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AT&T Raises Rate for Basic Service: PSC Approved 31% Increase That Affects 300,000 Customers

Posted on: Saturday, 20 May 2006, 03:06 CDT

By Doris Hajewski, Milwaukee Journal Sentinel

May 20--AT&T customers in southeastern Wisconsin who subscribe to basic service are seeing a 31.5% increase in the local line rate on bills mailed this month.

The monthly charge for basic telephone service is increasing from $8.20 to $10.78.

The price increase affects about 300,000 subscribers, based on information provided by AT&T last year, when the Wisconsin Public Service Commission approved the rate increases.

Prior to Dec. 1, 2005, the PSC had regulated AT&T's rates for basic service. But the telephone company sought relief in 2004 from the price caps, citing competition from other companies, including wireless providers, cable companies that offer phone service and voice-over-Internet services.

The PSC decision announced in November allows AT&T to raise the basic local line price in two of the company's rate group areas by $2.50 this year and next year. After Dec. 1, 2007, there will be no restrictions on rates for local lines in those areas.

The areas covered by the decision are in Milwaukee, Madison, and 15 of AT&T's 77 telephone exchanges. Those exchanges are in Appleton, Beloit, Eau Claire, Fond du Lac, Green Bay, Janesville, Kenosha, Manitowoc, Menomonee Falls, Neenah, Oshkosh, Racine, Sheboygan, Stevens Point and Waukesha.

The decision does not allow rate increases for other elements of basic phone service until December 2007. After that, AT&T may raise rates for residential local usage or message charges, Extended Community Calling per minute rate, residential service order charges and residential line connections charges.

Jeff Bentoff, spokesman for AT&T in Milwaukee, said the company hasn't made a decision on whether to raise rates on these other elements after December 2007.

"We will have to evaluate the market," Bentoff said. "We still have very good prices at this level and in our packages. There's lot of competition. The commission studied the market and determined that competition is going to protect consumers from unreasonable price increases."

In its decision, the PSC said phasing in the rate deregulation will "mitigate rate shock and lessen the impact on low income customers."

The Citizens Utility Board of Wisconsin had opposed the lifting of PSC regulation of rates for basic phone service.

"Our point was there is no one else offering that basic service," said the group's executive director Charles Higley.

The PSC disagreed, saying the other telecommunications options represented competition for AT&T's basic service.

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Copyright (c) 2006, Milwaukee Journal Sentinel

Distributed by Knight Ridder/Tribune Business News.

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Source: The Milwaukee Journal Sentinel

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