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Big 3 Phone Companies
Increase Rates, Fees

Jan. 2, 2002
In a corporate game of follow the leader, AT&T and Sprint are increasing basic long distance rates a month after MCI did the same.

On January 1, three MCI plans' state-to-state rates went up from 30¢ to 35¢ a minute peak time (7am-6:59pm, Mon.-Fri.) and from 25¢ to 30¢ a minute all other times except Sundays. Plans hit with the 20% hike include MCI Friends and Family, MCI 5¢ Sundays and Basic Dial 1.

AT&T followed MCI by announcing very similar increases effective as of February. About 23 million of AT&T 's 60 million consumer accounts pay the highest basic rates. Next month those rates are going up from 30¢ to 35¢ a minute peak time and from 25¢ to 29.5¢ a minute weekday evenings. Weekend rates will increase from 16¢ to 18.5¢ a minute.

Sprint is implementing a relatively modest 10 percent increase on its basic rates. However, the Sprint Standard Weekends plan Saturday rate is set to double from 10¢ to 20¢ per minute.

Last year the three companies implemented a $1.50 monthly fee for consumers to receive long distance billing with their local phone bill. Sprint led the way, adding the fee in January 2001. AT&T followed in April. Both carriers gave customers the option to avoid the charge by agreeing to receive a separate bill. MCI took a different approach, sending separate bills and giving customers an option to request co-billing.

In a twist on the "follow the leader" theme, MCI experimented with an industry-high Federal Universal Service Fee (FUSF) of 12 percent. After charging that amount from April through September of 2001 MCI reduced its FUSF back to 9.9 percent.

Now AT&T has hiked its FUSF charge from 9.9 to 11.5 percent as of January. Carriers add FUSF charges to out-of-state calls and in some cases monthly calling plan fees, but not instate calls.

"They're trying to squeeze every penny they can out of customers," says consumer advocate Rich Sayers of rates comparison Web site 10-10PhoneRates.com. All fees and conditions are spelled out for all of the plans compared on 10-10PhoneRates.com.

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