THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, May 8, 1996 TAG: 9605080376
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY JEANNINE AVERSA, ASSOCIATED PRESS
DATELINE: WASHINGTON LENGTH: Medium: 67 lines
Local telephone companies are proposing to increase the cost of basic local phone service for most Americans by $10 a month over the next five years, a consumer group told federal regulators Tuesday.
The companies say that while basic rates could go up, a customer's total bill might not because fees for other services such as caller identification or call waiting, could go down.
The chairman of the Federal Communications Commission said the agency is committed to affordable local phone service. But, FCC Chairman Reed Hundt said, rates could go up in some places.
The FCC, along with individual state regulators, would have to approve any rate increase.
The Consumer Federation of America and the American Association of Retired Persons projected the $10 per month increase after analyzing filings of 13 phone companies and groups made to the FCC.
The filings are part of an FCC proceeding, required by Congress, aimed at revamping the current system used to make phone service affordable in rural and other high-cost areas, and for low-income customers.
Of the filings it reviewed, CFA said only two companies - Nynex, a local Bell company, and MCI, a long-distance company that is moving into the local phone business - did not advocate changes that would increase basic rates.
Phone company officials say that basic service rates could rise. But, they said, higher rates could be offset for some consumers by lower prices for add-on services.
``The basic rate may go up, but not the total bill,'' said Bill McCloskey, a spokesman for BellSouth Corp. ``Consumers should get reductions in other parts of their bill.''
BellSouth has proposed an increase in the ``subscriber line charge,'' a monthly charge meant to cover the cost of the local phone wire in a customer's home. McCloskey said BellSouth's current charge, $3.50 per month, doesn't cover the cost. The company wants to increase the charge to as much as $6 a month.
``Essentially, what the companies are asking for is to shift a big portion of the cost (of universal telephone service) onto the local Bell and make it more expensive to get local phone service,'' said Bradley Stillman, telecommunications director for the CFA.
Nationwide, the cost of basic service averages about $18 a month, according to industry officials.
A new telecommunications law directed the FCC to work with state regulators to revamp a decades old plan designed to keep phone service affordable by subsidizing costs for rural and low-income customers.
Changing any one component of the current plan will have an affect on the other pieces.
By Nov. 8, a board of federal and state regulators are to recommend how to revamp the existing program and what new telecommunications services, if any, should be made available to all Americans. They also will recommend how to pay for the new services.
It would be left to state and federal regulators to implement the recommendations.
KEYWORDS: TELEPHONE RATES by CNB