AT&T, Bell, Nynex join in fee plan They propose smaller reduction in charge for long-distance access

April 05, 1997|By BLOOMBERG NEWS

WASHINGTON -- AT&T Corp. formed an unexpected alliance with Bell Atlantic Corp. and Nynex Corp. yesterday to propose a smaller reduction in the fees that regional Bells charge 'u long-distance companies to complete calls than other long-distance companies are demanding.

The three companies called for an immediate reduction of $2.5 billion in the more than $20 billion in fees companies such as AT&T and MCI Communications Corp. pay Bells and other local telephone companies each year to connect their long-distance calls.

"It isn't every dollar we wanted," said Gerry Salemme, AT&T's vice president for regulatory affairs. "It doesn't take the charges to their economic cost, but we think it's a good start."

The reduction, to be considered by federal regulators, would be expected to result in savings of at least $400 million on consumer and business phone bills by July 1, 1998, said Tom Tauke, a former congressman who now is executive vice president for government affairs at Nynex.

But consumers won't see $2.5 billion in savings, because the plan creates a $5.42 billion fund to subsidize phone service to poor and rural customers, and pay for connections of schools and libraries to the Internet. The fund was mandated by the new telecommunications law. Businesses will pay for the bulk of that new fund, while consumers also will pay new fees.

Starting July 1, businesses would see the cap on the per-line monthly charge for a single business line rise from $3.50 to $6. The cap on multiple lines would rise from $6 to $8.

About $1.4 billion of the $5.4 fund would help pay for the public service Internet connections. That portion would be raised with an additional monthly fee of 25 cents on every phone line starting July 1. That fee would rise to 75 cents by July 1, 1998.

Long-distance companies would get a new charge of $2 per business line and $1 per residential line starting Jan. 1. That fee would help bring down the per-minute access charges they pay, the companies said.

The plan to cut access fees by $2.5 billion puts AT&T and its Bell partners at odds with MCI's proposal that the Federal Communications Commission order an immediate $14 billion cut these so-called "access charges."

Pub Date: 4/05/97

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.