May 2000 Residential Chart Reveals Higher Fees and Surcharges Resulting in Bill Increases of Up to 50% in Less Than Six Months!

Group Urges FCC to Act

            The Telecommunications Research and Action Center (TRAC) released its May 2000 TeleTips™ Residential Long Distance Comparison Chart which shows significant increases in monthly consumer bills due to higher fees and surcharges. 

            "Most residential long distance consumers are paying between 20% to 50% more today than they were in December of 1999,” said Samuel A. Simon, Chairman of TRAC.  "While ads promote lower rates per-minute, the amount people pay at the end of the month is increasing.  This is because of skyrocketing rates for related services, such as directory assistance and calling cards; and because the universal service fees charged have also been increased."

            In a comparison of plans from the May 2000 TeleTips™ Residential Comparison Chart to the December 1999 chart, the results reveal that the bottom line costs at the end of the month have significantly increased, especially for AT&T and MCI Worldcom (see table below).

            "The trend seems to show that while the larger carriers have lower per-minute rates, they are increasing fees and charges for other services.  The smaller carriers have generally more moderate increases and in some cases have decreased their total costs," said KC Choi, senior research associate of TRAC.

            Despite the sharp upturn in cost among the major carriers, consumers can still save by considering the plans offered by other long distance companies.  Compared to last year, some plans by the smaller carriers cost less than they did in December 1999, which is an even better incentive to switch. 

            "TRAC constantly emphasizes the importance of selecting a long distance plan that fits a consumer's need," says Choi.  "With the increase in the fees and surcharges, it is even more crucial for consumers to look at alternatives." 

            Potential relief is in sight for some consumers.  The FCC may adopt any day a plan that will result in sharp reductions in costs for low volume consumers and drive per-minute rates down even lower than they are today.  “With the adoption of this plan, TRAC hopes that this upward spike in consumer cost will come to an end. We are pleased that the FCC has acted to adopt a plan that will for most consumers result in an immediate rate reduction of about $1.15 a month, and for the lowest volume users as much as $4.00 a month,” said Simon.

            The TeleTips™ Residential Chart carries a complete listing of the national long distance residential plans.  To obtain the chart, consumers should send $5 and a self-addressed, stamped envelope (SASE) with 55¢ postage to TRAC, P.O. Box 27279, Washington, DC 20005.

Table 1. Comparison of Monthly Bill Changes from December 1999 to May 2000:

*Rates for MCI were calculated by TRAC without the carrier's participation or verification.

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