If FCC gives its approval, London calls falling down

September 19, 1994|By Bloomberg Business News

WASHINGTON -- The Federal Communications Commission is expected to vote today on proposals from two companies that could lead to lower phone rates between the United States and the United Kingdom.

Two long-distance companies -- ACC Global Corp. and Alanna Inc. -- have asked the FCC for permission to offer phone services between the United States and the United Kingdom, using lines leased from other telephone companies. An FCC OK would allow the firms to cut their trans-Atlantic rates, offering greater competition to long-distance giants such as AT&T Corp. and British Telecommunications.

"If this is approved, it's going to begin to break down the barriers that create very high costs for international long-distance calls," said telecommunications analyst Bradford L. Peery of Brad Peery Capital. ACC Global is a wholly owned subsidiary of Rochester, N.Y.-based ACC Corp. Boston-based Alanna is owned by FMR Corp., the parent company of Fidelity Investments. Both companies are long-distance resellers that lease phone lines from other companies to offer their own long-distance services to businesses and consumers.

The FCC hasn't yet approved requests by resellers to lease private lines to offer phone service between the U.S. and another country, except for Canada. Agency officials have said they wouldn't approve such applications until they were sure the foreign phone markets were open to competition from American companies.

"The big question is whether the U.K. affords U.S. carriers equivalent resale opportunities," an FCC spokeswoman said. "We want it to be reciprocal."

Currently, resellers who want to offer trans-Atlantic service must pay the companies that own the phone lines on a per-call basis. Leasing the lines outright would enable the firms to cut costs dramatically.

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