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MCI Ordered To End 'Casual' Rates
November 11, 1998
WASHINGTON - The Associated Press Federal regulators ordered MCI WorldCom Tuesday to stop charging certain customers its highest rate, saying the practice is ''inherently misleading.''
The Federal Communications Commission's action responds to two complaints against MCI, made before it merged with WorldCom Inc., over so-called ''casual calling'' or ''nonsubscriber'' rates.
These are customers who, for various reasons, are dropped from the phone company's billing system. Once that happens, customers who make long-distance calls are charged the company's highest rate.
MCI's casual customers pay a $2.49 surcharge and 38 cents a minute for each call.
MCI spokesman Brad Burns wouldn't say how many customers would be affected by the FCC's order.
The FCC stopped short of ordering MCI to make refunds to affected customers, saying individual customers would need to file complaints to the commission first to be eligible for refunds.
MCI, however, was ordered to make refunds to the two companies that filed the complaints: the law firm Halprin, Temple, Goodman & Sugrue and Freedom Technologies Inc., a telecommunications consulting company owned by Albert Halprin, a partner in the law firm, and his wife.
Together the refunds would total ''hundreds of dollars,'' said Kevin McGilly, who spoke on behalf of both companies.
Customers who choose MCI as their main long-distance carrier ''may reasonably consider themselves ''subscribers,'' the FCC said. ''The practice of charging these customers nonsubscriber rates is inherently confusing and therefore unreasonable,'' the commission concluded.
The FCC's action applies only to customers who selected MCI as their primary long-distance carrier and then were billed at the company's highest rate. It does not apply to people who have not chosen MCI as their primary long-distance carrier but use it occasionally by dialing an access code.
The FCC said MCI's tariff for its ''nonsubscriber'' rates violates communications laws and regulations by not clearly and explicitly stating when customers would incur these charges.
MCI WorldCom responded that it is ''confident our charges and practices fully conform with our tariffs and our tariffs fully conform with all applicable laws and regulations.''
MCI's rates are not subject to FCC approval, but the commission has the power to ensure phone rates are ''just and reasonable.'' The FCC concluded that MCI's practice of charging nonsubscriber rates is unreasonable, but didn't rule on whether the rates themselves are unreasonable.
Industrywide, casual customers account for 3 percent to 4 percent of all U.S. long-distance customers, MCI officials have said.
Albert Halprin, a former regulator with the FCC, estimates consumers are being overcharged billions of dollars through these casual calling, or nonsubscriber, rates.
[Copyright 1998, Associated Press
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