BUCKS WATCH
Subscribers Set to Pay More of MCI's Property Taxes - It almost seems as if the long distance carriers are having a competition this spring to see who can raise their fees the most. Unfortunately, it’s always the consumer who seems to come out the loser. This week, MCI announced its latest fee hike, an increase in its Property Tax Surcharge from 2.3% to 2.5% of interstate and international long distance charges, effective May 1, 2006. According to the company, this surcharge allows MCI to “recover a portion of the property tax that it pays to state and local jurisdictions.” Perhaps consumers should start subtracting the cost of a 39¢ stamp on the checks they write to MCI each month? (Note to MCI’s lawyers: We’re just kidding.) While this increase amounts to less than half a cent per month on a typical $10 monthly long distance bill, it is yet another example of a long distance company trying to compensate for lower average revenues per user (thanks in large part to increased cell phone use) by raising discretionary fees and surcharges. TRAC estimates that 10-20% over the typical residential consumers’ monthly telephone bill is now made up of taxes, fees, and surcharges. This is why we often recommend that consumers consider dumping their landline long distance service altogether. Instead, consumers may want to consider using prepaid phone cards or unused wireless minutes to make long distance calls. For more information on the MCI fee increase, click here.
AT&T to Raise Carrier Cost Recovery Fee By 50¢ on July 1 - Have you noticed a trend in TRACNotes the past few weeks? We try not to pick on any one company too much, but AT&T has been announcing new fee and rate increases on an almost weekly basis over the past few months. This week, we noticed yet another fee increase announcement from the company. Effective July 1, 2006, the AT&T Carrier Cost Recovery Fee will increase by 50¢ to $1.99 per month. As with many of their previously announced rate increases, it is targeting AT&T long distance service subscribers who do not also get their local phone service from AT&T. The company tries to justify this discretionary fee by saying that it helps “recover costs associated with providing state-to-state and international long distance service including expenses for national regulatory fees and programs, connection and account servicing charges and expenses for regulatory compliance.” TRAC’s long-time position on these kinds of fees and surcharges is that the costs AT&T describes are simply the costs associated with doing business and should be incorporated into the monthly service fee. By breaking them out in to line item fees, the company ends up advertising an artificially low price, effectively deceiving their customers. For more information on this fee increase, click here.
WASHINGTON WATCH
Key House Subcommittee Approves Telecommunications Bill - On Wednesday, a key U.S. House of Representatives subcommittee approved the Communications Opportunity, Promotion, and Enhancement Act of 2006, a bill that would grant a national franchise to former Bell companies and others who wish to enter the pay-TV market. This approval represents a big step towards removing the obligation for these companies to negotiate thousands of franchise agreements with local municipalities before they can begin offering video service in competition with cable and satellite companies. Public interest advocates have criticized the bill because an amendment that would have strengthened a so-called “network neutrality” provision was voted down. "Network neutrality," refers to the requirement that broadband network operators allow any device or service connected to the network to run at the same speed as devices and services offered by the network operator themselves (generally a Bell or cable company on consumer broadband networks). The bill now moves to the full Energy and Commerce Committee with a vote expected by the full House after the Easter recess. In the Senate, Commerce Committee Chairman Ted Stevens is expected to introduce his own version of the bill later this spring. TRAC, which has not yet taken a position on this particular bill, has long advocated for increased competition for cable TV service. While we are in favor of legislation that makes true broadband competition a reality faster, we are concerned that the bill may not go far enough to protect consumers. For more information on this bill, click here.
TRAC IN THE NEWS
Sam Simon to Appear on CNN This Weekend - TRAC's Chairman, Samuel A. Simon, is scheduled to appear on CNN's "In the Money" program this weekend to discuss ways consumers can save on phone bills and the future of consumer telecommunications. The show will air at 1:00 PM EST this Saturday and be repeated at 3:00 PM EST on Sunday. "In the Money" is hosted by Jack Cafferty, Andy Serwer, and Allen Wastler. It is a great program to watch for consumers who want to find out how the news of the day affects their pocketbooks. Readers who miss the show can read transcripts by visiting http://www.cnn.com/CNN/Programs/inthemoney/.
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!
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©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"
