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To: JM who wrote (3240)	8/13/1998 6:41:00 PM
From: Anthony Wong	Read Replies (2) \| Respond to of 11568

Consumer Groups Seek Long-distance Rate Reductions (Update1) Bloomberg News August 13, 1998, 4:58 p.m. ET Consumer Groups Seek Long-distance Rate Reductions (Update1) (Adds Comment from MCI in paragraph 9.) Washington, Aug. 13 (Bloomberg) -- Consumer groups are asking federal regulators to force long-distance phone companies, including AT&T Corp. and MCI Communications Corp., to reduce residential telephone bills. Consumers Union and the Consumer Federation of America said they would file a petition at the Federal Communications Commission seeking a flat-fee reduction on all customers' bills, regardless of how much is spent a month on long-distance, to reflect the decreases in long-distance company costs. Since January, 1998, long-distance companies have been permitted to pay less in so-called access charges, the fees they must pay local phone companies to begin and end calls, the groups say. Those savings aren't being reflected in rate reductions, the groups claim. ''None of the major (calling) plans have substantially changed since the long distance companies received a net $2 billion reduction from the local phone companies for 1998,'' said Gene Kimmelman, co-director of Consumers Union's Washington Office. The consumer groups want the long-distance companies to reimburse customers for alleged over-charges this year. That would amount to about a $1 billion credit to customers. Long Distance Rates ''We agree with Consumers Union that the American consumer should be seeing lower long distance rates because of the access charge reductions ordered by the FCC,'' FCC Chairman William Kennard said in a statement. ''We know that long distance rates have been dropping generally, but the key is to make sure that residential consumers are getting their fair share of the reductions,'' he said. AT&T Corp., the largest U.S. long-distance company, released a report today from its auditors, PricewaterhouseCoopers, showing that prices paid for long-distance service declined by about $460 million more than the savings the company received through access charge reductions. ''This audit confirms what we've been saying for a long time: AT&T passes along much more in the form of lower long distance prices than we receive in access cost reductions,'' said Rick Bailey, AT&T vice president, federal government affairs. MCI spokesman Peter Lucht said long-distance rates are lower than they've ever been. ''Not only have we passed on access savings, but we've more than passed it on to the tune of hundreds of millions of dollars,'' he said. --Heather Fleming in Washington, (202) 624-1835/ah news.com