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AT&T Raising Phone Rental Rates

March 4, 1986

NEW YORK (AP) _ Millions of people will pay more to rent their telephones this year as American Telephone & Telegraph Co. imposes the first nationwide rental increases since it was broken up in 1984.

The increases, ranging as high as 50 percent, will affect nearly half the nation’s households as well as some small businesses that are included in the residential category, AT&T spokesman Burke Stinson said Tuesday.

Only the Trimline Touch-Tone phone, which AT&T says is its most popular model, is unaffected by the rent increase.

The new rates are being phased in across the country from the beginning of this year through the end of the summer, Stinson said. Once they take effect, they will not change for two years, he said.

AT&T is raising the rates ″to remain competitive and enhance our phone profitability,″ Stinson said. The increases do not affect the purchase of phones. In spite of increasing competition, AT&T says it remains the biggest supplier of telephones for both sale and rent.

The company declined for competitive reasons to say how many phones are affected by the increase, but analysts say AT&T rents more than 40 million telephones.

AT&T agreed with the Federal Communications Commission not to impose an across-the-board increase in phone rental rates for residential customers for two years after it was divested of the regional Bell operating companies on Jan. 1, 1984.

AT&T increased rental rates in some areas to bring them in line with a national average, as permitted by the FCC. This is the first time the company has been free to charge what it wants.

The Trimline Touch-Tone phone, which AT&T says is its most popular model, is excluded from the rental increases. It will continue to rent for $4.60 a month.

The new rents include: the Trimline rotary, to $3.95 from $3.45 a month; the Princess Touch-Tone, to $4.60 from $4.05; the Princess rotary, to $3.95 from $3.15; the traditional Touch-Tone, to $3.55 from $2.85; and the traditional rotary, to $2.25 from $1.50.

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