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Pro-Monopoly Illinois Commerce Commission Decision Forces AT&T to Raise Residential Local Phone Rates As of July 2

Posted on: Thursday, 1 July 2004, 06:00 CDT

CHICAGO, July 1 /PRNewswire/ -- AT&T said today it will have to raise some of its residential local phone rates as a result of a controversial order last month by the Illinois Commerce Commission (ICC) substantially increasing the wholesale rates SBC Illinois' charges competitive local exchange carriers (CLECs) for unbundled network elements or UNEs.

The ICC, in its June 9th order, raised by more than 30 percent the wholesale rates competitors must pay to lease parts of SBC's network necessary to provide local service to Illinois residential customers.

"We remain very disappointed with the ICC's order," said Mike Tye, AT&T regional vice president of Law and Government Affairs. "This huge increase in wholesale charges to competitive carriers is unwarranted and a devastating blow to the development of local phone competition in the state. This order is bad news not just for a substantial portion of our own customers but for Illinois consumers overall, who were just beginning to enjoy the benefits of local phone competition but now face higher phone bills."

"The Commission ignored thousands of pages of evidence that a substantial decrease in SBC's wholesale rate is warranted," Tye added. "The ICC further disregarded the recommendations of its own professional staff for a relatively modest $.26 increase in SBC Illinois' wholesale rate and its independent Administrative Law Judges for a $1.81 increase and granted SBC Illinois a totally unwarranted increase of more than $4 per line per month. Despite tremendous public opposition to the rate increase, the ICC has shirked its responsibility to protect Illinois consumers and bowed to SBC's demands."

AT&T will be forced, effective tomorrow (July 2), to raise rates by $4.25 a month for customers in its two very popular basic local calling plans and by $2.00 a month for customers in the company's five deluxe feature packages.

These price changes will not affect Illinois consumers who are enrolled in AT&T One Rate Advantage(SM), One Rate USA(SM), One Rate State(SM) and One Rate Local(SM) bundled calling plans.

AT&T believes that the Commission's order violates the wholesale pricing principles mandated by the Telecommunications Act of 1996 and is directly contradicted by the evidence before the ICC in this case. Consequently, AT&T plans to file, in the near future, a petition for a rehearing of this unfortunate decision.

About AT&T

For more than 125 years, AT&T (NYSE "T") has been known for unparalleled quality and reliability in communications. Backed by the research and development capabilities of AT&T Labs, the company is a global leader in local, long distance, Internet and transaction-based voice and data services.

AT&T 'Safe Harbor'

The foregoing contains "forward-looking statements" which are based on management's beliefs as well as on a number of assumptions concerning future events made by and information currently available to management. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside AT&T's control, that could cause actual results to differ materially from such statements. For a more detailed description of the factors that could cause such a difference, please see AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This information is presented solely to provide additional information to further understand the results of AT&T.

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AT&T

CONTACT: Mike Pruyn of AT&T, +1-312-230-4894, office, mpruyn@att.com

Web site: http://www.att.com/

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