The American Telephone & Telegraph Co. has informed the Federal Communications Commission that its interstate earnings last year were slightly higher than it is permitted under federal regulations.
The communications giant added, however, that the interstate earnings of 10.02 percent (on its investment) for the Bell system in 1978 were "for all practical purposes right at the upper part of the range" of the 9.5-10 percent maximum authorized by the FCC.
"It is to be expected," AT&T said, "that the achieved rate of return will vary somewhat from time to time, depending upon variations in such external factors as disposable personal income and general economic activity."
The AT&T statement in the form of a letter to the FCC from assistant vice president William F. Stump came in response to an FCC letter to AT&T last month, warning the company that its 10.42 percent earnings for the first nine months exceeded the allowable rate of return for the regulated business.
Stump informed the commission that AT&T intended to file a petition within a few weeks requesting an increase in allowable rate of return, which was last revised in 1976.
Current economic conditions, Stump said in his letter, have caused investors in AT&T and all firms to "increase their return requirements significantly." He said a "simple updating of the principles used by the commission to determine the appropriate rate of return range in 1976 produces a required range of 9.8 percent to 10.35 percent today."
But Stump added that the Bell system did not "intend to accompany our petition with a request for higher rates. We shall endeavor to meet our minimum financial needs by redoubled efforts to further improve efficiencies, increase usage and by marketing intiatives."
The embedded cost of debt and the capital structure of the huge company were cited by AT&T as some of the factors that have led the company to request an increase in return for its long-distance operations.