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IP: WSJ on high telecom rates
From: David Farber <dave () farber net>
Date: Thu, 03 May 2001 10:56:13 -0400
To: <farber () cis upenn edu> Subject: WSJ on high telecom rates Date: Thu, 3 May 2001 09:49:02 -0400 Dave, With rate hikes popping up all over the place, I thought your readers might find this analysis by my colleague Rebecca Blumenstein interesting. (It's part of a special report on telecom in today's Journal.) Reform Act Hasn't Delivered Promises to Customers --- Bills for Phones, Cable TV Rise, Reflecting Array of New Fees And Dearth of Competitors ---- By Rebecca Blumenstein Staff Reporter of The Wall Street Journal If it feels like you're spending more money than ever to use the phone and watch TV, you're right. Despite the Telecommunications Reform Act's promise to unleash price-slashing competition in phone and cable-television service, most households today have no choice in either service, and when they open up their bills, almost everything is higher. For example: -- Basic cable rates on average have risen 33% since the act took effect in 1996 -- almost three times the rate of inflation. -- Prices for basic high-speed Internet access via digital subscriber lines are going up to about $49.95 a month from $39.95, thanks to increases by SBC Communications Inc. and EarthLink Inc. Today, Verizon Communications Inc. and BellSouth Corp. are expected to announce similar jumps. -- Earlier this week, AT&T Corp. raised its prices on Internet access via cable modems by $6 a month to about $45.95 a month. And AOL Time Warner Inc. has said it soon expects to raise AOL's basic $21.95 monthly rate for online service for the first time in three years. -- Local bills are ballooning due to numerous fees the Bells and regulators have slapped on or ratcheted up, while most basic phone rates remain regulated. In some of SBC's territory, voice mail has increased about 70 cents over the past year and now averages about $8 a month. National directory assistance increased 20 cents beginning this year to $1.10, while many local directory-assistance fees have jumped as well. Subscriber line charges, which cover the cost of the copper line connecting consumers' homes with the network, will go up in July to $5 per line, from the $3.50 level they were at just a year ago as a result of combining old fees. -- Where there is more competition, such as in wireless and long distance, prices are going down. But even long-distance companies, while charging less in many cases for individual calls, have made up for it in other ways. While rates have been falling for high-volume customers whose calling pattern fits well into a plan, many of these plans now carry a monthly fee of about $5 or more. And consumers can find they are making costly calls when using calling cards or an operator. For example, AT&T charges 45 cents a minute and a $2.99 service charge for those dialing its 1-800-CALL ATT service. Those who simply dial 0 and the phone number are slapped with a $4.99 service charge per call, plus a rate of 89 cents a minute. <<snip>> Best, Tom ---------------------------------------------------------------------- Tom Weber E-World Columnist The Wall Street Journal. 200 Liberty St., New York, N.Y., 10281 phone: 212-416-2207; fax:212-416-2653 e-mail: tweber () wsj com
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- IP: WSJ on high telecom rates David Farber (May 03)