American Telephone & Telegraph Co. yesterday asked the government to approve a new rate structure for 100,000 WATS customers that would dramatically hike the rates for large business customers while slicing those same rates for smaller customers.
The phone company said the rate hike -- which was contained in a 35-volume, 17,000-page filing before the Federal Communications Commission -- will not alter company earnings, even though it prompted bitter critisim from a coalition of big companies fighting the increase.
The filing involves Wide Area Tele-communications Service (WATS) and 800 hook-ups, two widely used AT&T options that enable business customers to place or receive calls from designated areas of the country.
In addition to lowering rates for the overwhelming majority of customers, removing the current minimum usage requirements will open up the service to many small and medium-sized business," said John Wyman AT&T Long Lines marketing vice president.
"AT THE SAME TIME, THE HEAVIEST WATS users -- whose usage generates substantial cost -- will pay more," Wyman said.
A spokesman for the Council on Wage and price-watchers apparently had not discuussed the rate increase with AT&T officials but that the council "will look into" the proposal.
Wats and 800 service-rate proposals have, for many years, been a subject of regulatory and court proceedings. In fact, a U.S. District Court opinion required the Bell System to file a new cost-based rate structure this month, after rejecting as illegal FCC approval of another proposed tariff in 1977.
For about 90 percent of the 100,000 customers who use the services, rates would be lowered, AT&T said, with 5 percent of the users gaining as much as a 50 percent cut in rates. But for the larger companies, banks, publishing houses, hotels and car rental companies, for instance -- rates would rise dramatically.
For about 5 percent of those customers, the Wats rates would rise by up to 50 percent, while another 5 percent would get rate hikes of more than 50 percent.
It is those corporate, prolific users of WATS lines that have opened a major campaign challenging the AT&T proposal. The Committee of Corporate Telephone Users, a national coalition of large firms that are virtually dependent on the cut-rate AT&T service, have charged that the rate hike, if granted by the Fcc, would raise dramatically the price of many consumer services that are dependent on telephone ordering.
Murray Roman, a spokesman for the group and an official of Campaign Communications Institute, called the rate-increase proposal "unconscionable. There is no aspect of American business and consumer life that will be unaffected." Roman also said the rate hike would add 50 cents to $1 to the cost of virtually all car rentals and another $1 to the average hotel room.