Sorry Californians, AT&T Will Raise Your Rates Unless You Sign Up For Bundled Services

AT&T has raised the price of call waiting, call forwarding, and caller ID by $1.01 per month for all California customers that do not subscribe to a service bundle. This marks AT&T’s second rate hike since the California Public Utilities Commission stopped regulating phone rates last summer in the name of “promoting competition.” AT&T is not hesitant to admit that the rate increases are designed to prod consumers into signing up for bundled phone and internet packages:

“Prices for wireless and high speed internet are declining, and the fact that you have bundled offers provide tremendous value,” said AT&T spokesperson Gordon Diamond.

According to AT&T, which serves 80% of the California market, only 30% of customers are affected; so why all the fuss over a $1 increase? According to the Bill Nusbaum, the head of The Utility Reform Network, this is just another selfish ploy to improve AT&T’s bottom line without providing any additional value to customers:

“Its a line of code in their switches. There are no trucks to roll to the customer. There is little they have to do to provide the service. So it’s all profit,” Nusbaum said.

Consumer Groups: Customers Being Nudged to Bundle [KABC]
(Photo: mrbill)


Edit Your Comment

  1. jacques says:

    I guess deregulated phone service is working out for californians as well as deregulated power is. Do customers actually have a choice of local phone over copper (as in not from cable or voip)?

  2. MickeyMoo says:

    I think SBC (AT&T’s predecessor) was sued numerous times for actively trying to foil competitor installations that still operated over their trunk lines. A friend of mine tried to switch to Sprint when they offered local service and it was such an ongoing nightmare that he ended up going back to SBC. Verizon is actively ripping out copper as they install FIOS. AT&T is only offering U-Verse in cherry-picked high income areas. The Ma Bell breakup was supposed to offer competition and choice – yet we’re down to just 3 major phone companies ([]) – what we ended up with is the illusion of choice, and a monumental waste of shareholder value in the form of re-branding efforts. (don’t even get me started on Palm…)

  3. ptkdude says:

    Not to defend AT&T (or any company that charges for a service that exists in their systems), but the fact that Caller ID is just a setting in their switch is irrelevent. Caller ID is a service that many people feel is worth paying for. No one is requiring customers to have Caller ID. If they disagree with the price increase, all they have to do is have caller ID removed from their service.

  4. ptkdude says:

    @MickeyMoo: Regarding the breakup of Ma Bell, AT&T was not divested because they offered service everywhere nationwide. AT&T was broken up because it was vertically integrated.

  5. haroldx says:

    There is a choice of carriers, at least here in Los Angeles. My DSL is Earthlink (a chamber of horrors I wish on nobody), over AT&T lines and maintained by a third party.

    As for “de-regulation” — is there a case where that has actually benefited the consumer?

  6. MickeyMoo says:

    re: PTKDUDE’s comment

    I agree with you in principle. But I have a few issues with the way Caller ID blocking is implemented by AT&T (and presumably other carriers) Blocking is “opt-in” so that you have to call/write them in order to get your number not to transmit Caller ID information. They take longer than necessary to implement the requests, and even if you opt out, your Caller ID is still transmitted when you dial an 800/888 number. AT&T claims that this is due to legacy infrastructure, though I suspect it is more about the revenue stream generated by billing call centers for the data provided. It seems to be a system geared more to the convenience of larger commercial clients than protecting the privacy of the average subscriber.

  7. Melov says:

    Whats the big deal about calling someone and not allowing them to see who you are? Do you want to suprise them or something?

  8. MickeyMoo says:


    There really isn’t one – I love that my local pizza place knows that I’m calling before they pick up the line. I’m not a tin-foil hat wearing, compound dwelling, conspiracy theorist – but I think ultimately should be my choice whether or not I want my information given out. And the deck seems to be ever increasingly stacked against that. I guess it’s the theoretical principle about it – and that it’s a muggy sunday and I ran out of everything but decaf. ;-)

  9. calvinneal says:

    Incoming Caller i.ds are my protection. I don’t answer the door for Mormons, other religious fanatics and cold call salesmen. My phone is just another front door to my house. Personally, I do not answer a call that is i.d. blocked.There is an ATT service called privacy manager which screens for blocked calls and then sends the call to voice mail. Its cheaper and easier to screen calls manually.

    In my state, outgoing i.d. blocking is free, cannot be ordered carte blanche and is as simple as *67 and waiting for the second dial tone. Blocking caller i.d. is about the same as knocking on my door with a mask on. It tells me the caller is a. rude and b. probably hiding their real idenity.

  10. EtherealStrife says:

    @calvinneal: Simple solution: don’t answer. I NEVER answer the door unless someone calls ahead, and all calls go through the answering machine unless I’m expecting a call. No caller ID required. If the caller is comfortable leaving information then cool. Caller ID is a form of snooping as far as I’m concerned, and my line is blocked and unlisted. Saved me from some freaky bar/party callbacks on more than one occasion!
    @MickeyMoo: Yea I noticed that BS when companies knew the phone number I was calling from. Thanks for reminding me, I’ve gotta get up in some CEO’s face over that.

  11. LatherRinseRepeat says:

    I have to agree. There is little or no network overhead involved with CID. Same with SMS on cell phones. This is pure profit for these telecoms. Ohh.. I meant telecom, non plural.

  12. Rusted says:

    @EtherealStrife: I agree and will go even further. Only reason I have a land line for my DSL. No working phones on it. Cell is what I use.

  13. ThyGuy says:

    I refuse to answer the phone if I see someone has blocked me from viewing their information. The company I work at has it set up that if you call and have blocked your information, you will get a snooty voice message asking to unblock your calling information and please call again.

    If residents don’t have a problem with making their information unavailable, then why is it suddenly a uge problem when a company does the same thing? Kinda ass backwards IMO.

  14. ptkdude says:

    @LatherRinseRepeat: Actually, there’s an entirely seperate system to handle text messages, and that system costs money just like the voice switches. Each data platform can handle only so much traffic. Once the amount of traffic overloads the existing infrastructure, additional equipment must be purchased, which of course costs more money. Also, the switches require electricity to run, and electricity is getting more expensive.

    Your one single text message doesn’t overload the system, just as no single drop of rain is responsible for a flood.

  15. bostonguy says:


    I think there can be a modification to that wikimedia graphic of the RBOCs. I don’t know what was in New York before Nynex, but New England had NET&T, at least until around 1994 or so (I remember writing checks for my roommate to pay the phone bill around that time).

  16. ptkdude says:

    @bostonguy: NET&T had already been absorbed into NYNEX when Verizon was formed.

  17. TPK says:

    Caller ID has certain similarities to “touch tone dialing”, for which the Bell Systems managed to charge an extra fee for several decades before it became standard service. As long as people pay, they will charge.

    Bill Gates would probably charge you to turn on certain Windows features (similarly built in, but just need to be activated) if he could figure out how to force payment.

  18. ptkdude says:

    @TPK: Bill Gates has already figured that out, as evidenced by the, what, 5 or 6 different versions of Vista!

  19. dbeahn says:

    @TPK: “Bill Gates would probably charge you to turn on certain Windows features (similarly built in, but just need to be activated) if he could figure out how to force payment.”

    Where have you been since 10/24/01? Under a rock? I present to you Windows XP home, and Windows XP Pro. Later expanded to include Windows XP Media Center Edition.

    Evolution of concept: Vista Basic, Home Premium, Business, Ultimate…

  20. floofy says:

    I didn’t know anyone still had landlines.

  21. Major-General says:

    @haroldx: Electricity in Pennsylvania went from ~10% over the national average to ~10% below.

    Of course, California is so beholden to its special interests it never figured out how to de-regulate anything. You want good de-regulated phone service, move to Kansas. The small town I lived in offered a dozen choices for local service before SBC (AT&T) offered DSL.

  22. FLConsumer says:

    MickeyMoo: Be glad you even have the option of disabling CallerID by writing to them. The Florida Public Service Commission prohibits telcos operating in FL from allowing customers to opt-out of sending CallerID data. You’re allowed to dial *67 for every single phone call, but that’s it.

    Hence why my communications go VoIP through a non-Florida company.

    The more the landline telcos keep raising rates, the more people will be dropping away from them and going to VoIP, cellular, and cable co VoIP.

  23. catnapped says:

    @Major-General: Unfortunately most people in Pennsylvania are going to be socked with 50+% increases in their electric rates within the next 3-5 years

  24. homerjay says:

    @floofy: I’d love to get rid of my land line but my house is a virtual cellular black hole. I walk 20 feet from my house and I have service, inside and around- nothing. (no aluminum siding)

  25. hypnotik_jello says:

    Homerjay: try any voip solutions?

  26. bohemian says:

    Our previous cable provider decided to unbundle our bundled service of course without telling us first. I double checked and they did quit offering the bundle most people used, digital cable and broadband. Now you either pay extra or have to get a plan that includes phone of course at an extra cost.

    I would block all unidentified calls but my kids school only allows them to call home on a caller id blocked phone line. My doctors office also only calls on a blocked line. I wish there was a way around this to avoid unwanted calls but still receive the ones I need to.

  27. creamsissle says:

    AT&T lost my Caller ID revenue when they attempted to charge me a service transfer fee upon moving to a new apartment. (This was in addition to the transfer fee for the phone line, mind you.) I canceled my Caller ID and also changed from a flat rate plan to a message rate service, truly making the landline a bare bones backup.

  28. forever_knight says:

    @Major-General: energy deregulation is a huge scam. it always results in higher prices to consumers, despite the promises give to the public to approve the scheme. see Texas for a recent example. prices up > 40% since deregulation. woo hoo! deregulation!

  29. homerjay says:

    @hypnotik_jello: Yah right! Sunrocket closes its doors without notice andd Vonage is only a lawsuit away from doing the same. I’ll keep my POTS for now…

  30. TheUncleBob says:

    If you don’t want people to know you’re calling them, then don’t call them. It’s that simple.

    Personally, I think all landline and cell carriers should allow customers to block incoming calls from numbers who have their infomation blocked. Why should I be disturbed by a caller who is to afraid to tell me where they’re calling from?

  31. Wubbytoes says:

    It seemed like as soon as phone rates were deregulated here in OK, the same thing happened and AT&T raised their rates. It’s ridiculous.