BUCKS WATCH
New TRAC Chart Finds That Fees Are Increasingly Hurting Low-Volume Telephone Users - 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. The study, 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. “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. Copies of the chart can be purchased from TRAC for $6 online at www.trac.org. Hard copies of the report can be ordered for $7 on the website or via mail order at:
TeleTips Residential Long Distance Comparison Chart
Telecommunications Research and Action Center
PO Box 27279
Washington, DC 20005.
To read more about TRAC’s new chart, click here.
Ten Years Since The 1996 Telecom Act: Consumers Still Feeling the Pinch on Telephone Bills - This year marks the tenth anniversary of the passage of the 1996 Telecom Act, one of the landmark events in telecommunications industry history. 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 subscribes to the basic rate plans offered by AT&T (Dial-1 Standard) and MCI (Dial-1, still offered by Verizon) 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.
WASHINGTON WATCH
Wireless Complaints Down in 4th Quarter, Says FCC - The number of complaints received by the Federal Communications Commission (FCC) in regards to wireless service decreased from 6,873 in the third quarter to 4,956 in the fourth quarter of 2005, with fewer complaints received in all categories monitored by the commission. Billing and rate complaints continued to be the issues of most concern to consumers, with service quality and early termination fees coming in next on the list. “We’re glad to see the number of complaints going down,” said TRAC chairman Samuel Simon. “That said, most consumers don’t take the time to complain to the FCC when they have a problem, and industry-wide, we still believe that the wireless industry has much to do to improve its reputation for poor service.” To read the FCC’s report, click here.
TRAC IN THE NEWS
Don’t Believe Bundling Marketing Hype, Says TRAC – Despite telephone company marketing claims, bundled local, long distance, and wireless calling plans may not be a money-saver for everyone, noted an article in Wednesday’s San Antonio Express-News. "The more information you have, the better choice you're going to make," said John Breyault, TRAC research associate. "If you just believe the marketing, you're probably not going to end up with the best deal." Generally, bundled plans are best for heavy-volume users who spend many hours a month making long distance calls. For the average-to-low volume users who spend only a few hours per month making long distance calls, bundled plans generally won’t save them money. To read the full article, click here.
Buy Directly From Wireless Carriers to Avoid Some Headaches – When in doubt, buy wireless phones and service plans directly from the carrier, advised TRAC in the February 12 edition of The Virginian-Pilot. That way, the carrier, such as Cingular or Verizon Wireless, is accountable for any trouble with equipment or service. Responsibility isn’t so clear with a third party, such as a store, kiosk or Web site that sells multiple carriers’ plans and phones. “So you don’t always know who you’re supposed to go to if you have a problem,” in those cases, said TRAC Research Associate John Breyault. “It’s frustrating enough to deal with the carrier directly.” To read the full article, click here.
TRAC AND YOU
What’s More Important to You: Quality or Price? – It seems that consumers are constantly faced with the choice between paying a lot for high quality products or a little for lesser quality items. It is no different in the telecommunications industry. Consumers who spend the extra money get additional services, lower per-minute rates, more minutes in their bundles, etc. Consumers who want to spend less often get a lower-quality product with fewer bells and whistles. Taking wireless phones as an example, what would you be willing to pay for a cell phone that had the reliability and call quality of a typical landline phone (e.g. completed 99% of the calls on the first try and rarely, if ever dropped a call)? $100 per month? What about customer service? Would you be willing to pay $1 extra per month to get through to a live customer service representative with extra training on the first ring? E-mail us with your thoughts at trac@trac.org.
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"
