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Regulatory News – State Regulators’ Group Chides IXCs on Billing Practice

Posted: 08/2001

Regulatory News

State Regulators’ Group Chides IXCs on Billing Practice
By Kim Sunderland

A new long-distance billing charge and the manner in which it has been imposed on customers equates to rate increases, says a group that represents state telecom regulatory commissioners. At the same time, the biggest of the Big Three IXCs is raising its residential rates.

In recent letters to the nation’s largest IXCs, the Consumer Affairs Committee of the National Association of Regulatory Utility Commissioners (NARUC, www.naruc.org), which lobbies on behalf of state regulatory commissioners, expressed concern regarding a new charge appearing on telephone bills, and how that charge is implemented without customer notification.

AT&T Corp. (www.att.com), however, was praised for giving customers advance notice of the new charge, and information on how to avoid paying the monthly fee, according to the NARUC committee.

Customers of Sprint Corp. (www.
sprint.com
) and AT&T now are being charged $1.50 per month if they receive and pay their long-distance charges with their local telephone bill. WorldCom Inc. (www.wcom.com) hasn’t instituted this charge on a nationwide basis so far, but it is considering such a move, according to the NARUC committee.

Many customers are uninformed or even unaware of this new charge increasing the likelihood that they don’t realize they can avoid the fee by requesting a separate bill or paying the bill online, NARUC’s committee says.

The NARUC committee has asked the IXCs to do a better job of informing their customers about the fee.

Meanwhile, the IXCs say they’ve instituted such a charge to offset the local telcos’ increased costs of billing services. But while the IXCs are charging less in many cases for individual calls, these hikes show that they’re definitely trying to make up for the loss, sources say.

And basically, such hikes don’t justify a separate line-item charge, the NARUC committee says, adding that it “amounts to a rate increase.”

“Consumer information is vital in a competitive marketplace,” the lobbyist group says. “Companies should compete on the basis of business practices and customer relations in addition to price.”

Some states require individual customer notifications before implementing new charges such as this on customer bills. However, such state regulations don’t necessarily apply to interstate long-distance services, the committee noted.

In related news, AT&T raised basic per-minute residential calling rates as much as 11 percent last month.

Effective July 1, weekday long-distance calls made from 7 a.m. to 7 p.m. rose to 30 cents a minute, up from 29.5 cents per minute. Weekday calls from 7 p.m. to 7 a.m. increased to 25 cents per minute from 22.5 cents, an 11 percent jump.

AT&T also increased by 10 percent its weekend rates under the basic plan for state-to-state calls, from 14.5 cents to 16 cents.

“Our new basic rates continue to be the lowest, on average, of the major long-

distance carriers,” Robert Aquilina, senior vice president of long distance for AT&T’s consumer unit, says in a statement.

Nearly half of AT&T’s long-distance customers will see their bills go up. These are the same customers who don’t make many calls and can’t afford such increases, consumer watchdogs say.

Meanwhile, the nation’s incumbent carriers say that such IXC phone-bill increases, coupled with increases for cable TV rates, show that there’s plenty of competition around the country.

But they, too, have applied to increase their basic rates in some parts of their regions.


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