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Press Release Monday, March 20, 2000 |
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WASHINGTON, D.C. - Gene Kimmelman, co-director of the Washington
D.C. office of Consumers Union, raised new concerns today about the
so-called "reform" plan to restructure the system of telephone access
fees submitted by the Coalition for Affordable Local and Long
Distance Calls (CALLS) to the Federal Communications Commission
(FCC).
CALLS is a telephone industry coalition made up of AT&T,
Sprint, Bell Atlantic, BellSouth, GTE, and SBC. After submitting its
original plan to change the access fee system in 1999, CALLS
announced to the media on February 25 that it would add provisions to
offer more benefits for consumers. But Kimmelman says the plan falls
short.
"The majority of consumers could see virtually no benefits under
the CALLS plan, contrary to statements the coalition made to the
press," said Kimmelman.
"Upon reading the actual CALLS plan, we have discovered that it
does not live up to its promises. The plan contains several hidden
stipulations that CALLS did not mention in its press materials last
month. For instance, AT&T's stated promise to eliminate its $3
minimum fee for basic residential service may never materialize.
AT&T informed the FCC that its promise to scrap the fee will not
apply if one or more competitors with a combined share of at least 10
percent of the long distance market is permitted to charge minimums.
"MCI, which commands much more than 10 percent of the market, has
yet to make a formal commitment to offer a plan without minimums.
Neither have the many smaller long-distance companies that would
easily command more than 10 percent of the market. And if they don't
choose to charge minimums now, they would still be able to do so
since long-distance pricing plans are not regulated.
"Even if AT&T does get rid of the $3 fee, the filing reveals
that AT&T has reserved the right to restructure its prices,
meaning it could raise its per-minute charges, leaving consumers with
practically no benefits at all. In the end AT&T's promise
appears to be meaningless.
"The claim that the CALLS plan would simplify phone bills is
inaccurate as well. Reading the proposal, it appears that all they
are doing is replacing one line item [the pre-subscribed
inter-exchange carrier charge, or PICC] with a new line item, a
local universal-service charge. Once the industry finishes
reshuffling the charges, consumers will be left saving virtually
nothing in line-item charges, and they will face substantial
increases in the future.
"Now that we can see the CALLS proposal in black-and-white,
Consumers Union believes it contains so many shortfalls that the FCC
should make substantial changes in the proposal. If a timely
compromise is not possible, the FCC should place a moratorium on
raising any consumer phone charges until the matter is resolved."
