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FCC Orders Change in Fees Long-Distance Firms Pay

March 30, 1985|Associated Press

WASHINGTON — In an effort to help small companies that sell long-distance phone service, the Federal Communications Commission on Thursday ordered a change in the way local telephone companies bill non-AT&T long-distance companies for the use of some local lines.

But the move will increase costs for the larger competitors, MCI Communications and GTE's Sprint.

The new system, changing the charge from flat rate to a per-minute fee, will go into effect Jan. 1, 1986.

The local companies now charge the same for each hookup, based on a presumed average usage per line of 9,000 minutes a month.

Allnet Communications Services Inc., the fourth-largest long-distance company, said it used 6,900 minutes per line. In comparison, Sprint has told the commission that its average line is in use 1,200 minutes per month.

The non-AT&T companies are connected to the local phone lines at a rate that is supposed to be 55% cheaper than American Telephone & Telegraph pays, because they do not get the same high-quality connections.

But, because a company pays the same for a frequently used line as it does for a seldom used circuit, the discount is not always evenly applied.

Under the current pricing plan, a company that uses its lines for 4,000 or fewer minutes a month is actually paying more per minute for an inferior access hookup than AT&T pays for a top quality connection, according to an FCC analysis.

There is no discount when a long-distance company enjoys the same quality connection that AT&T gets. The number of equal quality connections is increasing but was last estimated to be available in about 5% of local exchanges.

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