for Just $5 A Month – Why Do We Need to Drop Flat Rate Internet Again?
- Past is Prologue: The Great Telephone Strike of 1886, When Bell Tried to Eliminate Flat Rate Pricing
- Department of Duh: Pew Study Finds Prices Lower for Broadband Where Competition Exists
- WGRZ Buffalo – Using a Price Protection Agreement to Protect from Rate/Service Changes
When will deregulation fanatics learn that deregulation only works when there can be viable competition.
I highly doubt the question of “how high is the barrier to entry for realistic competition if we deregulate this market,” is ever asked. If it is, then either the answer is ignored or someone’s lying because the barrier is too high for any realistic competition to emerge.
The incumbents always have the upper hand and can fairly easily quash any upstart that presumes to provide real competition. The upstart will be driven out either by anti-competitive pricing or through legislation pushed by incumbent’s lobbyists.
I’m not saying regulation is effective and should be proliferated, but deregulation for the sake of removing regulation is just as foolhardy and thick-headed as believing regulation will solve all our problems in every arena.
To promote competition but prevent market abuse by the largest players there needs to be a mix of limited regulation and controlled deregulation to allow real competition in the marketplace to take hold.