'Bundle' Up, or Up Your Bill: Landline Service Rates Increase

July 18, 2007 (KABC-TV) (KABC) -- Landlines are going to cost more for millions of AT&T customers in California.

Since it's the second rate hike in months, AT&T customer Tony Rojo wonders how much more his limited budget can take.

"It'll be a month like that and then they're going to jack it up. So it's hard," Rojo said.

The rate hike applies only to those who don't have bundled services, such as phone and Internet together.

Caller ID went up from $8 to $9 a month. Call waiting, call forwarding and other features jumped from $4 to $5. And unlisted numbers soared a whooping 346 percent, from 28 cents to $1.25.

The country's largest phone carrier says there were virtually no price changes in the 20 years before the hikes and basic phone service remains relatively cheap at under $11 a month.

Consumer groups, though, are outraged because customers are being nudged to bundle services that'll save them money overall, but shift more business to AT&T.

"The phone company knows that once a customer is in a bundled service, they're less likely to leave and go to another carrier. So that's their real goal, is to get customers and keep customers," Mindy Spatt, of Utility Reform Network, said.

But AT&T and its competitors aren't the only ones to blame for the rate hikes.

The California Public Utilities Commission quit regulating phone rates last summer to promote competition among new technologies, like cable and wireless.

"Why would the PUC give up its jurisdiction and basically throw California consumers to the wolves," Spatt said.

Repeated calls to the PUC were not returned.

There's a mandated freeze on the basic phone service rate until 2009.

Consumer groups are almost sure that'll go up too once the freeze is over.

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