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Deregulation dials up new landline fees


When Mike Mudd opened his phone bill this month, he discovered a strange new charge.

His long-distance phone carrier, AT&T, was charging him $4.66 for long-distance calls on his landline because he failed to make any long-distance calls on his landline.

"I make long-distance calls on my cell phone," the 58-year-old from Hobe Sound, said. "I got the landline three years ago because I needed it for my home security system."

So Mudd wrote the Public Service Commission, the state agency that has regulated phone companies, to complain about the first-ever "minimum usage charge" on his July bill.

But that was useless.

"The Public Service Commission no longer has the authority to accept as many of the consumer telecommunications complaints as we have in the past," the Public Service Commission replied.

Welcome to the current state of Florida, where a regulation-free environment for big business keeps flowering.

Under new legislation that went into effect this month, telephone companies in Florida can increase charges on landlines without the prior approval of the PSC, which has been stripped of its regulatory power under the new law.

"The phone companies can add new fees for whatever they want and whenever they want," said Dave Bruns, an AARP of Florida spokesman. "Consumer regulation is out of fashion. The Florida Legislature thinks that consumers don't need protection from inventive new ways to get into your wallet."

The phone companies lobbied for the change, saying that the deregulation of landline phones would allow them to compete better with wireless carriers, which provide unregulated cell phone services.

The new fee Mudd is paying applies to AT&T customers who have not chosen a domestic calling plan and whose long-distance rate is 39 cents a minute. It's actually a $2-per-month charge, with the additional $2.66 coming in surcharges for something called the carrier cost recovery fee and federal universal service fee.

"There is a cost to provide customers with basic long-distance service, including account maintenance, even if no calls are made," explained company spokeswoman Kelly Layne Starling. "This charge allows us to continue providing affordable service to our low-usage long-distance customers."

She suggested that Mudd and others in his situation can avoid paying the minimum usage fee by exploring their options with AT&T's other long-distance plans.

The AARP has been leery of deregulation of landline phones because the group's members are heavily represented among the Floridians who still use landlines and often require them because, unlike cell phones, they are linked to safety alert services.

"When regulation was removed on landlines in other states, rates went up 60 percent," Bruns said. "This is just the start."

State Rep. Mark Pafford, D-West Palm Beach, was one of the four lawmakers who voted against the phone deregulation legislation.

"The big concern I had was that poor people or seniors would end up getting stuck with these bills," he said. "I got rid of my landline a year ago, but a lot of my constituents don't have a cell phone.

"I know the argument is that deregulation will drive the market prices down," he said. "But we haven't seen that in the insurance industry."

Frank Cerabino writes for the Palm Beach Post. E-mail: [email protected]

© 2011 Cox Newspapers

Deregulation dials up new landline fees 07/24/11 [Last modified: Sunday, July 24, 2011 4:30am]
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