Moving toward a confrontation with Congress, the Federal Communications Commission yesterday unanimously approved a controversial plan that would require virtually every telephone user to pay a monthly "access charge" for long-distance service beginning next year.
The plan requires residential phone users to pay $2 a month on top of their local phone bill and charges business users $6 a month for access to long-distance lines. Those charges will increase over the next five years.
The commission action reaffirmed its December decision to use access charges to eliminate what it called "pricing distortions" in long-distance phone rates. But the commission cut in half the $4 a month fee it first proposed and agreed to gradually raise the rates over the next several years.
The FCC maintains that historically, long distance phone charges have been used to subsidize part of the cost of local telephone service. The access charge decision reflects the commission's decision to move toward what it calls "cost-based" pricing and phase out that kind of revenue sharing.
The access charge ruling is a direct challenge to the concept of "universal telephone service," say several key congressional leaders, including Sen. Bob Packwood (R-Ore.) and Rep. John D. Dingell (D-Mich.). They argue that the increased bills will force low-income phone subscribers to disconnect their phones.
Legislation to continue to use long distance revenues to subsidize local phone rates was introduced last week by Packwood in the Senate and Rep. Timothy E. Wirth (D-Colo.) in the House.
FCC Chairman Mark Fowler, a vociferous supporter of the access charge decision, is scheduled to testify today at congressional hearings on the bills drafted in direct response to the ruling. Another hearing is scheduled for Friday.
The legislation, said to have wide bipartisan support, reflects the intense concern about the cost and implications of restructuring the nation's telecommunications system.
As a result of a Justice Department antitrust settlement, American Telephone & Telegraph Co. plans to spin off its 22 local operating companies into seven independent regional operating groups next January. Those groups and their member phone companies will be responsible for providing local phone service.
These local phone companies will also interconnect their facilities to long-distance carriers such as AT&T Long Lines, MCI and GTE's Sprint. The breakup of the Bell System--and the phase-out of what the FCC says is a $10.7 billion a year long-distance subsidy to local phone service--will enable rival long-distance carriers to become more competitive, say industry sources, and thus should reduce long-distance rates.
The commission yesterday did agree to lower the $4 a month access charges it set last December and said it would phase in the charges over six years, with a $3 fee in 1985 and a $4 fee in 1986. However, the phase-in will create what the FCC calls the "transitional residue" that could drive access charges to more than $7 a month after 1986.
Packwood said "the FCC revision does not really change the decision. They narrowed their ruling a bit in the hope of deterring congressional opposition. Congress will not be deterred."
"While we are pleased that 1984 will see only a limited increase," said an aide to Wirth, "the thrust of the decision has not changed and consumers will still bear the brunt of the access charges at the end of the phase-in. The FCC action does not obviate the need for legislation."
However, said FCC Commissioner Henry M. Rivera, "These matters are best left to us. We can respond more quickly."