[ FCC ] Doc, ...
Thanks, You said it so much better than I could. I made an attempt and then erased. Good Show.
Ray
FCC set to impose landmark overhaul of phone charges
Reuters Story - May 06, 1997 19:12
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By Roger Fillion
WASHINGTON, May 6 (Reuter) - Regulators are expected
Wednesday to adopt a landmark overhaul of the nation's
telephone charges to better spread the financial pain of
ensuring affordable phone service for Americans.
The Federal Communications Commission also hopes its
controversial revamp will spur the $200 billion phone industry
to compete more fiercely for residential customers -- and not
just wealthy businesses.
"We're trying to reform the system of charges and subsidies
to make it more compatible with competition," said FCC Chief
Economist Joseph Farrell.
The new rules, which stem from last year's communications
law, are designed to keep basic residential phone rates at
current levels. Businesses and residences who make plenty of
long-distance calls would see their monthly phone bill drop the
most, according to industry officials.
Residential and business customers with more than one phone
line but who make few or no long-distance calls are expected to
see their costs rise. That would mean an added $1 or more a
month to maintain a home computer on a second line.
Aside from jump-starting competition, the rejigging in
charges is meant to cover the $2 billion to $3 billion cost of
wiring schools, libraries and rural hospitals to the Internet,
while also keeping phone service affordable for the poor.
Progress occurred this past weekend after AT&T Corp.
promised to lower its long-distance rates 5 percent to 15
percent if the FCC agreed to a hefty cut in the charges
long-distance carriers pay to access the local phone network.
AT&T Corp. sought a $1.7 billion upfront reduction in the
$23 billion a year in access charges long-distance carriers pay
the Baby Bells and other local phone companies.
Industry officials expect the FCC to ratify the reduction,
paving the way for AT&T to offer its first big rate cut since
1992. Other long-distance carriers are likely to follow suit.
The AT&T pledge -- while drawing criticism from members of
Congress and small businesses -- was applauded by consumer
groups who until then had attacked the FCC's plans.
"This calms the waters more than otherwise," said analyst
Scott Cleland of Schwab Washington Research Group.
Industry executives also expect the rules will:
-- Keep the monthly "subscriber line charge" customers pay
to the local phone company at $3.50.
-- Boost the charge for residential customers with more
than one line to $5 a month from $3.50, and to roughly $7 from
$6 for for multi-line businesses.
-- Require long-distance companies to pay local carriers a
new "pre-subscribed line charge" for each long-distance
customer. The charge could be passed on to customers and is
expected to range from 75 cents a month for single-line
residents to $4.50 for multi-line businesses.
"Second phone lines for home-based business or Internet use
and small businesses will be saddled with the brunt of these
increases," complained the Small Business Survival Committee, a
small business advocacy group.
The FCC plan also is drawing flak from members of Congress
anxious to see that local phone rates do not rise -- especially
in reaction to AT&T's weekend announcement.
"Any local telephone rate increases resulting from the
(FCC's) actions to modify access charges would be sharply
contrary to congressional intent in passing (last year's law),"
Sen. John McCain (R-Az.) and Reps. W.J. "Billy" Tauzin (R-La.)
and John Dingell wrote FCC Chairman Reed Hundt.
Analysts said that Congress, in passing last year's bill,
saddled the FCC with a mammoth task. "They're trying to bring
about a system that will be more conducive to competition while
navigating around some very perilous political shoals," said
Dwight Allen of Deloitte & Touche Consulting Group. |
