LONG-DISTANCE giant boosts rate for millions of customers

Saturday, June 2nd 2001, 12:00 am
By: News On 6

WASHINGTON (AP) _ Nearly half of AT&T's long-distance customers will see their bills go up next month, as the nation's biggest carrier raises its per-minute rates for basic plans.

The company says it will boost rates, effective July 1, for the 28 million subscribers on basic rate service _ those who don't pay a minimum fee for special calling plans.

That means a basic plan customer will pay 25 cents _ up from 22.5 cents _ per minute for long-distance calls from 7 p.m. to 7 a.m. on weeknights; on weekdays, between 7 a.m. and 7 p.m., the rate goes up from 29.5 cents to 30 cents each minute. Weekend calls will cost 16 cents per minute _ up from 14.5 cents.

Subscribers who opt for a basic plan that has the same rate all the time will be charged 17.5 cents per minute, up from 16 cents.

The company kept in place its plans allowing consumers to pay 10 cents a minute on either Saturday or Sunday, but they would pay an increased amount per minute the rest of the week.

The AT&T rate increase will come at the same time that Americans see one of the line-items on their local phone bills _ called the ``subscriber line charge'' _ go up by 50 cents. That's a result of government-approved changes in how phone companies pay each other to complete calls.

AT&T officials said most basic rate subscribers don't make a lot of calls. Those 28 million customers _ out of the company's 60 million subscribers total _ account for only 15 percent of residential calling traffic.

But consumer groups and rivals accused AT&T of failing to follow through on a promise to lower rates. Last year, the Federal Communications Commission adopted a plan by AT&T, Sprint and the nation's local Bell companies to change the way telephone businesses compensate each other and collect subsidies from consumers.

Under the plan, the Bell local phone companies would reduce the amount they charge long-distance carriers like AT&T to complete calls. In turn, that savings was supposed to trickle down to consumers in the form of lower long-distance rates.

But that hasn't been the case, said John Emra of SBC Communications, the nation's second-largest Bell company.

``They are pocketing the savings and increasing rates,'' he said.

Gene Kimmelman of Consumers Union said the 50-cent increase in the subscriber line charge won't be offset for telephone users by lower long-distance rates.

``It's a double-whammy for millions of consumers,'' Kimmelman said. ``Obviously we don't have a lot of competitive forces at work in the long-distance business to pressure AT&T.''

AT&T senior vice president Robert M. Aquilina urged consumers to consider their phone patterns. More frequent callers might opt for other calling plans, which typically have a monthly fee or minimum use charge.

WorldCom and Sprint, the nation's No.2 and 3 long-distance carriers have not announced similar rate changes.