On Sept. 1, AT&T Inc. will cut the number of free 411 calls offered to customers each month to one from three. At first glance, that seems like a fairly small thing.
But it reflects a bigger trend -- a systematic stripping away of phone services that once were provided free or for a nominal charge, and a steady increasing of fees for other services.
A couple of years ago, state regulators granted phone companies the freedom to price services pretty much as they pleased. The rationale officials gave at the time was that a competitive marketplace would keep prices low for consumers.
In fact, the California Public Utilities Commission's Division of Ratepayer Advocates found in a report last month that "significant rate increases" have occurred since then and recommended a return to price controls until more research could be done.
From 1984 to 1998, Pacific Bell (which would become SBC, which would become AT&T) allowed five free 411 calls per month. All additional calls were 25 cents each.
In 1998, the monthly allowance of free calls was reduced to three, and the charge for each one after that went to 50 cents.
"The price increase is necessary to cover the cost of doing business," a company spokesman said at the time. "Directory assistance has historically been priced below cost."
Not anymore. AT&T now charges $1.50 to look up local numbers and $1.99 for all others.
"The marketplace changes and you have to change your offerings," said John Britton, an AT&T spokesman.
He declined to elaborate on how the changing marketplace has forced AT&T to further reduce the number of free 411 calls customers get.
Perhaps he was referring to the fact that Verizon Communications Inc. used to offer four free 411 calls monthly, but in April it cut that to zero. Verizon charges 95 cents to look up local numbers and $1.50 for all others.
Whatever else, the changing marketplace has been lucrative for Verizon and AT&T.
Since price controls were lifted in 2006, the Division of Ratepayer Advocates found, AT&T has increased the average price of three-minute daytime local calls by 34%, evening calls by 92% and nighttime and weekend calls by 233%.
AT&T's fee for call waiting is now 86% more expensive, and the charge not to have your name printed in the phone book has gone up 346%, the agency found.
It said similar rate hikes were imposed by Verizon and smaller rivals Frontier Communications and SureWest Communications.
