A House subcommittee has launched a massive investigation of the circumstances leading up to the Federal Communications Commission's April decision to raise American Telephone & Telegraph Co.'s rate of return, a decision potentially worth $1.4 billion to the phone company.
The House subcommittee on oversight and investigations ordered FCC Chairman Mark Fowler to turn over all books, records, tapes and meeting logs that took place in connection with that FCC decision.
In addition, the subcommittee ordered the production of materials dealing with the commission's subsequent approval of an AT&T long-distance rate increase, the largest in the company's history, and a related ongoing proceeding on FCC allegations that AT&T has exceeded its rate of return by $100 million in 1976.
The Aug. 7 letter, signed by Rep. John Dingell (D-Mich.), chairman of the subcommittee, requested production of the documents by Friday. FCC and House staff members have discussed the order, which generally is viewed as having the authority of a congressional subpoena, and the FCC is expected to comply with the subcommittee's requests, sources said.
The FCC's controversial decision, which was made behind closed doors and which already has been criticized by some House members, raised AT&T's rate of return from a maximum of 10 percent to a maximum of 13 percent, although an FCC law judge had recommended that the company be limited to a rate of 10.87 percent.
The decision also enabled AT&T to raise long-distance telephone rates by as much as 16 percent, a rate hike approved by the FCC in May.
The decision followed a rare FCC appearance by AT&T Chairman Charles Brown, who said that the rate-of-return decision is the most important facing the company. "It has serious bearing on the Bell System's ability to continue to render good, efficient service to its customers," Brown told the FCC in April.
Of particular interest could be the video tapes of two closed-door FCC meetings on the AT&T matters on April 6 and May 13 of this year. The subcommittee specifically asked for the tapes of those two meetings.
The House telecommunications subcommittee already has a copy of the April 6 tape, which has been shown to most members of that congressional panel, who are also involved in the investigation of the FCC decisions. That tape was obtained in response to a letter from Rep. Timothy Wirth (D-Colo.), the telecommunications subcommittee's chairman.
Although the FCC opened its proceeding on what to do with the $100 million overcharge in 1979, little action has taken place on that matter since the FCC opened its docket for public comment. Consumer groups and the White House Office of Consumer Affairs in the Carter administration urged that the money be returned to the public.