My understanding is that they're at 0% and they eat the 1% (this was also mentioned in an article posted here in the last week). This is somewhat untenable over the long term, but to date, they have not introduced a change (to my knowledge). The guys that previously only had the 1% Visa/MC fee got caught a bit by the change in policy. For instance, my credit union had a period of a bit less than a year where they were at 0% because they didn't have the software set up to tack on 1% for all foreign-originated charges. In contrast, those banks that previously tacked on an extra 2% could pretty easily change their software to do 3%.

That said, I use my Citi PP and Amex SPG when abroad. PP earns ~2%, 3% fee = -1%. Amex SPG I count as ~1.9%, ~2% fee = -0.5% or so after accounting for Amex's less competitive exchange rate. These options are competitive with a no reward, 1% card and don't have to deal with another piece of plastic.