Since deregulation in California, landline costs skyrocket

When California's telephone market was deregulated in 2006, consumers were told that increased competition would improve service and reduce prices. It hasn't worked out like that.

For some consumers, monthly phone rates have risen 260% in the last five years. Meanwhile, quality of service declined substantially earlier this year when AT&T slashed the number of minutes available under its measured plan 25%, to 168 a month from 225, and raised the price of extra service to 6 cents from 4 cents a minute. Again, not what officials said would happen. Now consumers are filing a complaint with the California Public Utilities Commission. The Utility Reform Network, a San Francisco consumer advocacy group, said it's lodging the complaint on behalf of all AT&T customers. A draft of the complaint alleges that AT&T's rates for measured and flat-rate service far surpass "just and reasonable levels" and are the highest of all phone companies'. Natalie Billingsley, a senior official at the PUC's consumer-protection arm, the Division of Ratepayer Advocates, didn't mince words when I asked about the effect of phone deregulation. "It has substantively been a failure," she said. "All we have seen since deregulation is a constant increase in prices."