AT&T to cut long-distance rates within Md. Carrier's lower fees to Bell Atlantic noted

December 17, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

AT&T Corp. will cut rates on long-distance calls within Maryland by 10 percent or more, passing along the state-ordered cut in the charges AT&T pays Bell Atlantic Corp. to connect calls from customers' homes or offices to the long-distance company's network.

AT&T's filing with the Public Service Commission, expected tomorrow, could mean a cut of $15 million to $20 million in the rates AT&T charges for long-distance services within Maryland. That business was $143 million in the 12 months that ended in June.

Interstate long-distance rates will not be affected.

Steve Molnar, director of the telecommunications staff for the PSC, said AT&T had indicated in private discussions that the cut would be between $15 million and $20 million, but had not shown the staff any formal documents yet.

"It will be in that range, anyway," Molnar said.

Joan E. Marshall, AT&T's executive in charge of Maryland, could not be reached yesterday. But another AT&T executive confirmed the approximate size of the rate cut.

The PSC set the stage for AT&T's move last month, in a landmark ruling overhauling the way telephone service is regulated in Maryland. Toppling decades of precedent, the commission allowed Bell Atlantic, the dominant local phone carrier in the state, to keep all the profit gains it can achieve by making its network more efficient.

In exchange, the commission ordered Bell Atlantic to cut its charges to AT&T and other long-distance companies that use its network by $32 million. At the time, Bell Atlantic estimated that would reduce the average phone bill by almost $2 monthly. The commission staff had recommended a $117 million rate cut.

Long-distance carriers have to pay the so-called "access charges" to local phone carriers like Bell Atlantic because long-distance companies do not have separate lines running to each customer's telephone.

But long-distance carriers have accused local phone monopolies charging up to six times the cost of connecting calls to long-distance networks. The long-distance carriers say that keeps long-distance prices artificially high.

AT&T's filing is the first of a series by long-distance carriers that will assure the access rate cut actually gets passed along to consumers, Molnar said.

"Nobody has [filed] anything yet," Molnar said, referring to long-distance competitors such as MCI and Sprint. "They're probably waiting for AT&T to go first."

Bell Atlantic said it would scrutinize AT&T's filing to make sure it was consumer-friendly. The company has increasingly accused AT&T and other long-distance carriers of cutting rates for highly promoted special rate plans while quietly raising rates on plans the most consumers use.

"The devil is always in the details," Bell Atlantic spokeswoman Sandra Arnette said. "Bell Atlantic is questioning AT&T's sincerity in passing this along to all Maryland customers and not just a select few." The flap over intrastate long-distance pricing is only a small part of the battle between the two phone giants. AT&T plans to enter the local phone service business in Maryland next year, which was not legal until Congress passed this year's landmark telecommunications reform law. Both traditional phone monopolies and long-distance carriers plan to pursue the others' customers in states all over the nation.

Pub Date: 12/17/96

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