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AT&T to Raise Its Rates: Texas Local Phone Customers Would See 4% Average Increase

Posted on: Saturday, 11 March 2006, 00:00 CST

By Terry Maxon, The Dallas Morning News

Mar. 11--AT&T Inc. said Friday it plans to raise Texas rates for local telephone service about 4 percent on May 2, affecting 30 percent of its customers statewide, including those in the Dallas-Fort Worth area.

AT&T spokesman Kerry Hibbs said the average bill would go up $1.90 to $2.65, with the average bill for Dallas customers up by $1.95.

Statewide, that's about a 4 percent increase on a typical bill of $54, he said.

"Keep in mind that this will be the first time we've raised basic rates in Texas since 1984, and our costs of doing business have gone up just like everybody else's," Mr. Hibbs said.

Consumer advocate Ed Mierzwinski of the Texas Public Interest Research Group said customers can expect more rate hikes as the phone industry consolidates.

AT&T has already swallowed up regional competitors Ameritech Corp. and Pacific Telesis Group and its former parent, AT&T Corp., and has proposed acquiring another regional Bell company, BellSouth Corp.

"The bigger the phone companies get as they put Ma Bell back together again, the more aggressive they will be in gouging the consumer," he said.

"I am not surprised at this, and we can only expect more of the same in the future and around the country," he said.

Mr. Hibbs said the price increase wouldn't affect people who have basic phone service with no additional features; customers age 65 or older with local basic service and one additional feature; or customers whose basic service is part of a package of services.

"We are going to inform our customers who are potentially affected by this of ways to lessen or offset or even save money," Mr. Hibbs said.

AT&T is using the authority granted it by the Texas Legislature last year to raise its rates in areas considered to be sufficiently competitive. That sweeping law, which also allowed telephone companies to get a state franchise to enter local video markets, deregulated "incumbent local exchange companies" like AT&T, formerly known as SBC Communications Inc.

Those local telephone companies as of Jan. 1 were free to set their own rates in markets of 100,000 people or more. Areas with less than 30,000 will stay regulated until Jan. 1, 2007.

Also, the Public Utility Commission can deregulate markets with 30,000 to 100,000 people if those markets have at least three competitors, including at least one competitor providing local exchange telephone service, one providing telephone service over its own facilities such as a cable company and a competitor offering wireless phone service.

Mr. Hibbs said the rate increases would be implemented in about 40 cities. About 70 percent of AT&T's Texas customers will not be affected because they're either in a smaller market without sufficient competition or qualify for the exemptions, he said.

E-mail tmaxon@dallasnews.com

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Source: The Dallas Morning News

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