That is one of the weirdest excuses to raise rates I have ever seen. This ad would tick me off because it would remind me how much it costs to keep my car running, too.
I'm sure the cost of advertising also went up during that time. Why not also say, "we have to raise your rates because it cost a fortune to tell you we're raising your rates."
Crap like this was immensely annoying back then. I remember the local power company advertising constantly -- as if we had a choice! You're a monopoly and I can't even see this ad if I'm not paying you.

However these ads served a strange purpose. This was as close as they got to transparency and accountability before asking the local regulatory agencies for price increases. This was a vague attempt to mollify during the worst period of inflation of the Twentieth Century.

Oh, and this was a way to stall the eventual AT&T breakup.
I noticed that the tone of the ad is almost similar to the tone of the notes I get when our phone/Internet rates or rent is about to go up: "Look, we really don't want to do this, but (excuses)! Therefore, give us more money!"


My local power company *is* a monopoly, as most utilities tend to be, and they advertise constantly too, trying to justify rate hikes and make the public hate them less. (Guys, hate to break it to you, but we're stuck with you, no matter how badly you fail).
One thing we learned from the Enron scandal and how it messed up California back in '99: you can screw up a utility. You can make rolling blackouts possible in the middle of extreme wealth. You can also be assured someone will go to jail if you do this to rich people.