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AT&T plans revised rate hike amid pressure

The dominant U.S. long-distance carrier says it plans to propose yet another rate increase just days after backpedaling from a similar plan under pressure from consumer groups.

AT&T, the dominant U.S. long-distance telephone carrier, said today it plans to propose yet another rate increase just days after backpedaling from a similar plan under pressure from consumer groups.

The company on Wednesday withdrew rate increases that applied to residential customers who were not on any discount calling plans.

The rate increases are necessary for AT&T to meet its sales projections, company spokesman Mark Siegal said.

"The rate increases will not impact cable rates or Internet access rates--they are focused on 'basic' residential rates," said Siegal.

Siegal did not outline the details of the revised rate hikes, saying only that the company would put them into effect "just as quickly as we can."

The goal of the price increases was to recoup diminished revenues stemming from AT&T's decision to lower rates on Sundays, a day when many consumers make calls. Lower usage patterns can actually cost carriers money because simple customer-account management and billing can supersede their lower profits, analysts have noted.

Telecommunications companies such as AT&T are scrambling to sign up the so-called power users, enticing them with low-cost bundled services but recovering profits through those customers' high usage.