November 14, 2007

MADISON - The Citizens Utility Board (CUB) today filed comments with the Public Service Commission of Wisconsin (PSC), urging the agency to continue monitoring the impacts of its decision to deregulate the pricing of basic phone service for AT&T customers.

Technically known as "basic local exchange service," basic phone service provides customers with a dial tone, a line connecting the phone to the telephone network, the ability to make local calls, and access to long-distance service.

Two years ago, the PSC deregulated the prices AT&T could charge for basic phone service. The PSC essentially placed a bet that competition would restrain AT&T's price hikes. The PSC hedged its bet by restricting the amount AT&T could increase rates during 2006 and 2007.

To determine the impacts of its decision, the Commission had its staff prepare annual reports on the impacts of its order deregulating AT&T's phone prices.

Predictably, AT&T raised its rates from $8.20 to $10.78 on May 1, 2006, and to $12.50 on May 1, 2007. Starting December 1, 2007, all bets are off and AT&T can charge whatever it wants for basic phone service.

The annual reports prepared by PSC staff have provided valuable information on the impacts of phone deregulation. For example, land-line competitors to AT&T are providing service to fewer customers today than two years ago. AT&T itself is losing customers who use basic phone service, but whether AT&T's decline in residential lines will continue remains to be seen once AT&T begins offering video television services.

CUB is urging the PSC to continue monitoring AT&T's basic phone service for two more years, so it and the public can determine whether AT&T is fairly providing local phone service.

"Without continued reporting, the public will be hampered in knowing how price deregulation has impacted retail customers, especially low-income and disadvantaged persons. The PSC shouldn't deregulate in the dark," concluded Charlie Higley, CUB executive director.

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The Citizens Utility Board of Wisconsin is a member-supported nonprofit organization that advocates for reliable and affordable utility service. CUB represents the interests of residential, farm, and small business customers of electric, natural gas, and telecommunication utilities before regulatory agencies and the courts.