Regulatory News – Bell Atlantic’s OSS Problems Spill Out of N.Y.
Posted: 05/2000
Access Charges Reform Plan Gets Makeover
BY KIM SUNDERLAND
U.S. consumers would see lower telephone bills and immediate cash savings under a revised access charges reform plan, according to the Coalition for Affordable Local and Long-Distance Service (CALLS), a group of six of the nation’s leading ILECs and
IXCs.
CALLS fervently modified and re-modified its plan during the last few months to address consumer groups’ concerns, which generally argue the small print in the CALLS plan actually imposes new charges while it cancels old ones.
“Contrary to the statements CALLS has made, this pricing plan may offer virtually no benefits to the majority of consumers, even though the plan would cut billions of dollars in industry costs,” Gene Kimmelman, director of the Consumers Union, told the press.
But in a last-ditch effort to satisfy consumer groups, CALLS worked to simplify the way customers are charged for phone calls. ILEC and IXC members agreed to eliminate another charge from the bills of their lowest-income customers if the plan is approved.
In the meantime, the FCC
(www.fcc.gov) issued a public notice seeking additional comments on the CALLS proposal, specifically on whether it should adopt all or some portion of the modified plan. The FCC finished compiling its record on the plan in mid-April. If it can release its decision by late-May, the plan could become effective in July.
Among the companies that have signed the CALLS plan are AT&T Corp.
(www.att.com), Sprint Local Telephone Division
(www.sprint.com), Bell Atlantic Corp. (www.bellatlantic.com), BellSouth Corp.
(www.bellsouth.com), GTE Corp. (www.gte.com) and SBC Communications Inc.
(www.sbc.com).
CALLS attorney John T.
Nakahata, a partner with Harris, Wiltshire & Grannis LLP (www.harriswiltshire.com), says the new framework is “a dramatic step forward which offers real hope to break the current policy gridlock and resolve some of the telecommunication industry’s most contentious issues.”
Nakahata adds, “This plan does it all. It lowers phone bills for virtually every customer and ends the regulatory uncertainty that has prevented consumers from realizing the full benefits of competition from the Telecommunications Act of 1996.”
In late March, the five local company CALLS members told the FCC they would drop the local universal service fund charge for LifeLine subscribers.
LifeLine is a government-industry program to lower monthly fees and installation charges for low-income subscribers. Residential consumer groups had complained earlier about some of the filing’s finer details when CALLS unveiled in February its first revised proposal. The March revisions were in response to those concerns, Nakahata says.
The five local companies also pledged to work with state and federal regulators to decide if it’s appropriate to combine the state and federal universal service charges on consumer bills. The CALLS IXC members made a similar commitment.
CALLS also clarified other February revisions for the FCC and consumers. Group members say they would include all residential and single-line business circuits in a cost study on the subscriber line charge that would be conducted during the second quarter of 2001.
The ILECs previously proposed studying costs only for the first line to residential customers and only those lines outside the most densely populated neighborhoods.
Nakahata pointed out the plan upholds the guarantee of affordable universal phone service for rural customers and protects the interests of low-income and low-volume users. The plan also helps make small towns and rural communities more attractive to high-speed Internet access competition, so they can benefit from advanced broadband technologies.
“We pledged to work with consumer groups to help them understand our necessarily complex proposal and to address any concerns that they might have,” said Robert Blau, BellSouth’s vice president of regulatory affairs. “We have done that.”
The CALLS plan, which attempts to rationalize the complex system of subsidies and inter-company payments that determine the price of phone service, is a tough job to say the least. It was unclear at press time whether consumer groups and competitors would embrace the new changes. CLECs, in fact, were devising their own plan.
But the FCC seems prepared to support the modified plan. Commission Chairman William E. Kennard, who is pleased overall with the CALLS changes, said that among “the main tangible, immediate consumer benefits” of these modifications include the promise to remove at least $4.50 from the monthly bill in fixed flat charges for low-volume long distance consumers.
He also liked the more than $2 billion in access charge reductions the companies promise to pass through to residential and business customers.
