"We're already seeing a leveling off in the price of a T1 line," said Colleen Boothby, an attorney at Levine, Blaszak, Block & Boothby LLP in Washington, which represents large corporations in negotiating contracts with service providers and argues issues before the Federal Communications Commission. "Don't count on those 5 percent annual discounts anymore. Get used to prices going up." She made the comments to attendees at Mobile & Wireless World, which is sponsored by Computerworld.

Boothby urged IT managers to discuss the upcoming cost increases with their business managers and to organize themselves to lobby elected officials and regulators to keep costs in check.

In recent months, a T1 line carrying voice and data to a business was as low as US$200 per month, but the downward slide has stopped, she said.

She predicted that prices for T1 lines and many other types of network services will only increase. One notable reason is that six major carriers merged to create three new entities last year: ATT Inc., which merged with SBC Corp.; Verizon Inc., which merged with MCI Corp.; and the joining of Sprint Corp. and Nextel Communications Inc. With those and other mergers in the works, there is reduced competition, Boothby said. Plus, the mergers took out of the mix some of the companies that were cutting prices in order to win business, Boothby said.

She also said there is pressure to change the Universal Service Fund, a fee that is now 10.9 percent of phone bills paid by users, where the proceeds are used to support communications services for rural and low-income areas. In the current year, the funds raised will exceed $7 billion, she said.