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The Honorable Conrad Burns
United States Senate
Washington, DC 20510
Dear Senator Burns:
On behalf of Consumers Union, the Consumer Federation of America, and the Texas Office of Public Utility Counsel, we are writing to seek your help in putting an end to the Federal Communications Commission's misguided pricing program that is driving up consumers' monthly telephone bills. With more than $1 billion a year in new charges slated to begin on July 1, 1999, added to almost $4 billion a year that has already been added to consumers' bills, we believe it is time for Congress to reverse these regressive, unfair rate increases that result from the FCC's policies.
Since passage of the 1996 Telecommunications Act, the FCC has embarked on policies that have added $3 a month to the monthly phone bill of the typical single-line residential long distance customer, and more than $7 a month to the monthly bill of consumers with two telephone lines. As of July 1, this will amount to a total increase of almost $5 billion per year on consumers' monthly phone bills, not including new minimum charges of $3-5 every month assessed by long distance companies like AT&T and MCI.
At the time the Commission initiated this pricing program, then Chairman Hundt stated that: "I don't think that Congress intended to have us raise residential basic dial tone…and I think I am reading Congress right on this." We agree with that assessment, and therefore cannot understand how the FCC can justify the fact that its regulatory actions are having the opposite effect - the very effect the agency knows Congress did not intend. This is nothing short of regulatory mismanagement at the expense of consumers and must be reversed.
Contrary to Congressional direction to devise a comprehensive pricing system that preserves universally affordable, reasonably priced telephone service, the Commission has embarked on piecemeal policies that are inappropriately robbing consumers of about $5 billion a year. Offsetting long distance rate reductions have not only failed to materialize for residential customers as a whole, but for the millions of consumers who make few long distance calls, these increases in monthly charges constitute the lion's share of their bill. And the FCC is likely to increase these charges to expand its universal service program. The Commission's pricing program calls for additional increases in monthly line charges for the next few years as well.
If Congress truly did not want to see monthly phone charges go through the roof, particularly for the majority of consumers who are relatively low-volume long distance users, something must be done to reverse the FCC's wrong-minded pricing program. We therefore ask you to take the lead in moving legislation that would put an end to this pricing program, and would require the FCC to go back to the drawing board and develop a comprehensive proposal to preserve universal service and move prices to cost without adding unfair charges on consumers' monthly bills.
Sincerely,
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Gene Kimmelman |
Mark Cooper |
Laurie Pappas |
