Getting hung up on basic phone rate increases

AT&T customers saw their monthly rate for basic residential phone service jump 22% this month to $16.45. The increase followed a 23% rate hike last year. And you know what? That's the good news.

The bad news is that, beginning in January 2011, AT&T and other phone companies will be permitted to jack up basic rates as much as they want -- no regulatory limits will apply. "If you want to know what will happen then, look at how much their rates went up for directory assistance and call waiting and other services that were deregulated in 2006," said Denise Mann, who oversees telecom matters for the California Public Utilities Commission's consumer-watchdog division.