Just As I Thought

The market works wonders. Just like with gas.

I’m not really leftist enough to want the government regulating every aspect of business nor do I think price controls would be a good idea, but really — the way companies are gouging consumers left and right is getting crazy.

I’m not really leftist enough to want the government regulating every aspect of business nor do I think price controls would be a good idea, but really — the way companies are gouging consumers left and right is getting crazy. Yeah, the idea is that the market will adjust because consumers will simply not pay, but when it comes to staples of life and monopolies (despite the supposed “choice” in phone companies and power companies, there’s still only one player in these industries) the rising prices and ridiculous fees are getting unbearable.

A couple of years ago, state regulators granted phone companies the freedom to price services pretty much as they pleased. The rationale officials gave at the time was that a competitive marketplace would keep prices low for consumers.

In fact, the California Public Utilities Commission’s Division of Ratepayer Advocates found in a report last month that “significant rate increases” have occurred since then and recommended a return to price controls until more research could be done.

From 1984 to 1998, Pacific Bell (which would become SBC, which would become AT&T) allowed five free 411 calls per month. All additional calls were 25 cents each.

AT&T now charges $1.50 to look up local numbers and $1.99 for all others.

“The marketplace changes and you have to change your offerings,” said John Britton, an AT&T spokesman.

He declined to elaborate on how the changing marketplace has forced AT&T to further reduce the number of free 411 calls customers get.

Perhaps he was referring to the fact that Verizon Communications Inc. used to offer four free 411 calls monthly, but in April it cut that to zero. Verizon charges 95 cents to look up local numbers and $1.50 for all others.

Whatever else, the changing marketplace has been lucrative for Verizon and AT&T.

Since price controls were lifted in 2006, the Division of Ratepayer Advocates found, AT&T has increased the average price of three-minute daytime local calls by 34%, evening calls by 92% and nighttime and weekend calls by 233%.

AT&T’s fee for call waiting is now 86% more expensive, and the charge not to have your name printed in the phone book has gone up 346%, the agency found.

In a recent briefing for investors, AT&T boasted that its average monthly revenue per primary household line “ramped steadily over the past several quarters,” to $60.16 in the first quarter of 2008 from $57.08 a year earlier.

The company pocketed $11.95 billion in profit last year, up more than 62% from a year before.

[LA Times]

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