The New Year started off with a wave of ILEC price increases that took effect in January. AT&T and Verizon were especially active in their regions. Verizon increased monthly rates for numerous business custom calling features and increased local exchange service rates for business customers in Pennsylvania.
We saw more increases to business local exchange service rates by AT&T in Illinois, Indiana, Kentucky, Louisiana, Michigan, Mississippi, and Wisconsin. And as you can see below, the monthly charge for an individual flat rate business line here in Florida has doubled from $57 to $114 in just three short years.
AT&T business customers in both the former “BellSouth” and “SBC” territories also saw an increase in traditional two-point Message Telecommunications Service (MTS), or 1+ intraLATA toll rates, from $1.50 to $1.73 per minute. It is not unusual to see rate hikes in toll usage once or twice per year. Our competitive rate analysts were reminded of this when purging files in the office recently. Twenty years of tariffed MTS/OSP changes fill up a lot of boxes!
We tariff geeks had fun reminiscing at these historical tariff pages. Who remembers when an operator station call was less than $1.00 per minute and based on mileage?
Now we’re seeing an end to an era with AT&T’s announcement that it will be discontinuing various types of operator services, such as Billed to Third Party, Collect, and Person-to-Person, effective on or after March 18, 2016. Verizon has filed a similar notice to be effectiveon or after July 8, 2016.
AT&T recently introduced a termination charge waiver for service migration from Centrex to Business Voice over IP (BVoIP) Service. If a customer migrates an AT&T Centrex Service or Service Component (referred to as the “Terminated ILEC Service”) to a qualifying AT&T BVoIP Service (referred to as the “Replacement Service”), then the Early Termination Charge associated with the Terminated ILEC Service will be waived provided:
- The Terminated ILEC Service has been installed at the customer site for no fewer than 12 months;
- The term of the Replacement Service agreement is equal to or greater than the remaining term for the Terminated ILEC Service;
- The Replacement Service is installed at the same customer sites as the Terminated ILEC Service; and
- Activation of the Replacement Service at the customer site occurs within 90 days of termination of the Terminated ILEC Service at that customer site.
Residential customers were not exempt from rate increases in January. Verizon increased local exchange service rates for customers in Maryland, Pennsylvania, and Texas. AT&T increased residential line rates in Arkansas, California, Illinois, Michigan, Missouri, Nevada, North Carolina, Oklahoma, Texas, and Wisconsin. Residential intraLATA toll rates increased to $0.50 per minute in North Carolina and $0.40 per minute in Tennessee.
AT&T (BellSouth) implemented rate increases to their Area Plus® calling plan, which provides residential customers with a flat rate access line with unlimited calling to all exchanges in the subscriber’s LATA. AT&T also increased rates for its Complete Choice® packages. Complete Choice® includes a residential access line and various custom calling features for $32.00 per month (Basic) or $36.00 per month (Enhanced).
Upon reviewing last week’s updates, you should be prepared for even more increases in February! With so many rate changes during the course of a year, it can be challenging for CLECs, especially resellers, to keep their desired profit margin. When retail costs increase, so do your resale costs. Tracking ILEC rate changes is vital in positioning your local products to your best business advantage.