A government plan overhauling telephone fees will mean about $2 a month in savings for many Americans, but bills probably will go up for some customers.
Changes in long-distance rates are part of a trio of decisions adopted by the Federal Communications Commission Wednesday, which it characterized as capping major acts implementing the 1996 Telecommunications Act.The FCC agreed to cut long-distance fees by $1.7 billion in 1997 starting July 1 and by $18.5 billion over five years. Two major carriers, AT&T and MCI, pledged to pass the savings on to consumers.
MCI President Timothy F. Price said the FCC's action is the "first step toward eliminating the billions of dollars of unjustified overcharges by the local monopoly phone companies."
But businesses and residential phone users who make few long-distance calls and have multiple phone lines, perhaps for a computer or for kids, will see bills goup, according to Gene Kimmelman, co-director of the Consumer Union's Washington office.
Residential customers with multiple lines will pay an additional $1.50 a month for each extra line beginning Jan. 1, 1998. Businesses with multiple lines will pay about $3 extra per line beginning in July, plus $2.75 in flat fees that long-distance carriers will be charged by local companies for every business line.
"There is no guarantee that every consumer will believe that he or she is better off as a result of today's decisions," said FCC Chairman Reed E. Hundt. "I firmly believe, however, that as a result of today's decisions the overwhelming majority will buy more communications services with their money or will pay less for the same services they buy today."
The commission also opted not to implement a tax on Internet Service Providers and established a mechanism to hook eligible schools, libraries and rural health care providers to the global telecommunications network.
Hundt was especially pleased about roughly $4 billion set aside in a Universal Service Fund to provide phone service and subsidies in rural areas and Internet access for schools.
"Today, at last, after 31/2 years of work, we can say that we have by law and rule a fully funded national commitment and national plan to connect every classroom to the information highway," Hundt said.
US WEST announced Monday a "Connected Schools" program that will provide Utah school districts with expert advice, technical plans and customer support for Internet and communications services.
"Educators across the country will be moving fast to get these funds," said Ted Smith, US WEST Communications Utah vice president. "We want to make certain that schools here get a running start with the information and resources they'll need to bring this funding home to help students."
But US WEST spokesman Duane Cooke said the company was not pleased with the method the FCC used to address rural service.
"While the FCC says it is helping to fund service in high-cost rural areas, it's only addressed the needs of customers of small rural telephone companies, which only serve one-third of all rural customers," he said.
The FCC delayed until Jan. 1, 1999, creation of a fund to address service subsidies in rural high cost areas.
"The FCC appears to have put off by more than 18 months the needs of the remaining two-thirds of rural America," Cooke said.