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The Cutting Edge | TELECOM TALK

AT&T Failing to Hold Line on All Prices

May 18, 2000|ELIZABETH DOUGLASS

AT&T Corp. spends millions of dollars advertising its latest low-rate long-distance plans. But you'll hear nary a peep about the price of calling-card, operator-assisted or collect calls.

Why? Because the cost for those calls is skyrocketing. In fact, prices are rising so much, so fast that unsuspecting customers can easily wipe out months of calling-plan savings with just one phone call using an operator or calling card.

The issue is not a new one--phone companies have long made up for discounted rate plans by hiking prices for other kinds of calls. But the subject is timely for Californians because AT&T--the nation's largest long-distance provider--will institute another round of big price hikes June 1.

Announced recently through newspaper advertisements, the new increase includes service-charge hikes of up to 230% and per-minute rate hikes of 17% to 97% over current prices. The rate increases are the third in 15 months, following similar price hikes instituted in March and November of last year.

The new prices, as in the past, primarily target customers who make calls using AT&T and other types of calling cards, as well as customers who make operator-assisted phone calls, including person-to-person, collect and other kinds of calls.

However, the June 1 increases also will hit customers who subscribe to AT&T's popular One Rate and One Rate Plus calling plans. AT&T will increase the per-call service charges for long distance 148%, to 99 cents, and for local toll calls 230%, to 99 cents.

The per-minute rate for the underlying long-distance call jumps 48%, to 59 cents, while the local toll rate rises 97%, to 59 cents a minute. Local toll calls typically cover a distance of more than 16 miles but do not rise to the level of long distance.

AT&T's new prices also include service charges for:

* The company's calling cards, which will rise to $1.25 per call for customer-dialed long distance and to $5.50 per call if an operator assists. The current prices are 99 cents and $2.95, respectively. Per-minute charges on both long-distance and local toll calls using the AT&T card will increase to 69 cents, up from 59 cents and 30 cents, respectively.

* Calling cards from a local phone company (such as Pacific Bell), which will jump to $4.95 per long-distance call (or $1.99 for local toll), and to $5.50 for long-distance or toll calls using an operator. The air-time rate will rise to 69 cents per minute for both long-distance and local toll calls.

* Operator-handled calls, which increase to $4.99 per use for collect calls or calls billed to a third party, up from $3.95, in the case of calls using an automated system. Live operator assistance bumps up the price to $5.50 for collect calls and $9.99 for all others. The per-use fee for person-to-person calls rises to $9.99. Air-time charges will be 69 cents a minute, up from 59 cents.

Payback Time: Customers of Sprint PCS Group have begun receiving notices of a proposed settlement in a 1999 class-action lawsuit that accused the wireless service company of fraud and miscalculating the duration of incoming calls.

Under the proposed settlement, Sprint PCS customers who subscribed before Oct. 1, 1998, will receive 40 free minutes of long-distance calling to anywhere in the United States (retail value $10, at 25 cents per minute). If the settlement is approved by an Oklahoma court next week, Sprint PCS will provide qualifying subscribers with free long-distance cards worth about $19 million.

Sprint PCS did not admit any wrongdoing under the settlement, but would pay $3.7 million in attorneys fees for the plaintiff, Sprint PCS customer Barry Cypret.

Wireless Mania, for Good or Ill: The number of mobile phone subscribers will reach 1 billion worldwide by September 2002, with 17% of the population using wireless devices, according to a new study from the Cahners In-Stat Group, a market research firm.

In the United States, the subscriber base for wireless phones is expected to grow by an average of 16.8 million new customers a year over the next five years, said Ray Jodoin of Cahners In-Stat.

Today, there are about 94.4 million wireless subscribers in the United States, according to the Cellular Telecommunications Industry Assn., an industry trade group.

*

Times staff writer Elizabeth Douglass can be reached at elizabeth.douglass@latimes.com.

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