WASHINGTON, D.C. - Higher fees, taxes, and surcharges are placing a greater burden on low-volume telephone users than ever before, according to a new study released today by the Telecommunications Research and Action Center (TRAC), the nation's leading telecommunications-focused consumer group. As we mark the tenth anniversary of the passage of the 1996 Telecom Act, the 47th edition of TRAC's popular TeleTips Residential Long Distance Comparison Chart, compares eighty-nine of the most popular stand-alone long distance and bundled local and long distance plans from the nation's leading telephone service providers. The framers of the Act promised that it would bring greater choices and lower prices to telephone consumers since long distance carriers and local phone companies would be able to compete for each others' business. TRAC compared the data from the TeleTips Residential Long Distance Comparison Chart released today with the chart we released in 1996 and found that for low-volume users especially, this has not been the case. Key findings of this comparison include the following:
"High-end residential consumers can afford the convenience of all-you-can-eat local and long distance bundled packages," said Samuel A. Simon, TRAC's founder and Chairman. "However, the typical low-volume long distance user is getting stuck with ever-higher fees, taxes, and surcharges that mainly serve to prop up the carriers' bottom lines." TRAC's TeleTips comparison chart helps consumers calculate the true costs of each plan based on a "shopping basket" tailored to their particular calling habits. TRAC's comparison chart also breaks down the features and services of each plan offered by the leading long distance carriers.
TRAC's study found that carriers' basic, or standard rate plans saw the greatest cost increase since the January 2005. Prior to the close of its merger with SBC Communications, AT&T raised the rates on its Basic Rate Plan by as much as 18.5 cents per minute, while increasing their discretionary carrier cost recovery fee by 50 cents. Before its merger with Verizon, MCI raised the monthly service fee on its Basic Dial 1 plan by $1.00 to $3.49 per month. MCI also raised its discretionary carrier cost recovery fee by 40 cents to $1.25 per month. In addition, the cost to use a calling card on a payphone increased dramatically as well, with pre-merger AT&T raising their payphone surcharge by 4 cents, BellSouth by 20 cents, IDT by 25 cents, SBC by 13 cents and Verizon by 26 cents. SBC also raised its discretionary "regulatory surcharge" from .15% to .782% of interstate and international charges. On a typical $20 long distance bill, that amounts to an almost 13 cents increase in monthly fees.
"If carriers can bundle telephone, wireless, data, and video services, why can't they bundle their costs into the rates their charge their subscribers instead of nickel and diming them to death with fees, taxes, and surcharges?" stated TRAC's Simon.
Tips for Choosing Long Distance Service
Source: Telecommunications Research and Action Center. http://www.trac.org