A study released today by the Telecommunications Research and Action Center (TRAC) found that consumers in California could save between $143 and $881 million on their local and long-distance telephone bills one year after increased competition in those markets. The study estimates annual local service savings ranging from $54 to $527 million and long-distance savings ranging from $89 to $354 million. The study predicts that 3.8 million local and 2.4 million long-distance telephone customers could switch telephone providers during that period. TRAC, the nation's leading telecommunications-focused consumer group, has been publishing long-distance rate comparisons for consumers and small businesses since 1984.

"A consumer who switches to SBC/Pacific Bell for their long-distance service could save as much as $12.15 per month. A consumer who switches away from SBC/Pacific Bell for their local service could save up to $11.40 per month," said Karen Walls, TRAC senior staff associate. "During these challenging economic times, that is a significant savings." TRAC undertook this examination of the California telephone market as a follow-up to its September 2001 multi-state study examining potential consumer savings in Pennsylvania, Illinois, Florida, and Georgia. California was chosen because TRAC was interested in investigating potential consumer savings in a large and heavily populated state.

The TRAC study projects that residential customers would benefit greatly from increased competition and choice in the California telephone market. "This study of the California telephone market illustrates how the addition of one competitor to the marketplace can result in significant consumer savings," said Walls. Even if the low range of savings estimates is used, California's consumers could save $7 million every month by switching to SBC/Pacific Bell's long-distance service and $4.5 million a month by switching to a competitor's local phone service.

The methodology employed in this study uses a process in which statewide projections are developed using data that describes calling baskets for three major regions of California - Los Angeles, San Francisco, and San Diego. The study found that the dynamics of local telephone competition are comparable in different geographic regions - that while the range of potential savings differs between regions - each location records demonstrable savings with the introduction of a new long-distance provider.

In September 2001, TRAC predicted that consumers in Pennsylvania, Georgia, Florida, and Illinois could collectively save at least $500 million and as much as $1.7 billion after one year of increased competition in those telephone markets. In New York, which was the first state to open its long-distance market to a Regional Bell Operating Company (RBOC), consumers have realized savings of approximately $197 million in the first year after increased competition, according to TRAC estimates. To be eligible to provide long-distance service, RBOCs must agree to open their service territories to competition. This results in more players entering the market, pushing prices down.

"The growing compendium of evidence produced by TRAC research shows quite convincingly that increased competition in the long-distance market gives consumers more choices of providers and services and lower prices - in both local and long-distance services. This latest study sends a strong signal to state public utility commissions currently considering long-distance relief for the RBOCs that serve them," concluded Walls.

The California study, as well as reports on other states, is available at www.trac.org.

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MEDIA CONTACT:

John Breyault, TRAC, johnb@trac.org, 202-263-2943

ABOUT TRAC:

The Telecommunications Research and Action Center (TRAC), founded in 1983, is a non-profit membership organization based in Washington, DC that promotes the interests of residential telecommunications customers. TRAC staff researches telecommunications issues and publishes rate comparisons to help consumers make informed decisions regarding their long distance and local phone service options. TRAC can be found on the web at http://www.trac.org.