Lousy service is only one of many reasons Ma Bell is sinking fast. High prices and an upcoming merger might be just the prodding you need to bail out.

By Liz Pulliam Weston

All Jana Fleming did was move from one apartment to another within her Dallas complex earlier this year. That simple change of address led to a months-long battle with AT&T that endangered her credit rating -- not to mention her sanity.

AT&T erroneously charged a $216 disconnection fee for her high-speed DSL service, which she actually took with her to the new address. After numerous calls, hours on hold and six certified letters, AT&T issued a $342 credit -- to Fleming’s telephone account. Her DSL account was turned over to a collections agency.

„It’s almost comical,“ Fleming said. „It’s just been so absurd.“

Fleming believes her problem may be resolved; AT&T finally credited the right account and called off the collection agency.

A billing dispute kiboshes a car loan
The consequences for Laura Miller of Overland Park, Kan., were more serious. AT&T reassured her that a $36 charge she disputed would be corrected in her next billing cycle, Miller said; instead, the company turned the account over to a collection agency. As a result, Miller said she was denied a car loan and her credit card interest rates were hiked.

Miller said she needed the intervention of the Federal Communications Commission before AT&T acknowledged its mistake and cleared her credit report.

Dori Patrick hasn’t been so lucky. The Hackensack, N.J., woman received a $700 phone bill that she says was caused by AT&T Wireless switching her from a $35-a-month cell plan to one that charged her $3.95 a minute. As she fought the bill, the company added fees and charges that drove the total over $1,900. She says she hasn’t been able to find anyone at AT&T Wireless who can help her resolve the problem.

‘We don’t care; we’re the phone company’
It’s not as if AT&T horror stories are anything new. Those old enough to remember Lily Tomlin’s Ernestine the Operator can recite her mantra: „We don’t care. We don’t have to. We’re the phone company!“

But consumers may be bearing more abuse than usual as the former Ma Bell sheds her consumer businesses and as the company’s spin-off, AT&T Wireless, prepares to merge with Cingular Wireless.

The problems are acute enough that some industry experts are recommending AT&T customers consider dumping the companies. Consider:
Of the six largest cell-phone carriers, AT&T Wireless generated the most complaints overall and the most complaints per subscriber last year, according to FCC records obtained by Consumers Union. AT&T Wireless had 3.39 complaints per 10,000 subscribers, compared to best-ranked Verizon’s 0.76. (Cingular, which is expected to complete its purchase of AT&T Wireless by the end of the year, ranked fourth with 1.33 complaints per 10,000.)

AT&T Wireless’s „customer care“ ratings, as measured by J. D. Power, plunged from above average in 2003 (four of a possible 5 stars) to below average this year (two out of 5 stars).

AT&T Corp.’s deteriorating financial condition recently led major rating agencies to downgrade its debt to junk bond status. Currently the nation’s largest long-distance carrier, AT&T announced July 22 it would stop marketing its residential local, long-distance and Internet services altogether -- an exit strategy that analysts say will lead to higher charges on its remaining consumers.
„They’ve decided they are not going to market to any new long-distance customers, but they still have all the same costs and overhead,“ noted Bill Hardekopf, CEO of phone shopping site SaveOnPhone.com. „If you (remain) an AT&T customer, your bill is not going to go down.“

AT&T’s pool of residential customers, already shrinking by 10% a quarter, is expected to be all but empty within two years.

Also shrinking are the companies’ payrolls. Ferociously competitive markets have caused both AT&T and AT&T Wireless to lay off employees, which means the remaining workers have more to do -- and your problem has a greater chance of falling through the cracks.

Merger with Cingular may bring more confusion
The companies, of course, insist that customer service hasn’t suffered. An AT&T Wireless spokesman dismissed the FCC complaints as „an extraordinarily small number“ and said the company quickly resolves any problems.

Even if that’s true, AT&T Wireless’ takeover by Cingular is bound to generate more hassles with billing and customer service, said telecom expert Patrick McDugan, as the two huge companies merge their systems.

„I would be very surprised,“ said McDugan, vice president of operations for telecommunications shopping service TeleBright, „if things got smoother before they got even uglier.“

Any large-scale merger tends to generate customer confusion and technical glitches, he said. In this case, however, neither company is compensating with any great deals for consumers.

„I haven’t seen anything on the market that would make me choose either one of them right now,“ McDugan said. „The upside is not such that it’s worth the risk.“

Will cell phone rates come down?
It’s a tossup whether the merger will improve consumers’ prospects down the road. McDugan predicts the merged wireless company will be a worthy competitor to Verizon’s superior nationwide network, and the competition could lead to price cuts. Consumer groups are arguing the opposite, saying the merger is anti-competitive. The Consumer Federation of America and Consumers Union recently sent a letter to 10 state attorneys general urging them to oppose the combination.

In any case, I wouldn’t suggest bailing out of your AT&T Wireless contract, if you have one -- the hefty early termination fees usually make that a bad idea. But if you’re shopping for a service, McDugan suggests going with a competitor until the dust clears six to 12 months from now.

As for long-distance: You probably should have switched long ago. AT&T was never the cheapest solution for long-distance calls, and it’s now much pricier than most of its competitors, Hardekopf said.

If you remain an AT&T loyalist, you should take the same steps as any smart telecom customer to handle problems that may crop up, such as:
Watch your statements. You’ll want to jump right on any billing errors and question any charges you don’t understand.

Take notes. When you call to complain, use the bill itself as a notepad to write down when you called, with whom you talked and what was said. (You can use a notebook, of course, but the bill is usually handier and perhaps less likely to be lost.)

Follow up in writing. Don’t assume your problem with be taken care of on the first, third or even 10th try. Send a letter (certified, return receipt requested) to customer service outlining your complaint and summarizing your telephone conversations, including any resolution that was promised. If the problem isn’t taken care of by the next billing cycle, send another letter.

Monitor your credit reports. Several readers have told me their disputed telecom bills were turned over to collections after only a few months had passed -- and sometimes while the company was still reassuring them that the problem would be resolved. If a collection action shows up on your credit reports, you’ll want to begin the credit bureaus’ dispute process immediately.
You should also:
Contact the FCC. Unlike some other regulators that only act when they receive a pattern of complaints, FCC actually has an informal mediation process that can help an individual solve a telecom problem. Many readers have told me the agency was able to quickly settle longstanding fights.
„We’ll get involved,“ said FCC spokeswoman Rosemary Kimball. „We do have good luck getting folks satisfaction for their complaints.“