<font color=red>OT - Long-Distance Firms Adding 'Single Bill' Fees
By Caroline E. Mayer
Washington Post Staff Writer
Thursday, March 29, 2001; Page A01
The convenience of paying for local and long-distance telephone service on the same bill now has its own unique cost: Some of the nation's biggest long-distance telephone companies are beginning to charge customers $1.50 for the privilege.
Sprint Corp., the nation's third-largest long-distance carrier, began adding the new fee to bills in January without notifying customers directly of the change. AT&T Corp., the largest long-distance company, has begun sending out notices nationally informing customers that it will impose the fee next month -- unless people call and request a separate, free bill. Locally, customers are being told they will simply begin to receive separate bills.
WorldCom Inc., the nation's second-largest long-distance carrier, which markets the MCI brand, added the fee last year in some areas of the country but has not begun doing so in the Washington area. A company spokeswoman said consumers will be notified when it does.
The single-bill fee comes at a time when long-distance carriers are trying to wean customers from their ties to the local phone company and establish a more direct billing relationship with them. Such relationships have become increasingly important since Congress acted in 1996 to deregulate the telecommunications industry, opening the door to competition between local and long-distance telephone companies.
For instance, Verizon, the Washington area's local phone company, now is the nation's fourth-largest long-distance company, having won permission to sell service in New York, where it has signed up 1.4 million customers.
AT&T, MCI and Sprint hope that by giving customers an incentive to ask for separate bills they can create a new channel to ply people with promotions and new services. The companies also say the new charge is needed because local phone companies are charging them more to process bills.
Consumer advocates, though, question whether the new charge is justified. They also disapprove of the way it has been imposed, especially by Sprint, which failed to alert some customers that the fee was coming.
Verizon, meanwhile, took issue with rival Sprint's claim that it had raised rates, saying the fee was considerably more than what it charges for its billing services. "These rates are in the pennies, not the dollars," said Verizon spokesman Eric Rabe.
Sprint's single billing fee has been in effect since January, but Gene Kimmelman, co-director of Consumer Union's Washington office, said he didn't realize he'd been paying the $1.50 charge until this month when his wife asked him what the new "single bill fee" was on his Verizon/Sprint bill.
Kimmelman said the charge was easy to overlook because it was listed among the routine monthly charges that include taxes, the universal service charge, and any extra fee required for a special calling plan.
"How can this be a responsible business practice to blindside consumers by adding new fees without even notifying them?" asked Kimmelman, who called for an investigation by the Federal Communications Commission.
FCC officials yesterday said Sprint listed the fees in rate-plan documents, known as tariffs, that long-distance companies are required to file with the government. As long as the charges are included in the documents, the FCC traditionally doesn't challenge them.
The long-distance firms said the new fee is necessary for competitive and economic reasons.
"Where a joint bill made sense once, it doesn't make sense anymore," said AT&T spokesman Mark Siegel. "We want to communicate directly with the customer, and one of the best ways to do that is through direct billing; we can tell customers about new services, products, special promotions and discounts. We have a very, very limited ability to do that in a local company bill, especially now that we're in competition."
Beyond that, Daniel Alcazar, vice president for Sprint's national consumer network, said that it has become too costly to let the local phone companies bill and collect for the long-distance companies. Alcazar said the local phone companies have raised their fees substantially, by 30 percent just this year.
"We are simply trying to recover this fairly hefty price increase. Historically we were willing to absorb those costs, but when they raise prices by 30 percent . . . we have no option but to pass those costs through to the consumer."
Kimmelman, the consumer advocate, said if the long-distance companies are adding a fee for a service that was once included as part of their rates, then "the per-minute billing rates charged consumers ought to go down."
"Otherwise," he added, "it's another a sleight of hand" designed to garner more revenue.
Sprint automatically waives the fee for people who spend more than $40 a month on long-distance service. The only way for other consumers to avoid paying the fee is to call Sprint and ask to be billed directly, Alcazar said.
New customers are told about the fee and given a billing option when they sign up, while existing customers are supposed to be notified when they call to discuss their bill or service. However, when Alcazar was told that existing customers calling about service were not told about the fee, he said, "well, that's good feedback."
In some parts of the country, including parts of the Washington area, AT&T has already been sending separate bills to many of its customers. But now, the company plans to do it all across the country. And AT&T's Siegel said the company would even prefer it if customers agreed not to receive any paper bill, but review their charges online and pay that way. In that case, AT&T would automatically bill a customer's credit card or bank account monthly. To encourage this, AT&T will give consumers $1 a month credit, and also a $25 gift certificate at Amazon.com.
MCI also is offering a $1 month credit for customers who pay their bills online.
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