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Technology Stocks : IDT *(idtc) following this new issue?* -- Ignore unavailable to you. Want to Upgrade?

To: Marty Rubin who wrote (10849)	7/12/1999 9:28:00 AM
From: Marty Rubin	Respond to of 30916

Most Long-Distance Plans Now Charge Fees, Consumer Study Says Washington, July 9 (Bloomberg) -- Most long-distance companies in the last year have begun to charge customers monthly fees or require spending minimums, according to a consumer group survey. A review of 34 long-distance calling plans offered by 15 carriers conducted by Consumer Action found that 17 plans carry monthly fees of as much as $5 and four have monthly minimum requirements. In 1998, a Consumer Action study of 32 plans offered by 14 long-distance carriers found only nine plans with monthly fees and two with minimums. ''This is a much-changed long-distance landscape,'' said Linda Sherry of San Francisco-based Consumer Action, an advocacy group founded in 1971. Long-distance market leaders AT&T Corp., MCI WorldCom Inc. and Sprint Corp. are among the companies that have switched course in the last year, the study said. AT&T and MCI now charge monthly minimums of $3 and $5, respectively, to those who don't opt for a calling plan -- an option to pay a set rate for long distance. Sprint charges a $5 minimum on its calling plans. Sprint customers can avoid the fee by not enrolling in a calling plan. Smaller Companies Five smaller long-distance companies with per-minute rates carry no monthly charges, according to the survey. These companies -- California-based IDT Corp., Virginia- based ATCALL, Texas-based Matrix Telecom, California-based Pac- West Telecom, which serves only California residents, and ExpressTel serving only Southwest residents -- all offer per- minute rates of $11.5 cents or less. One-rate calling plans, which don't vary fees depending on the time of day, dominate the market, according to the survey. Twenty-eight of the 34 plans surveyed now charge a flat-fee on calls made mornings, afternoons, nights, and weekends. The rates on calling card calls vary widely, the study said. The survey found that a cost of a 10-minute interstate call by 15 different companies could vary from $1 to $6.29. The U.S. Federal Communications Commission requires long- distance companies to pay into a fund that helps subsidize the cost of local telephone service and helps schools and libraries pay to hook up to the Internet. Some companies pass these charges along to consumers. ''On the bill, it says 'mandated by the FCC,''' said Sherry. ''But that's not really the case.'' Debate These charges have been the subject of debate in Washington between some members of Congress and the FCC. Some legislators say the FCC is going too far by subsidizing these programs and are the cause of higher phone bills. In May, federal regulators approved an almost $1 billion increase in funding for a program connecting 80,000 schools and libraries to the Internet. The E-rate program, which will receive $2.25 billion in funding for the year that began July 1, gives schools and libraries discounts of up to 90 percent on telecommunications equipment and services. Jul/09/1999 18:20 (C) Copyright 1999 Bloomberg L.P.