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

DATE: MONDAY, July 3, 1995                   TAG: 9507030093
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A6   EDITION: METRO 
SOURCE: THE WASHINGTON POST
DATELINE: WASHINGTON                                 LENGTH: Medium

BELL COMPANIES WANT TO GO LONG-DISTANCE

Night and day, AT&T Corp., MCI Communications Corp. and Sprint Corp. pummel each other with often vicious advertising campaigns touting their own discount calling plans as better than the rest. From the look of it, long-distance rates are heading nowhere but down.

But more than 60 percent of the nation's 97 million households don't subscribe to a long-distance discount plan, according to industry estimates - and their rates have been going up.

The nondiscounted ``basic'' rates that they pay have risen nearly 20 percent since 1991, in part to help finance the discount plans that they're ignoring.

This fact is central to a debate over a broad telecommunications bill now before Congress. The country's seven Bell telephone companies, barred from the long-distance business by court order, argue that five times since 1991 the Big Three long-distance carriers have raised ``in lock step'' the basic rates that most Americans pay.

The long-distance industry isn't really competitive, they say, and would benefit from the immediate entry of the Bell companies.

Long-distance companies counter by saying that's the wrong way to look at it: Most of the country's long-distance calls are made by people on discount plans, they say. Those who aren't on the plans hardly call long-distance at all.

The Senate last month passed a bill giving the Bells the right to gradually enter the long-distance business.

The House is scheduled to take up its version of the bill this month.

In the past 10 years discount programs have emerged as the chief tool of competition among AT&T, MCI and Sprint, which account for about 95 percent of the $75 billion-a-year long-distance industry, according to the Yankee Group research firm. But to belong to such a plan, you have to sign up.

The right plan depends on your calling habits, according to the Washington-based consumer group Telecommunications Research & Action Center.

The True Savings plan of market leader AT&T, for instance, offers 25 percent to 30 percent off most domestic long-distance calls, as long as you make at least $10 in calls a month.

MCI's New Friends and Family matches that, then tosses in 50-percent discounts to customers who call within a ``calling circle'' of relatives or pals who also subscribe to MCI.

Sprint tries to make things simpler with a flat rate of 10 cents a minute. Time-of-day restrictions often apply.

Long-distance carriers say the Bells are focusing on basic rates unfairly and point to their discount plans as evidence that their industry is competitive.

Long-distance rates overall have declined about 70 percent since the AT&T breakup, they said, adding that the Bells should not be allowed into their market until the Bells first show they couldn't use their control of local phone networks, through which most long-distance calls pass, to favor their long-distance services.

by CNB