In a telephone-merchandising study commissioned last year by the New York State Attorney General's office, "researchers" at 115 locations were asked to call their telephone business office to find out the cost of installing phone service in a hypothetical apartment.
In 75 out of 115 calls, the service representative failed to describe the service plans available; 80 percent of the callers believed they should go to a PhoneCenter Store for better information; 40 percent believed they had to.
All of the surveyors went to their local PhoneCenter Store for further information. Almost 70 percent of them did not know afterward if they would be renting or owning the entire telephone; only 15 percent understood the true cost of service.
Consumers are not used to comparison-shopping for telephone equipment," concluded the attorney general's office. "They believe the phone company has all the information and that they will be told what the best deal for them."
The New York Attorney General's office has filed several briefs before the Public Service Commission, asking them not to increase the phone company's monopoly rates to cover the cost of PhoneCenter Stores, where they contend the company persuades customers to purchase and lease its telephone equipment as a condition of obtaining basic telephone service.
"Although a sales pitch, discounts, and a promotional campaign may be perfectly acceptable for a nonmonoply enterprise such as Sears or Radio Shack," says the Attorney General's office, a monopoly supplier of service "cannot be allowed to use its captive audience in this manner."
Spokespeople from Bell argue that without the income from rental of Bell equipment, or long-distance calls, they won't be able to keep residential rates low.
Counters Lee Richardson, telephone watchdog for the Consumer Federal of America:
"They make that claim for every bit of revenue they get -- that it's helping the residential customer -- and they just haven't shown it. The industry has never really geared up for competition so it doesn't have good cost accounting. The money is just all thrown into one big pot. They haven't even said what the profit on the PhoneCenter Stores is.
"AT&T is heading toward a policy of disaggregating its charges, though. Ma Bell's days of cradle-to-grave we-do-it-all service are over."