To read the Report: 
http://www.teletruth.org/docs/ATTMCIharvest.doc

FCC Bad Data Vs AT&T Price Increases

http://www.newnetworks.com/attvsfccphoneincreases.htm

Table of Contents

http://www.newnetworks.com/ATTTOC.htm

Teletruth News ALERT: February 6th, 2007

In 2001, AT&T and MCI had 62% of households using their long distance Service. What happened is one of the largest shams in American history.

To put it bluntly, the new-AT&T and MCI-Verizon are intentionally harvesting customers --- Is it collusion and is it being done with the FCC's permission?

What is harvesting? According to the FCC's AT&T-SBC merger Order: "Harvesting refers to AT&T's increasing price increases to encourage customers to discontinue service."

As we report, 30-40 million AT&T and MCI customers were harmed with increases for long distance of 200%+ since 2000, especially loyal seniors and low volume customers --- And millions are paying $.50-$1.00 a minute.

Weren't the mergers of AT&T with SBC, and MCI with Verizon supposed to make these new companies strong competitors? Instead, it seems, they're working in collusion to raise the rates of their 'loyal' customers --- especially impacting seniors and low volume customers. It also seems is obvious they had no plans of competing. Customers who were loyal to the most famous brand in telecom history, AT&T, were intentionally duped.

The FCC is clearly part of the problem as they knew that these companies were not going to compete in the consumer market. AT&T would not take on MCI, and SBC and Verizon were not going to enter each other's markets, even though Verizon and SBC had made prior commitments to compete.

To make matters worse, the FCC's data is so flawed that it didn't notice that prices for many customers are continuously on the rise and it is using this flawed data to create bad policy on multiple fronts.

In short, what is happening is a tale of the underbelly of our Digital Age, the consequence of bad policies with no regulatory oversight or even accurate data to assess the issues.

While it may not be readily apparent to professionals and upper income consumers, rates have increased many times over for low volume users, particularly seniors, despite the apparent reduction in prices experienced by heavy-volume telephony consumers. The vast majority of American telephony customers are low-to-middle volume users and it is they who have borne the brunt of price and rate increases since the AT&T/SBC and MCI/Verizon mergers.

The report, based on actual phone bills, phone company tariffs and FCC data tells a compelling, yet appalling story.

Part One: Harvesting Customers: An intentional plan to raise rates and add multiple, questionable fees to existing customers.

o 30-40 million AT&T and MCI customers were harmed with increases of 200%+ since 2000, especially seniors and low volume customers.

o Millions of customers are paying $.50-$1.00 a minute or more for long distance when all of the charges are added together.

o "Basic" long distance rate for AT&T is $.42 a minute (day rate) and does not include increases or new fees: Minimum Usage, Monthly Fee, Cost Recovery, Single Bill Fee, In-state Connection fees and increases to the Universal Service Fund since 2000.

We note that AT&T had made commitments in 2000 to supply long distance service basic service at $.19 with no monthly fees or minimums.

See:http://www.newnetworks.com/ATTCALLS3.htm

Part Two: The FCC Data is So Flawed that its Printout should be Used for Fish Wrapping. FCC Chairman Martin claims price of every service is falling:

"Since 1996 the prices of every other communications service have declined while cable rates have risen year after year after year."

A chart from the report shows that while the FCC claims that long distance service went from $.09 in 2000 to $.06 in 2004, AT&T's basic rate increases went from $.19 in 2000 to $.42. And that doesn't include the increases to Minimum Usage, Single Bill Fee, Cost Recovery fee and other questionable charges.

See: http://www.newnetworks.com/attvsfccphoneincreases.htm

More to the point, the FCC's data is so flawed that it has no accurate information about how 1/3 of the population, especially low volume users, including seniors, were impacted by the merger-increases. The FCC reports only address "high-volume" users, who are not the majority of users.

In fact, the FCC no longer collects accurate data and is giving out 'astroturf' groups' information as 'accurate' sources.

Part Three: There is no true competition for the majority of US customers.

o The majority of customers do not benefit from packages, including those supplied by cable companies or VOIP. No brand names are selling stand alone local or long distance competitive service. VOIP requires broadband, and packages require the purchase of two or more services. And the advertised price can leave out 35%-45% of the actual costs

o Wireless is also not a competitive option for low volume customers. An AARP study shows that most seniors', if they have a cell phone, have it because of security and emergency reasons.

Post merger anti-competitive behavior. It is clear that AT&T and Verizon plan to let each Bell rule their own territories and not compete, but to also raise both local and long distance service rates to force customers onto more expensive packages.

Part Four: Harvesting Works by Preying on Customer Loyalty, Brand Awareness, a Lack of Customer Education and Unreadable Phone Bills.

Both SBC and AT&T as well as the FCC knew that AT&T's basic rate customers were mainly seniors and low volume users who were loyal customers who didn't shop around, don't have a lot of options, and couldn't read their phone bills.

AT&T is playing the loyalty and name-brand card ---Why do you think SBC was so hot on getting the AT&T name. Here's AT&T's own words:

"The AT&T name has a proud and storied heritage, as well as unparalleled recognition around the globe among both businesses and consumers,"

"Additionally, it has almost universal awareness as a communications brand: Internal research shows that in the United States, consumer awareness of the AT&T brand is 98 percent and business awareness is virtually 100 percent, while global awareness is nearly as high."

"Also, consider the company's reputation: is it a brand you know and trust or a company that you've never even heard of before? Is it a company that's innovative and likely to offer new services as your needs change? What kind of response will you get if you have a service or billing problem? AT&T combines quality and reliability with competitive pricing. And, perhaps most importantly, we can help you select the AT&T calling plan that best meets your calling needs."

Conclusion: Against a backdrop of a well-heeled marketing plan to intentionally harm low volume users and seniors through massive price increases, without a significant educational campaign to overcome unreadable phone bills, and with a total failure of oversight by the FCC and regulators, who also lack their own accurate data, why should we expect any other outcome than to harm 1/3 of the US phone customers?

o Congress should immediately investigate what happened to AT&T and MCI customers.

o Congress should immediately investigate the failure of the FCC to collect accurate data to be used to make clearheaded policies.

o The Court should break up the AT&T-SBC, Verizon-MCI mergers.

For more about Teletruth's phone bill work see: 

http://www.newnetworks.com/phonebillissues.htm

More about Teletruth http://www.teletruth.org

Bruce Kushnick, bruce@teletruth.org

Tom Allibone tom@teletruth.org