About five years ago,we regaled you with hints and suggestions about how to best shop for landline services. Here's our new advice...............don't buy landline phone services. The duh-regulators who sought to inject competition in the phone industry fumbled the ball mightily when it comes to local (landline) phone service. Prices appear on the verge of skyrocketing in 2011.

THE BAD NEWS

The bottom line is that the prices went up for a service that should be offered for a few dollars per month. Direct competition has all but disappeared. The only real cost-effective options available to you is VoIP service over your Internet (which is the option that I recommend) and using your cell phone as your personal home phone (sub-optimal, but bearable). And that's not a pretty option for many landline customers.

In California, landline services have been functionally deregulated and now exceed over $25 per month for most homeowners. During the 2007-2008 time frame, most California's landline phone service rates had increased by between 70-276%. From a few years ago, we are looking at 1000% price increases. Remarkably, many consumers aren’t even aware of these price shocks.

Consumer advocates say the elderly and low-income families are hardest hit by the creep in fees. It is the less-savvy consumers who don’t have the wherewithal or time to shop for phone services who are footing the bill for this regulatory misstep. What’s worse is that AT&T is reaping record profits on the backs of these ripped-off consumers; AT&T announced that it had doubled its profits in the first quarter of 2007 over the last year, earning an amazing $2.85 billion.

Why has the CPUC given AT&T carte blanche to raise rates not mandated by the government—rates that go in the company’s pockets? Because the CPUC claims there is so much competition that people are free to change carriers. But with the spate of recent phone company mergers that followed the deregulation order, customer choices have all but disappeared. San Diegans who want local land-line phone service are limited to AT&T and/or a local cable company. That’s it! A competitive market for local phone service is but a pipedream in the pipes that the regulators are apparently smoking.

THE GOOD NEWS

OK, we lied. There’s no really good news. Until the regulators do their job of protecting California consumers rather than coddling the big phone companies, there aren’t many good alternatives out there. However, there are ways in which the motivated consumer can counterattack the decline of phone alternatives. But consumers do have some options.  If you want to learn more about your options to AT&T's basic landline service, simply click here.