A group of state regulators is publicly chastising AT&T Corp., MCI WorldCom and Sprint Corp. for charging customers a new $1.50 monthly fee for the convenience of receiving local and long-distance charges on one bill.
The regulators said the new charge "amounts to a rate increase," and openly questioned the rationale and fairness of the fee, which has not been widely publicized until recently. The unusually harsh stance was outlined in letters from the National Assn. of Regulatory Utility Commissioners to the chief executives of the nation's three largest long-distance companies.
NARUC, an organization made up of state utility commissioners nationwide, criticized Sprint for enacting the surcharge in January without notifying customers or telling them how to avoid it. The group commended AT&T for sending out clearly written notices to customers before adding the $1.50 single-bill charge.
Because long-distance companies are regulated primarily by the Federal Communications Commission, the state group's criticism carries no legal weight. Still, NARUC's members routinely rule on matters of keen interest to all phone companies, and displeasing them carries with it some risk.
"We have no [regulatory] power, but I think what we've realized is that we're going to have to go to the public to tell them how these things work," said Diane Munns, an Iowa Utilities Board commissioner and a member of a NARUC committee that sent the letters. "I think $18 a year [for a combined bill] is a lot of money."
Representatives at all three companies declined to comment on the NARUC letter, which was publicly released Monday.
Sprint was the first of the three carriers to begin charging the $1.50 surcharge, adding it to customer bills in January. AT&T added the fee to some customer bills in April, and will add the fee to the remaining customer bills next month.
MCI WorldCom, the long-distance unit of WorldCom Inc., began to automatically send out separate bills to customers in several states earlier this year. Customers were not assessed the $1.50 fee unless they called the company to reinstate the one-bill option, according to MCI WorldCom spokeswoman Audrey Waters.
Waters said the company is considering expanding the practice to California and other states.
All three companies said the fee is necessary primarily to offset the rising cost of billing customers through local phone companies such as Pacific Bell and Verizon. They said Baby Bell companies are charging long-distance companies steadily higher prices to process their portion of the bills.
Gene Kimmelman of Consumers Union said he doesn't believe it. "The logic is just not quite there on this one. . . . If the cost of billing was the problem, I don't understand how sending a separate bill solves that."
He lamented that in today's deregulated market, "regulators are left to respond by just firing off a nasty letter, whereas in the past they would have had the authority to prohibit the charge or at least investigate whether it's fair and reasonable."
Even the FCC, in today's deregulated environment, has virtually no power to prevent companies from adding new fees or raising rates.
AT&T spokesman Mark Siegel said: "People don't have to pay this if they don't want to." AT&T and Sprint customers who are being charged the billing fee can avoid it by agreeing to receive a separate bill for long-distance calls.
Siegel added that AT&T would prefer to send its own bills so it can establish a direct relationship with its customers and avoid cohabitation with rival local phone companies, which are entering the long-distance business.
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The nation's top three long-distance carriers have begun charging customers $1.50 a month to continue receiving a single bill for local and long-distance services. Here's how you can avoid the surcharge:
* Request AT&T's free "direct billing" option by calling the company's toll-free service line ( 288-2455).
* Sign up to receive and pay your AT&T bill online by going to the company's Web site (www.att.com/saveonline). Customers who select this option receive a $25 gift certificate to Amazon.com and a $1 credit on each month's bill for a year.
* No action needed. In states where MCI has enacted the fee, customers are automatically switched to the free, separate billing option. Customers must call to request the single-bill option that triggers the billing fee.
* Sign up for online billing through MCI's Web site (mci.worldcom.com/for_your_home/products%2bservices/long_distance) and receive a $1 credit on each monthly bill. The discount is not available with some MCI plans.
* Spend more than $40 each month on long-distance calls. Sprint waives the $1.50 billing fee in such cases.
* Request a separate long-distance bill by calling Sprint's toll- free customer service line ( 746-3767).
* Sign up for Sprint's online billing option through the customer center section of the company's Web site (www.sprint.com/myaccount/ld) and receive $1 off or 30 free minutes on each monthly bill, depending on the service plan.
Sources: AT&T, MCI WorldCom and Sprint