US Long Distance
Phone Rate
Deception Rampant
The Fogging of America -Pt 1
By Jack Koenig <>
If you make 50 minutes of long distance calls a month, did you know that AT&T's heavily advertised "One Rate 7¢ will actually cost you 24.7¢ a minute? Or that MCI's "Five Cents Any Day rate will actually cost you 25.0¢ a minute if used during working hours? And how about Sprint's Sense 10 cents per minute rate? Bite your tongue... that'll cost you 77.8 cents!
This mini-series of reports will help you understand how all carriers, but in particular AT&T, MCI, and Sprint, have manipulated changes brought by the 1996 Telecommunications Act to deceive the public and line their pockets. Specifically, it will show how the major carriers have been masquerading their rate increases as "Federally Mandated Taxes" and shifting some of their costs onto the consumer. It will also show how you can counteract these manipulations and achieve savings in your phone bill whether you use long distance or not.
Years ago, when AT&T (Ma Bell) ruled the roost, actual expenses involved with providing local and long distance service were muddy at best. There really was no need to isolate different components since they all ended on the same bottom line.
After "Ma Bell" was broken up into AT&T and the "Baby Bells", things began to change. The "Baby Bells", which were restricted to carrying local service, complained that FCC regulations forced them to absorb part of the expenses associated with the long distance component. In 1996, the Congressionally passed Telecommunications Act began to address this concern by isolating phone costs into different components including those associated with carrying traffic between the user and their long distance carrier's line.
Once these costs were identified and isolated, the FCC issued rules changing the method in which the "Baby Bells" could charge long distance carriers for usage of their lines. The old method, charging so much per minute for usage of the local lines in completing a long distance call, was replaced by a combined LOWER per minute rate PLUS a flat monthly line charge called a Presubscribed Interchange Carrier Charge, or PICC for short. The combination of this replacement cost structure was actually LOWER than the previous flat rate per minute charged to the long distance carriers.
But the FCC didn't stop there.
To help the "Baby Bells" to make up for any loss of revenue from the lower combined charges to the long distance companies, they were also allowed to charge the consumer a new item called a "Subscriber Line Charge". In essence, the FCC allowed part of the long distance carrier,scost to be shifted to the consumer. And this is where the "smoke and mirrors" begins!
The "Subscriber Line Charge" generally appears in the local section of your phone bill as the "Federal Subscriber Line Charge", the implication being that it is some new type of federally mandated item. In reality, this in no way is a federally mandated charge: it is an allowed charge. The "Baby Bells" claim they call it a "Federal Subscriber Line Charge" because it was allowed by federal regulators as oppose to state regulators. But by doing so, the
consumer is led to believe it is just another federal tax, which of course it isn't. Not one cent goes to the federal government or any governmental agency. The local companies do not have to charge any amount!
But this is only the beginning of the "smoke and mirrors" game!
Not to be outdone, the long distance companies were just as quick to capitalize on the confusion. They took the flat monthly line charge (the PICC), and placed it in the long distance section of your bill as the "National Access Fee". Once again, especially with all the "Gore Tax" talk, consumers were led to believe this was just another federal tax. But once again, it "ain't so"!
This whole charade has been nothing less than a shell game in which both the local and long distance carriers shifted part of their costs onto the consumer while transparently raising their rates. It's been a "win win" situation for the phone companies and a "lose lose" situation for the public.
And this is why, despite all the hoopla about AT&T's "One Rate 7¢" or MCI's "5¢ Any Day rate" (actually MCI's is the greater lie because it only applies to calls between 7pm and 7am), your phone bill is getting larger. It appears that the leaders in this "Fogging of America" were AT&T, MCI, and to a lesser extent, Sprint. Unfortunately, all of the other carriers had to follow suit or they would be left in the dust for being honest!
Part two of this report will focus on the second component in the "Fogging of America, the "Universal Access Charge. It will also discuss how you can cut your phone bill regardless if you do or do not use long distance.