New $4.00 fee to affect many AT&T subscribers

Prior to its merger with SBC, AT&T offered local phone service nationwide in competition with the incumbent regional Bell companies. In July 2004, AT&T announced that it was exiting the local residential telephone business, though it stated that it would continue to service its existing local service subscribers nationwide. It is these “legacy” AT&T local service subscribers who will be affected by a new charge that AT&T is levying, effective March 26. On that date a new Local Connectivity Charge (LCC) will be applied to all AT&T local service customers with the exception of those inside the pre-merger, 13-state SBC territory, as well as New York, Florida, and Georgia. The new charge, affecting subscribers in 36 states, will be as much as $4.00 per line of service. Subscribers in Alabama, California (former GTE local service area), Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, and Tennessee will get socked with the full $4.00 charge. Subscribers in the 28 other states affected by the new charge will see a smaller fee ranging from $1.40 to $3.50 per month. Consumers can check the amount of the charge in their state online by clicking here. According to postcards sent to subscribers affected by the new charge, AT&T says that the new charge will help the company recover “increased connectivity charges associated with providing local service,” and that the fee is not a tax or charge required by any government body. However, BellSouth spokesman Mel Richardson told TRAC that BellSouth has not raised or changed any connectivity charges that they assess AT&T for access to BellSouth’s local telephone network. For more information on the March 1 rate increases, check out the February 17, 2006 edition of TRACNotes.

Consumers have many other choices for phone service available to them including cable VoIP providers, third-party VoIP providers such as Vonage or Packet8, wireless phones, and PC-to-PC calling services such as eBay's Skype. Any one of these services may be cheaper than traditional wireline local telephone service.

Source: Telecommunications Research and Action Center. http://www.trac.org