Newspaper article St Louis Post-Dispatch (MO)

Ruling May Lower Long-Distance Bills Action by FCC Went Too Far, Say Local Phone Companies

Newspaper article St Louis Post-Dispatch (MO)

Ruling May Lower Long-Distance Bills Action by FCC Went Too Far, Say Local Phone Companies

Article excerpt

Long-distance telephone bills could go down as much as $1 billion this year because of a federal agency's decision to cut the payments that big carriers must make to local companies.

But the savings for the average customer could be pocket change.

The Federal Communications Commission voted 4-1 Thursday to order a cut in the charges that long-distance carriers pay to local phone companies to begin and end long-distance calls. Commissioner Susan Ness voted against the plan, saying it "shortchanges ratepayers."

Long-distance customers will see roughly 2 percent trimmed off their total bills by the action, said Mark Uretsky, a chief economist at the FCC's Common Carrier Bureau.

The average long-distance bill for an AT & T customer is $17 a month, according to spokesman Herb Linnen. Two percent off that would save a customer 34 cents.

"It's just a little bit of pocket change for the average long-distance telephone customer," said Bradley Stillman, legislative director of the Consumer Federation of America. "We're glad to have it, but it's nowhere near what customers deserve."

The federation and long-distance companies said the FCC didn't cut the payments to local companies deep enough. But local phone companies said the FCC went too far, depriving them of a fair price for their service and penalizing them for being efficient.

Bell Atlantic Corp. plans to appeal the FCC's order, which Jim Young, vice president and general counsel, described as "punitive."

Dan Hubbard of Southwestern Bell said the FCC should order long-distance companies to cut rates as much as local telephone companies are being forced to cut access fees. Hubbard said Southwestern Bell was dismayed that the FCC decision was an interim ruling rather than a final plan.

The payments, called "access charges," amount to $20 billion to $22 billion a year, the FCC estimates - roughly the annual revenue of the entire cable industry and twice the revenue of the cellular phone business.

The $1 billion savings this year is based on a 4 percent to 5 percent reduction in access charges and an additional one-time reduction for some companies of 2.8 percent, FCC officials said. …

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