American Telephone & Telegraph, in an effort to tie its rates more closely to costs, proposed changes yesterday in its long-distance charges -- changes that will mean increased phone bills for most Bell System customers.
Although the increases for most calls will be less than 2 percent, some consumers -- especially those who do not dial direct -- will see a sharper increase in their phone bills. Increases also are proposed for consumers who make interstate calls to places less than 55 miles away.
Businesses making a large number of calls on the Bell System's discount Wide Area Telecommunications Service (WATS) also will be affected as AT&T plans a 4.1 percent increase in its WATS rates. Business rates for private-line service will be raised by 1.6 percent.
There will be some beneficiaries, however, under the new rate proposals. Credit-card users and many of the customers who take advantage of the direct-dial evening discount rates may see lower charges for their calls. Bell plans to reduce the charge for credit-card calls and change the current evening discount of 35 percent for calls made Sunday through Friday from 5 to 11 p.m. to a 40 percent discount off daytime rates.
Overall, AT&T expects the changes to produce $181.4 million in additional annual revenue -- an increase of less than one percent of all AT&T revenues. It comes after AT&T already has increased its long-distance phone rates twice this year -- to give it an annual increase in revenues of $1.1 billion.
Together all these increases will enable AT&T to meet the higher rate of return the Federal Communications Commission granted last April when it voted to allow AT&T to increase its profit margin from 10.5 percent to 12.75 percent.
Despite the two previous rate hikes, AT&T said yesterday it was not meeting the higher rate of return. At the same time, AT&T noted, its changes proposed yesterday were ordered by the FCC when the commission approved the previous rate hikes. At that time, the FCC directed AT&T to make the rates of all long-distance calls more reflective of their costs.
Yesterday's proposed changes will become effective on March 3, unless the FCC rejects them or suspends the proposed rates.
Specifically, the changes would increase rates for interstate calls made up to a 55-mile range by an average 21 percent during the daytime and by an average 11 percent in the evening. Thus, a three-minute daytime call from Washington to Baltimore would increase from 95 cents to $1.04. As is currently the case, however, Washington area residents would not be charged interstate rates for calls made in the immediate metropolitan area, even if they cross state lines.
Instead of setting specifically higher rates for all person-to-person and other operator-assisted calls, AT&T instead will bill customers the daytime or evening rate it would have cost had they dialed direct plus a surcharge. The surcharge for all person-to-person calls will be $3. The surcharge for collect calls, calls from pay phones and calls charged to a third number that are not person-to-person will range from 60 cents for calls that are made to destinations less than 11 miles away to $1.85 for calls made to destinations farther than 55 miles.
Credit-card users will pay a flat 50-cent surcharge per call, regardless of distance. But, AT&T said, this will end up making the average credit card call 13 percent less.