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U.S. Endorses Long-Distance Allocation Plan

April 09, 1985|PENNY PAGANO | Times Staff Writer

WASHINGTON — The Justice Department on Monday endorsed a plan that would require local telephone companies to assign consumers who fail to choose a long-distance service on their own to one of several carriers instead of giving them automatically to AT&T.

In a filing with the Federal Communications Commission, the department said the regulatory agency should implement this procedure as soon as possible to encourage consumers to make their own choices in the changing long-distance telephone market.

"It's just common sense to require the system that makes it easier for consumers to make an intelligent choice," said Charles F. Rule, acting assistant attorney general for antitrust. "Giving consumers maximum choice is what competition is all about."

At present, the local Bell telephone companies, with the exception of Northwestern Bell, automatically route customers to AT&T if they fail to select an alternative long-distance carrier.

The FCC is reviewing complaints challenging this allocation system on the ground that it gives AT&T a disproportionately high share of the lucrative long-distance market. The agency is expected to act after it finishes its review.

Omaha-based Northwestern Bell, which serves Iowa, Minnesota, Nebraska, North Dakota and South Dakota, sends ballots to customers asking them to select a long-distance company. Those who fail to return the ballots are informed that they will be assigned to a long-distance company but are free to make a different choice at that time.

Consumers who refuse this second opportunity are allocated among participating carriers in proportion to the choices made by others in the first balloting.

Between 65% and 70% of Northwestern's customers have chosen among the competing services. By contrast, the Justice Department said that fewer than half of the customers in other areas have chosen a long-distance carrier.

The divestiture of American Telephone & Telegraph on Jan. 1, 1984, required local Bell companies to provide equal access to AT&T and its long-distance rivals. Under equal access, customers can reach the long-distance carrier of their choice by dialing 1 followed by the area code and number.

In its comments to the FCC, the Justice Department said that assigning undecided customers to AT&T by default is less consistent with federal communications policy than Northwestern Bell's ballot-and-allocation system.

The department said that, in adopting the ballot-allocation plan, the FCC should require consumers to have at least one opportunity to change their mind free of charge after they are assigned a long-distance company.

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