Californians Paying 115% More For AT&T Landline Service Than They Did Before Deregulation

Supporters of removing price caps on utility services claim that deregulation will ultimately result in lower prices and more competition. But a new report claims that when California ditched pricing regulations on landline phone service, it only led to huge bill increases for AT&T customers.

The San Francisco Chronicle reports that since the state’s Public Utilities Commission voted to deregulate phone pricing in 2006, the monthly charge for flat-rate landline service from AT&T has increased from $10.69 to $23. Meanwhile, customers who were paying $5.70/month for a plan that limited the number of monthly calls have since seen their bills more than triple to $18.35.

[NOTE: A rep for AT&T tells Consumerist that the reason its prices were so low when the price caps were lifted is because its rates had actually been frozen since 1994.]

In addition to those increases, the Chronicle calls out other instances in which AT&T is charging significantly more than it was 6.5 years ago:

Call-waiting charges popped almost 180 percent. Anonymous call rejection costs nearly quadrupled. Even flat-rate prices for the LifeLine Program basic service, discounted for California’s low-income households, have risen 28 percent.

Meanwhile, the paper reports that Verizon’s flat-rate service has increased by only 18% since deregulation.

Though the Chronicle does admit that AT&T’s prices were lower than its competitors before the PUC removed price caps, the rates charged by the Death Star now surpass other providers by anywhere from $2-$6/month.

There are those who believe that AT&T doesn’t really care if landline customers go away, as the company has made no secret of its desire to ditch its old copper-line network.

In a statement to the paper, an AT&T rep, who points out that there is a new monthly program with a rate of $19.99, writes:

“Californians have more choices than ever before in communications services, and our pricing has changed to fit the marketplace… Californians have a variety of choices for telephone service including wireless and (Internet calling), but AT&T wireline service remains an affordable option with service available for less than a dollar a day — and for low-income consumers for as little a 12 cents a day.”

However, a rep for spokeswoman for The Utility Reform Network in San Francisco counters that, with AT&T and Verizon controlling 97% of the landline market in California, there are nowhere near as many choices available to consumers as the companies would have you believe.

“The commission gave up its authority under the theory that consumers could vote with their feet and the market was competitive,” the rep tells the Chronicle. “But in reality most consumers are stuck with AT&T and stuck with these higher prices.”