The Senate Commerce Committee yesterday hammered out compromise legislation that would block a planned $2-a-month charge on phone bills for access to long-distance service. The legislation also would create a $400 million "universal service" fund to cushion the impact of huge rate increases expected next year from the breakup of the Bell System.
American Telephone and Telegraph Co., which last week announced a $1.75 billion cut in long-distance rates to take effect in January, said yesterday that it would be forced to "reassess" its plans if the proposals become law.
"This represents no victory for consumers--especially the residential customers who make more than 50 percent of all long-distance calls," said AT&T spokesman Pic Wagner.
Yesterday's agreement came on a 10-to-2 straw vote; a formal vote will be taken later in the week when staffers have finished translating the compromise into legislative language. But it nonetheless represented a crucial victory for the committee chairman, Sen. Robert Packwood (R-Ore.), who has been attempting to push through such legislation before the end of the year over the strenuous opposition of the telecommunications industry and his own communications subcommittee chairman, Sen. Barry Goldwater (R-Ariz.).
The compromise proposal, sponsored by Sen. Frank Lautenberg (D-N.J.), is aimed at dealing with a number of forces that are expected to drive up telephone bills next year.
On one front, the Federal Communications Commission this summer approved an escalating series of access fees for long-distance service, to begin taking effect on Jan. 1. The charges--intended to reverse a long-standing "hidden" subsidy of local service by long-distance callers--would begin at $2 a month for residential users and could grow to $10 or $12 a month by 1990. Businesses would pay $6 a month.
Other expected rate increases are associated with the spinoff from AT&T of its 22 local service operating companies.