New Yorkers Save About $220 Million A Year
TRAC Urges Industry & Regulators To Speed Up Competition
Washington, D.C., - Full telephone competition saves consumers big money according to a new study completed by the Telecommunications Research and Action Center (TRAC) of the impact of deregulation in New York. New York is the first state where unlimited local and long distance competition has been allowed since the passage of the Telecommunications Act of 1996.
New telephone competition in New York has resulted in annual consumer savings of about $220 million, according to the TRAC study. About one-half of the savings went to residential long distance customers and the other half to local telephone service customers. "Competition is working in New York," according to Samuel Simon, Chairman of TRAC.
Earlier this year, TRAC released residential long distance and local price comparison charts for New York. The long distance chart included plans offered by Verizon (Bell Atlantic) and other major long distance carriers. The company won approval to enter the long distance business in December 1999. The local chart compared plans offered by Verizon with those offered by AT&T, MCI, RCN, MetTel, and Broadview Networks. TRAC's price comparisons are based on calling baskets that include telephone calls, directory assistance, calling card calls, regional toll calls, extra services such as call waiting and *69, and federal telephone fees.
"We came up with a range of savings based on TRAC's calling baskets," according to Simon. "Consumers who switched to Verizon for their long distance service will on average save between $46 and $120 a year. Consumers who now get their local service from AT&T, MCI or one of the other local service companies are saving between $66 and $97 a year on average."
"More precise estimates of long distance savings can be made by looking at actual customer bills," Simon added. "If most of those who switched to Verizon for long distance service are regular deal hunters, people who take TRAC's advice and always shop for the best plan, average savings will be in the low-end of the range. If Verizon's marketing is reaching those who have not done a long distance 'check-up' for a while or those who are still paying basic rates, then average savings will be higher. Savings are also affected by the volume of calls. Consumers with a high volume of local calls on basic service will generally realize greater savings by switching, while customers with more typical usage often can save more by staying with Verizon. Any way you cut it, consumers in New York are way ahead of those in the rest of the country."
New choices for consumers for local and long distance service are the result of the 1996 Telecommunications Act which opened local markets to competition and set the rules for local (former Bell) telephone company entry into the long distance market.
It is taking much too long for competition to reach every state. Unfortunately, local and long distance companies tend to blame each other for the delays. In one state the local company slow rolls the process, while in another, the long distance company may cause regulatory havoc. We have a system here that seems to reward gridlock. TRAC wanted to know what this regulatory gridlock was costing consumers. It is clear that consumers are saving millions of dollars on their local and long distance bills in New York, where competition is robust.
It is time for Congress to come up with a new solution. The state-by-state process is not working for consumers.
ABOUT TRAC
TRAC is a non-profit, tax-exempt consumer organization that works to help consumers make informed decisions about their long distance options. TRAC has published TeleTips™ for the past fourteen years. TRAC also provides an Internet-based long distance rate comparison tool called WebPricer on its web site at http://www.trac.org/.
The TeleTips™ New York residential charts include a complete listing of the national long distance residential plans and local service options. To obtain both New York charts, consumers should send $7.50 and a self-addressed, stamped envelope (SASE) with 77 cents postage to TRAC, P.O. Box 27279, Washington, DC 20005. To obtain either the long distance or local chart, consumers should send $5 and a SASE with 55 cents postage to the same address. Please specify which chart you would like.
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