
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, March 31, 1995                   TAG: 9503310063
SECTION: BUSINESS                    PAGE: A-9   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

SAVINGS ON PHONE BILL EXPECTED TO BE SMALL

Americans' long-distance telephone bills could go down as much as $1 billion this year because of a federal agency's decision to reduce the payments big carriers must make to local companies. But the new plan will translate into mere pocket change for the average customer.

The Federal Communications Commission, as expected, voted 4-1 Thursday to order a cut in the charges long-distance carriers pay to local phone companies to begin and end long-distance calls.

Long-distance customers will see about 2 percent trimmed off their bills by the action, said Mark Uretsky, a chief economist at the FCC's Common Carrier Bureau.

The average long-distance bill for an AT&T customer is $17 a month, according to spokesman Herb Linnen. Two percent off that would save a customer 34 cents.

AT&T Corp. is the nation's largest provider of long-distance service.

``It's just a little bit of pocket change for the average long-distance telephone customer,'' said Bradley Stillman, legislative director of the Consumer Federation of America. ``We're glad to have it, but it's nowhere near what customers deserve.''

The federation and long-distance companies said the FCC didn't cut the payments to local companies deeply enough.

In general, local phone companies said the agency went too far, depriving them of a fair price for their service and penalizing them for being efficient.

Bell Atlantic Corp. plans to appeal the order, which Jim Young, vice president and general counsel, described as ``punitive.''

The Philadelphia-based company that serves Western Virginia through its Bell Atlantic-Virginia unit, said in a prepared statement, "There is absolutely no guarantee that long-distance carriers will pass any of their windfall from the decision to customers. The FCC action is like stepping off the high board without checking for water in the pool."

The payments, called ``access charges,'' amount to $20 billion to $22 billion a year, the FCC estimates - roughly the annual revenues of the entire cable industry and twice the revenues of the cellular phone business.

The access charges account for more than one-third of local phone companies' revenues.

Most long-distance companies are not required by the FCC to pass reductions in access charges on to consumers, but the agency says companies do.

Local phone companies say consumers may not benefit from the FCC's decision, however. They contend that many long-distance companies have pocketed the lion's share of previous reductions - hundreds of millions of dollars - rather than passing the savings along to consumers.

by CNB