BUCKS WATCH
USF Charge Increase On the Way - Long distance telephone users could be in for a surprise when they open their phone bills next month, thanks to a tax increase announced earlier this month by the Federal Communications Commission (FCC). On March 12, the FCC announced that it would be increasing the “contribution factor,” for the Universal Service Fund (USF) from 10.2% to 10.9% of interstate calling revenues. Long distance companies generally pass this tax directly along to their subscribers in the form of a line-item charge on monthly phone bills, calculated as a percentage of interstate calling charges. Most of the major phone companies have announced that they will increase their USF charges accordingly, effective April 1, 2006. For consumers, this means that the tax on a typical $16 monthly long distance phone bill will likely increase by 11¢ to $1.74 per month. For more information on this change, click here.
Choose Online or Separate Billing to Avoid New AT&T Fee Hike - AT&T long distance subscribers may want to reconsider whether it is worth the price to enjoy the convenience of having their long distance charges appear on their local telephone bills. This is due to a fee increase set to take effect on April 1 which will increase the company’s Bill Statement Fee by 50¢ to $2.99 per month. The Bill Statement Fee is applied when a subscriber elects to have their AT&T long distance charges appear on their local telephone bill instead of on a separate bill. Consumers who have AT&T as their local service provider are not subject to the fee. Instead of paying this fee, consumers should consider asking AT&T to put their long distance fees on a separate bill or pay their bills online. The 39¢ stamp needed to mail in a separate bill is much cheaper, after all, than a $2.99 per month fee. For more information on this change, click here.
WASHINGTON WATCH
New Cable Franchising Legislation Could Have a Big Impact on Consumers – On Monday, much-anticipated legislation was introduced in the U.S. House of Representatives which would radically change the way that cable and telecommunications companies obtain franchises to operate broadband video, voice, and data networks nationwide. The new legislation would replace the current franchising system, in which thousands of municipalities negotiate their own franchise agreements with cable companies to provide cable television service, with a national franchise system. Proponents of the bill claim that it will help increase competition by making it easier for telecommunications companies like Verizon and AT&T to compete with existing cable and satellite companies for consumers’ television, voice, and data business. Critics of the bill claim that it rolls back important consumer protections on such issues as universal service and network neutrality. TRAC, which has not yet taken a position on this particular bill, has long advocated for increased competition for cable TV service. We believe legislation that allows for expedited delivery of service is a good idea. We are concerned in part with the current draft legislation because it is being burdened with other provisions that may not be good for consumers. To read more about this bill, click here.
TRAC Applauds Senate Action To Protect Cell Phone Users’ Privacy – The U.S. Senate Commerce Committee on Thursday approved legislation that would toughen penalties on wireless phone companies who fail to adequately protect the privacy of their subscribers’ phone records. The legislation would increase fines to as much as $30,000 per incident up to a maximum of $3 million for violations. The bill aims to stop “pre-texting” in which scam artists impersonate subscribers in an effort to illegally obtain phone records, which they then sell. Similar legislation is currently pending in the U.S. House of Representatives. “Consumers have a right to expect that their personal telephone records are kept private and secure from scam artists out to profit from their personal information,” said TRAC Research Association John Breyault. “In an era where consumers’ personal information is increasingly at risk, this kind of legislation is a good first step in safeguarding cell phone users’ privacy.” For more information on this bill, click here.
TRAC IN THE NEWS
Directory Assistance Price Hikes Make Free 411 a Useful Alternative, Says Simon – The rising cost of 411 is making free advertiser-supported directory assistance services more attractive to consumers despite technical problems, said TRAC Chairman Sam Simon this week on Washingtonpost.com. With telephone directory assistance costing as much a $3.49 per call, it just makes sense to try out free alternatives first, noted Simon. Heavy use of services such as 1-800-FREE-411 have created technical problems, but "it's worth the hassle,” said Simon. “There's no downside other than the frustration.” To read the full article, click here.
Consumers Paying More For Communications, Says Simon – The proliferation of communications devices and services have helped raise the overall communications bill for many consumers, noted TRAC Chairman Sam Simon this week in an interview with Cox News Service. Many consumers are often averse to changing their communications habits, despite steadily rising bills. "There's a group of people that will keep paying and paying and paying, and the phone companies know that," said Simon. To read the full Cox article, click here.
INTERESTING LINKS
FCC Main Page: http://www.fcc.gov
FCC Complaint Form - http://svartifoss2.fcc.gov/cib/fcc475.cfm
List of State Regulatory Commissions: http://www.naruc.org/displaycommon.cfm?an=15
What do you think? Got a tip you want to share? Nominate your "Scam of the Week" and your "Tip of the Week" - If we select your submission, we'll give you a one-year free membership in TRAC and acknowledge your contribution by name in TRACNotes. Send an e-mail to trac@trac.org to submit your ideas!
TRACNotes is distributed to TRAC members and those who have signed up on the TRAC website "Newscenter." If you do not want to receive TRACNotes, simply click here and let us know. You won't receive these in the future. We hope you choose to remain a part of our network, and that you find TRACNotes helpful. Our goal is to provide you with useful information about what is happening in the telecommunications marketplace for consumers and to keep you up to date on TRAC's policy advocacy. If you like what you see, please consider becoming a member of TRAC by clicking here.
©2006 Telecommunications Research and Action Center. TRAC grants unlimited rights to reproduce TRACNotes or any information contained in it provided attribution is given as follows: "Source: Telecommunications Research and Action Center. http://www.trac.org"
