ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Friday, April 25, 1997 TAG: 9704250043
SECTION: BUSINESS PAGE: A-10 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: ASSOCIATED PRESS
If you have more than one residential phone line and make few long-distance calls, you might pay more, not less.
Americans could save at least $1 billion a year in monthly phone charges under a plan being considered by federal regulators. But bills could go up for customers with more than one phone line who make few long-distance calls.
The changes could come about as the Federal Communications Commission revamps a labyrinth of subsidies that make local phone service affordable to poor people and to those living in high-cost rural areas.
The plan is still being refined, and no final decisions have been made. The FCC is expected to adopt a plan May6.
The estimated $1billion is what both residential and business customers would net annually after factoring in changes that also would raise some charges, said FCC attorneys, speaking on condition of anonymity.
And it accounts for $2.5 billion a year that will pay for new discounted telecommunications rates for schools and libraries, they said.
``Under our plan, 85 percent of all consumers in the country are better off on their total bill, and 15 percent are the same,'' asserts FCC Chairman Reed Hundt.
But FCC lawyers familiar with the plan said there is a potential for bills to rise for businesses or for residential phone users who make few or no long-distance calls and who have multiple phone lines in their homes.
For these two groups, the plan would increase the ``subscriber line charge'' that appears directly on monthly bills and is used to pay for the line to the local phone company's switch, the attorneys said. A piece of the charge goes to make phone service affordable in high-cost areas.
Multiline residences pay on average $3.50 a month for that specific charge, and that could rise to $6 a month. Multiline businesses on average pay $6 a month, and that could increase to $6.64, the attorneys said.
That, coupled with converting some ``access'' fees to a flat rate, could cause these customers' bills to go up, the attorneys said.
FCC attorneys acknowledge one potential way for residential customers to avoid the multiline charge might be to put each line in a different name. Local phone companies are concerned about that.
Meanwhile, the $1 billion in savings would come from cutting access fees that local phone companies receive for routing long-distance calls on their networks. The cuts would come in part through changes in the regulatory formulas the FCC uses to calculate fees, attorneys said.
Local phone companies collect $23 billion a year in access fees. The biggest chunk - about $13 billion a year - comes from long-distance companies and goes to local carriers to begin and end calls.
These fees are passed onto long-distance customers and make up about half of the average long-distance bill. Long-distance companies aren't required to pass along savings to customers, but say they have done that after previous reductions. Local phone companies say long-distance companies keep most of the savings.
A portion of access fees - the FCC isn't quite sure how much, and local and long-distance companies have widely different estimates - now goes to subsidize local phone service.
The FCC wants to change the way some access fees are based, replacing per-minute long-distance usage charges with flat monthly rates to better reflect costs and more evenly spread fees across customers.
In theory, this could increase monthly bills for residential customers who make few or no long-distance calls. That's because they would end up paying the same fee as other customers, regardless of how many long-distance calls they make.
But Hundt insists that's not going to happen. He wants the FCC to write a provision that long-distance companies can't pass along the flat rate increase to ``basic'' residential customers - those not enrolled in any discount calling plans.
LENGTH: Medium: 76 linesby CNB