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December 10, 2002

Be aware what MCI has been, and will be, doing to your bill

From: Wichita Eagle, KS - 10 Dec 2002

Philadelphia Inquirer

If you're still an MCI customer for residential long distance, it might be that you've remained happy with its prices and performance, or been lured by its new unlimited-calling "Neighborhood" plans.

Or it might be that you're the loyal sort, and reluctant to abandon MCI while it's down, as it has been since its parent company, WorldCom, filed for bankruptcy in July.

But if your reason is inertia, or that you're just not paying attention, then it's time to look more closely at your bills - at what MCI has already done to them and what it plans to do in coming months.

Although MCI says there's no connection between the bankruptcy and a recent spate of rate increases, the fact is that a company in WorldCom's position has to do what it can to boost cash flow.

And there are worrisome signs that WorldCom may be trying to ease its pain by siphoning a little extra from your wallet each month.

Some prices rose in September, including per-minute rates for MCI's Anytime Classic and Anytime Connection calling plans, which climbed 14 to 17 percent.

Last month, MCI announced more - and steeper - increases in various residential prices, with per-minute rates rising as much as 80 percent.

A sampling: As of Monday, evening and weekend rates on its Everyday Classic, Everyday Savings and Everyday Plus calling plans rose 80 percent, from 5 cents a minute to 9 cents a minute. The monthly fee for its Anytime Advantage plan rose 51 percent, from $3.95 to $5.95 per month.

And that wasn't the end of it. This week, more increases were announced, including some that affect broad swaths of MCI customers.

Starting next month, receiving your long-distance bill along with your local phone bill will cost you $2.50 a month instead of $1.50. And MCI is raising its Universal Service Fee from 9.9 percent to 10.5 percent.

To top that off, in February, MCI plans to add a second fee - dubbed a "Carrier Cost Recovery Charge" - to pay for government-mandated expenses. It says the new charge will cover the costs of services to the hearing-impaired, number portability, and "federal regulatory fees."

Kate Dean of the nonprofit Telecommunications Research and Action Center (TRAC), which follows long-distance pricing, says no other company charges such a fee, though the inspiration for it is hardly new. For the last year, Dean says, Sprint has been tacking a 1.08 percent "property tax" onto its long-distance bills.

"It's another way of passing costs off to the consumer," Dean says.

Lauren B. Kallens, a WorldCom spokeswoman, says the recent price hikes are part of the normal course of business and "absolutely have nothing to do" with the bankruptcy. Most of the increases in per-minute rates and monthly fees come in plans that MCI no longer markets, she adds. (For a list of the recent rate changes, see

"We're constantly listening to our customers and developing new plans," Kallens says. "We actively contact our customers and let them know about plans that may better fit their needs."

That may be true, and MCI still deserves credit for being an innovative competitor, befitting a company that helped vanquish Ma Bell's monopoly.

For instance, its Neighborhood Complete plan offers unlimited local and long-distance calls, both in-state and state-to-state, for $50 a month. Even with taxes and surcharges (about $15 in Pennsylvania or $12 in New Jersey, Kallens says), the plan could offer big savings to the right kind of caller: one who, month in and month out, makes a large volume of long-distance calls.

But why raise rates 80 percent on an older plan? In particular, why raise them on a plan such as Everyday Savings, which already charges a $3.95 monthly fee, a 25-cent-a-minute peak rate, and a $6 monthly minimum?

There's only one answer that comes to mind: Because it can, and because it's counting on at least some customers not noticing, or not noticing right away.

So look at your bill. Somebody has to pay for the WorldCom collapse. But in a free market, it doesn't have to be you.

© Wichita Eagle