Consumers
Overspending On Telecom Bills

<!-- teaser (dek) copy -->

<!-- / teaser (dek) copy -->
By W. David Gardner
<!-- remove http:// substring (if present) from the url -->InformationWeek
March 9, 2009 03:11 PM



Consumers using landline and cell phone calling plans are generally paying more
for their service than they think ... and more than the FCC has been reporting,
according to a study released Monday by a consumer advocacy group.

The Utility Consumers' Action Network (UCAN) said its 87-page survey of 700
"relatively savvy consumers" revealed that users in the San Diego area have been
paying far more than they -- and regulators -- realize for their wireless
and long distance phone bills.

"The report applies nationally," UCAN executive director Michael Shames said in
an interview. "The plans are national and the rates uniform. Consumers are being
dramatically overcharged."

According to the survey, long-distance charges have increased on average to
55 cents a minute, and just 8% of landline customers are paying less than 10
cents a minute. The discrepancy between the actual usage charges and what
consumers pay is traced to the complex -- and often confusing -- plans that are
used by many consumers.

"Consumers don't know enough to use all the minutes" they are entitled to on
their plans, Shames said.

The survey found that other charges have risen sharply in recent years and
months. For instance, call waiting charges have gone up 86%, an unlisted number
is up 346% and directory assistance charges are up more than 1,500%.

Shames said that the survey demonstrates that the FCC has used "deceptive
practices" over the past eight years "to create an illusion of lower phone
prices and regulatory success." Low-income families have been hardest hit by the
increase in phone costs, with some local services increasing by as much as 346%.

The survey results are skewed in part because many consumers use just a small
portion of their monthly calling plans for a few calls, thereby raising the
numbers per call for all consumers.

What should consumers do?

Shames urged consumers to examine and update their legacy calling plans,
which tend to be "excessively expensive," he said. "Over 20% of the people we
surveyed are paying more than 50 cents a minute" for cell phone calls, he said.
Shames also suggested that cellular prepaid calling plans may represent a better
deal for many consumers.

Major service providers, including AT&T (NYSE: T) and Verizon Communications (NYSE: VZ), have long urged consumers to examine their bills closely
for ways to save, and the carriers say they'll help consumers find
less-expensive plans.

The survey was conducted for the San Diego consumer organization by
Teletruth, the New Networks Institute, and LTC Consulting.

Learn more about unified communications
at TechWeb's VoiceCon Orlando, March 30 to April 2. Join us (registration
required).

<!--body-->