WASHINGTON, D.C. - Higher fees, taxes, and surcharges are placing a greater burden on low-volume telephone users than ever before, according to a new study released today by the Telecommunications Research and Action Center (TRAC), the nation's leading telecommunications-focused consumer group. As we mark the tenth anniversary of the passage of the 1996 Telecom Act, the 47th edition of TRAC's popular TeleTips Residential Long Distance Comparison Chart, compares eighty-nine of the most popular stand-alone long distance and bundled local and long distance plans from the nation's leading telephone service providers. The framers of the Act promised that it would bring greater choices and lower prices to telephone consumers since long distance carriers and local phone companies would be able to compete for each others’ business. TRAC compared the data from the TeleTips Residential Long Distance Comparison Chart released today with the chart we released in 1996 and found that for low-volume users especially, this has not been the case. Key findings of this comparison include the following:

• Basic Rate Plan Costs Have Skyrocketed. Basic rate plans are the default plans that consumers are put on when they subscribe to a carrier but do not choose a specific plan. A user making 6 calls lasting a total of 53 minutes who subscribe to the basic rate plans offered by AT&T (Dial-1 Standard) and MCI (Dial-1, still offered by Verizon) plans would have paid $10.12 and $10.06, respectively, for those calls in 1996. In 2006, those same calls would cost $25.82 for the AT&T plan and $16.68 for the MCI plan.

• Monthly Recurring Fees Have Been Increasingly Imposed. These fees, which subscribers pay whether they use the service or not, disproportionately affect consumers who make few long distance calls per month. Nonetheless, phone companies’ plans increasingly include monthly recurring fees. Only 7% of the plans surveyed by TRAC in 1996 included monthly recurring fees, while 83% of the plans surveyed in 2006 included fees, ranging in price from 60¢ to $69.99 per month.

• The Cost for Long Distance Directory Assistance (LDDA) Has More Than Tripled. In 1996, Sprint, AT&T, and MCI all charged 95¢ per call to LDDA. In 2006, the cost for a call to LDDA for MCI (now Verizon) subscribers is $3.49 per call; for Sprint and AT&T subscribers it is $2.49 per call.

“High-end residential consumers can afford the convenience of all-you-can-eat local and long distance bundled packages,” said Samuel A. Simon, TRAC's founder and Chairman. "However, the typical low-volume long distance user is getting stuck with ever-higher fees, taxes, and surcharges that mainly serve to prop up the carriers’ bottom lines.” TRAC's TeleTips comparison chart helps consumers calculate the true costs of each plan based on a "shopping basket" tailored to their particular calling habits. TRAC's comparison chart also breaks down the features and services of each plan offered by the leading long distance carriers.

TRAC’s study found that carriers’ basic, or standard rate plans saw the greatest cost increase since the January 2005. Prior to the close of its merger with SBC Communications, AT&T raised the rates on its Basic Rate Plan by as much as18.5¢ per minute, while increasing their discretionary carrier cost recovery fee by 50¢. Before its merger with Verizon, MCI raised the monthly service fee on its Basic Dial 1 plan by $1.00 to $3.49 per month. MCI also raised its discretionary carrier cost recovery fee by 40¢ to $1.25 per month. In addition, the cost to use a calling card on a payphone increased dramatically as well, with pre-merger AT&T raising their payphone surcharge by 4¢, BellSouth by 20¢, IDT by 25¢, SBC by 13¢ and Verizon by 26¢. SBC also raised its discretionary “regulatory surcharge” from .15% to .782% of interstate and international charges. On a typical $20 long distance bill, that amounts to an almost 13¢ increase in monthly fees.

“If carriers can bundle telephone, wireless, data, and video services, why can’t they bundle their costs into the rates their charge their subscribers instead of nickel and diming them to death with fees, taxes, and surcharges?” stated TRAC’s Simon.

Tips for Choosing Long Distance Service

• Don't Be on a Basic Rate Plan: "Basic" or "standard" rate plans continue to be the most expensive plans for consumers. These plans are the default plans that subscribers are placed on if they have long distance service with a company but do not choose a plan.

• Online Account Management: Long distance carriers continue to offer deep discounts to consumers who agree to some form of online billing or account management. Consumers who make two and a half hours or less of long distance calls per month may save money by switching to one of these plans.

• Best Value: In general, long distance buying decision should be based on who can provide the best value as opposed to choosing a carrier based on a low per-minute rate alone. With consumers increasingly turning to wireless phones, e-mail, and instant messaging for their communications needs, many users may find that they no longer need a stand-alone long distance plan at all. Consumers should evaluate their communications needs "in total" rather than as separate pieces of local, long distance, wireless, and Internet.

• Alternative Calling Methods: "Dial 1" long distance isn't the only way to call out-of-town friends and family. 10-10 dial around carriers, prepaid phone cards, wireless phones plans with included long distance, and VoIP are all methods that consumers can use as an alternative to standard long distance plans.

To order copies of TRAC's TeleTips charts, please visit www.trac.org or send $7 check or money order for the

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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.