HIGHTOWER: Phone Company Pricing Scams

Every now and then, some "good" news comes along that causes you to start to cheer, but then you realize, "wait a minute, I've been had," so your cheers turn to jeers.In this category is the recent announcement by AT&T that it is going to stop overcharging us on our long distance bills. I was thrilled to hear about the reduced rate, 'til I realized that this means the phone giant has been overcharging me for years.Here's the story: For as long as I can remember, AT&T has charged much more for calls made during "business hours," 9 to 5, than in the evening. And lots of people would wait 'til after 11 at night to call long-distance because that's when AT&T's rates really dropped. When MCI, Sprint and other competitors came along, they simply mimicked AT&T's time-block pricing structure, charging more for calls made in the daylight hours.Why did they do this? No reason except because they could! "It was monopoly economics," confesses an AT&T vice president, not based on any difference in the actual cost of making a call at noon versus making one at midnight .Now, AT&T has announced a new flat rate of 15-cents a minute, no matter when you call, 24 hours a day -- they have stopped the time-block pricing scam. The bad news is they were scamming us; the good news is they've stopped. I guess we are supposed to be thankful for small favors. Like the guy says in the country song; "It felt so good when it stopped hurting."But don't get to feeling too good about AT&T's 15-cent-a-minute rate. It could be a lot lower. Guess what the total cost is for the phone company to transmit your long distance call from your phone to anyplace in the US? Not 12-cents, not a nickel, not even 2-cents -- how about 1/2-cent a minute.Once again, the phone company is reaching out to touch us -- right in the pocketbook.

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