Home » AT&T »Consumer News »Public Policy & Gov't » Currently Reading:

AT&T Gouges Californians With 25% Telephone Rate Increase

Phillip Dampier January 17, 2012 AT&T, Consumer News, Public Policy & Gov't 3 Comments

Years ago, phone companies could not simply raise rates willy-nilly.  They had to justify rate increases before an oversight body, usually on the state level.  But after spending millions to lobby state lawmakers to deregulate the phone business, AT&T is set to recoup their investment with a dramatic 25 percent rate increase for landline phone service in the state of California.

Some residential customers have kept basic landline service as a last resort, switching to “measured service,” where customers pay a small charge for every call they make or receive a calling allowance that covers several calls a day.  Measured service can deliver substantial savings over traditional flat rate service.  But now AT&T is targeting these “budget customers” for some stunning rate hikes.

Starting March 1st, AT&T is raising rates by nearly 25% for measured service — from $12.37 to $15.37 a month — a $3 increase.  After your calling allowance is exhausted, each additional local call will cost three cents per minute.

Customers with flat rate service will also pay AT&T $1.05 more — $21 a month (before taxes, fees, and surcharges) for basic flat rate, unlimited local calling.

Best of all (for AT&T), the company does not have to explain or justify the rate increase.  That attitude was evident when reading the Los Angeles Timesaccount of the rate hike, complete with an arrogant, shoulder-shrugging AT&T spokesman:

Lane Kasselman, an AT&T spokesman, said fees for measured and flat-rate calling plans are going up because, well, because.

“Goods and services go up,” he told me. “That’s how our economy works.”

The increase is expected to hit seniors and low income consumers the hardest — they are the biggest constituency of the 10 percent of AT&T customers who choose measured-rate, budget service.  They are also the least likely to have cut the cord on their traditional landline service in favor of a cell phone or competing Voice Over IP provider.

AT&T hints that the rate increase is partly to push customers into multi-service bundles that include phone, Internet, and television service.  By hiking the price of individual services, the bundled price suddenly seems to deliver the best “savings” for customers.

Critics call that price pumping — artificially raising the price of a-la-carte services to create phantom savings for the company’s higher-revenue bundled service packages.

A San Francisco advocacy group calls it something else.

“It’s extortion, pure and simple,” said Regina Costa, telecom research director for the Utility Reform Network, or TURN, a consumer group. “There’s no proof that these price increases are justified.”

Thanks to California’s deregulation of the landline phone business, no proof is required.

Currently there are 3 comments on this Article:

  1. siouxmoux says:

    I am glad I dump my ATT land line years ago. I will be saving over $40 dollars a mouth with these outrageous rate hikes

  2. Carla Amaral says:

    My residential ATT flat rate went from $21 to $23.

Search This Site:

Contributions:

Recent Comments:

  • Geoge: 1 TB is definitely better than 300 GB to allow subscribers to stream more hours of videos on Netflix. But I still prefer internet services with no dat...
  • Joe V: These ISP executives still don't get it that nearly all customers DO NOT want usage-based billing on last mile wireline. AT&T, Comcast, Centur...
  • Timothy James: Democratic Republic, ostensibly. The entire purpose of the FCC is to define the standards by which entities may and may not conduct electronic communi...
  • Scott: I would 100% recommend my ISP Google Fiber....
  • ryan gomez: Helpful piece . For what it's worth , people a a form , my boss used a sample document here http://goo.gl/VJYqp6....
  • Kyle: We never have lived in a Democracy. We live in a Republic. The federal government is supposed to protect individual rights defined in the Bill of Righ...
  • Timothy James: Well, it's a really dumb endgame, since the country will just end up like pre-1980s Africa. I'm not sure whether the Republicans have a plan beyond "c...
  • Timothy James: By that logic, the FCC shouldn't exist, because state and local laws conflict with federal laws by their very nature. As a federal institution they ne...
  • Timothy James: This move preempts any formal legislation from the FCC, allowing Comcast to lower the cap at their leisure. Meanwhile Republicans battle to strip the ...
  • Ava Cueto: Greetings Eufemia Deemer, my partner filled out a blank OPM OF-306 example here http://goo.gl/QmM7Ni...
  • Eufemia Deemer: Savvy comments . I am thankful for the information ! Does anyone know if my company might be able to find a fillable OPM OF-306 document to edit ?...
  • Jorge Schuldt: Savvy ideas - Incidentally if you want a a form , my boss encountered a blank form here http://goo.gl/J4D1Oz....

Your Account: