IP: WSJ on high telecom rates

[David Farber <dave () farber net>]

> 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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