Despite promises from AT&T and their astroturf friends that telecom deregulation would result in lower prices for Ohio residents, the company announced this week it was -increasing- prices for basic landlines — the service Ohio’s poorest rely on most from the phone giant.

AT&T Ohio residential customers are receiving notices with their recent bills that effective Jan. 7, monthly service will increase by $1.25, the maximum amount allowed under Ohio’s new deregulation law.  Before taxes, fees, and surcharges, Ohio phone rates for basic residential service will increase from $14.25 to $15.50.

It’s the fourth rate hike in four years for Ohio landline customers who were promised savings as a result of telecommunications deregulation.

But in fact AT&T’s lobbyists recommended and got language in the legislation that actually reduced the competitive test required for AT&T to win approval of rate increases.

Under old Ohio law, AT&T had to show they had at least five competitors in a service area; today that number has been reduced to just two, leaving virtually the entire state wide open to unfettered rate hikes.

“It is unfortunate residential consumers will have to pay more for basic landline service, especially during these difficult economic times,” Consumers’ Counsel Janine Migden-Ostrander told the Times-Reporter.

The Ohio Consumers’ Counsel tried to have the rate increase rolled back, arguing under the new law, AT&T Ohio failed to show proof that even two competitive services are available.

But AT&T’s lobbyists made sure the company really did not have to respond, because the new law provides for automatic approval if Ohio’s Public Utility Commission fails to deny rate hike requests within a 30 day window.  In this case, they did not rule on the Consumer Counsel’s appeal within 30 days, which effectively ceded the issue to AT&T’s favor.

While large numbers of Ohio residents continue to drop landline service in favor of cell phones or phone service from the cable company, Ohio’s rural and poor consumers are the least likely to cancel landline service, and face the brunt of the rate hikes, even as they cannot buy (or afford) products like U-verse AT&T said would be possible with statewide deregulation.