AT&T Ups Cost of Home Phone Service 27-63%, But CUB Alerts Consumers to Low-Cost Plans That Freeze Prices, Protect Consumers From Hikes

CHICAGO, Jan. 17, 2011 /PRNewswire/ -- Home phone service just got a lot more expensive in Chicago and the surrounding suburbs after AT&T increased its line charges by up to 63 percent, but consumers can avoid those rate hikes with three low-cost, often overlooked calling plans that are the best deal for most Illinois callers, the Citizens Utility Board (CUB) said in a consumer advisory issued Monday.

A CUB analysis shows that the prices of the Consumer's Choice plans, now under a legislatively mandated rate freeze for the next two and a half years, easily beat the cost of other comparable AT&T offers, by at least 45 percent. CUB designed the plans to save consumers money and AT&T was originally required to offer them as part of a 2006 legal settlement with the consumer group. Since then, the Consumer's Choice plans have been saving callers an average of $200 a year.

On Jan. 3, AT&T increased the line charge, the basic monthly fee customers pay to have home phone service, by $3 in each of the Chicago region's three "access areas." Customers in the Chicago Loop saw a 63 percent increase, to $7.76 a month. Those living in the rest of the city and nearby suburbs now pay $10.74 a month, a 39 percent increase. Customers in the outer suburbs now pay $14.21 a month, an increase of 27 percent.

AT&T also increased from $7.50 to $8 the monthly price of Line-Backer, an optional and largely unneeded service that covers inside wire repairs that happen on average only once every 20 to 30 years. The popular Call Waiting also went up from $7.50 to $8.50 per month.

"Chicago callers must feel like an ATM machine," CUB Executive Director David Kolata said. "The bad news is home phone rates have skyrocketed by up to 63 percent. The good news is that the Consumer's Choice plans are rate-hike proof and can help you save hundreds of dollars a year." 

Nearly three out of four consumers still use traditional, landline phone service either as their primary connection to the world, including 911 emergency service, or a reliable supplement to cell-phone service.

In AT&T's Midwest territory, only in Illinois can consumers take advantage of plans actually designed by the state's largest telecom consumer-advocacy group, CUB, to save people money. The Consumer's Choice plans match the way consumers use their phones and provide a low-cost alternative to the phone company's overpriced calling packages. Last year, the Illinois Legislature froze the plans' prices through at least June, 2013. The offers, which include the monthly line charge and thus protect consumers from the recent AT&T rate hikes, are:  

Consumer's Choice Basic, ranging from $3.05 a month in downtown Chicago to $9.50 per month in the rest of Illinois, provides the safety and reliability of a landline, without the bells and whistles. The plan includes 30 local phone calls. Calls beyond the first 30 cost 6 cents per call.

Consumer's Choice Extra, at $9 to $15 per month, includes unlimited local calls. This plan is best for a caller who makes more than 120 local phone calls per month, but doesn't want extra calling features.

Consumer's Choice Plus, costing $16 to $19.70 per month, includes two calling features, such as Caller ID or Call Waiting, and unlimited local phone calls.

When combined with low-cost long-distance service, such as Pioneer Telephone's Rate Buster plan, with rates under three cents per minute, Consumer's Choice Plus consistently beats other popular AT&T plans, according to a CUB analysis. The review compared the usage of a "typical" caller, who makes about 100 local calls a month, uses 120 minutes of long distance, and wants up to two calling features, such as Caller ID with Name or Call Waiting.

Consumer's Choice Plus callers with that usage and low-cost long distance would have paid just under $31 a month, or nearly half what they would pay, $55, for the same service under AT&T's standard rates. Consumer's Choice Plus and Pioneer beat AT&T's popular All Distance local and long-distance package by 45 percent.  

AT&T customers can determine which plan best suits their calling habits by using CUB's Local Phone Cost-cutter, at the Consumer Group's online Phone Savings Center, www.CitizensUtilityBoard.org. The one-of-a-kind online tool analyzes residential AT&T bills and recommends the most affordable calling plan. The tool hit a new milestone in 2010, showing more than 41,000 consumers how to save a total of $8.1 million a year, or about $200 per customer. Consumers without access to the Internet can call CUB, at 1-800-669-5556.  

CUB is Illinois' leading nonprofit utility watchdog organization. Created by the Illinois Legislature, CUB opened its doors in 1984 to represent the interests of residential and small-business utility customers. Since then, CUB has saved consumers more than $10 billion by helping to block rate hikes and secure refunds. Call CUB's Consumer Hotline, 1-800-669-5556, or visit www.CitizensUtilityBoard.org.

SOURCE Citizens Utility Board