<A> FCC Chief Suggests Long-Distance Cos Reneged On Lower Rates
WASHINGTON (Dow Jones)--The nation's top telephone regulator suggested Thursday that big long-distance carriers may have reneged on promises to reduce consumer phone bills.
"They said that if we cut access charges, then they would cut long-distance bills," said Federal Communications Commission Chairman William Kennard. "Have they done so? Well, they have yet to show me that consumers got the promised savings."
Kennard said the FCC had trimmed access charges last year by almost $2 billion, part of Congress' push to revamp the complex $23 billion web of telephone subsidies.
Access charges are paid to local carriers, like the regional Baby Bells, to hand off calls from long-distance networks. The 1996 telecom law called on the FCC to overhaul the access fee system so that it wouldn't unfairly skew emerging telecommunications competition.
Long-distance carriers like AT&T Corp. (T) and MCI Communications Corp. (MCIC) promised to pass access charge reductions through to consumers dollar-for-dollar.
Kennard, in a speech here, said he sent letters Thursday to the top executives of AT&T, MCI and Sprint Corp. (FON) asking them to detail how they've shared lower costs with consumers.
"And if they have not passed their reduced costs on to their customers - if they have chosen just to call that a couple of billion in extra profits - well, I want to know that too."
Long-distance giant AT&T said it welcomed the chance to respond to FCC Chairman Kennard's request.
"The facts are quite plain," said Rick Bailey, AT&T vice president for federal government affairs. "The average price customers pay for AT&T long-distance service is going down faster than the average rate we pay for access to our customers."
Bailey said that by June 30, the amount customers will save in lower long-distance rates will be hundreds of millions of dollars more than the access charge reductions.
"The real problem customers face is the unconscionable access fees the local telephone monopolies charge to complete long-distance calls," he said.
A spokeswoman for MCI agreed, saying the FCC should order local carriers to collect for themselves the "unjustified billions in access charges now levied on consumers and long-distance companies."
Kennard, in letters to the three big long-distance companies, cited complaints from the U.S. Telephone Association, which represents the Baby Bells and other local carriers.
USTA President Roy Neel, in a Feb. 11 letter to the FCC chief, said long-distance carriers increased charges to customers by about $2.3 billion with no offsetting long-distance decreases.
Long-distance carriers, he said, "are indeed making a substantial, new profit."
Not so, said MCI. "Every MCI customer whose made a long-distance phone call on Sundays in the last six months knows that long-distance rates have gone down and that access charge savings have been passed through," the spokeswoman said, referring to the companies Sunday rate of 5 cents a minute. |
