A new group that says its mission is to preserve telephone service for all Americans has come under attack by consumer advocates as a telephone company "front" to promote views that benefit big business.
Concerned Citizens for Universal Service, a Columbus, Ohio, group, was officially formed in July and describes itself as "a nationwide nonprofit association of individuals and corporations that strongly supports the continuation of affordable basic telephone service," according to its printed materials.
The group has collected more than $700,000 in donations, 60 percent of which come from 11 phone companies and other large businesses, according to its founder.
"We believe that an access fee -- paid for by all telephone users -- is the only way that service can survive," the group said. It says it supports a Federal Communications Commission decision to impose access fees of $1 a month per phone line for residential customers and $6 a month for multi-line businesses.
The access fees, which pay for the fixed costs of the local telephone network, have been described by the group, regulators and phone companies as a way to shift costs away from long-distance users, to lower long-distance rates and to discourage big businesses from building networks that bypass the local phone company. Opponents of access fees say that they subsidize business customers at the expense of residential customers.
The measure met with a battle on Capitol Hill and outcry from consumer groups last year. Consumer groups charged that the tactic was meant to benefit only large companies and shift more of the cost of the telephone network to customers who have no other alternative.
The new group "appears to me to be a front group set up by telephone companies to perpetuate their interests under the cloak of being a consumer group," said Fred Goldberg, an attorney for the National Association of State Utility Consumer Advocates. "The solutions they are proposing are actually raising rates" to consumers, he said.
"CCUS is a rather crude attempt by the telephone industry to develop consumer-based support for the access line charges," said Samuel A. Simon, director of the Telecommunications Research and Action Center, a Washington consumer advocacy group. "The whole purpose was to lower General Motors' phone bill and increase the consumer's phone bill," he said.
Kent McGough, a consultant in Columbus, Ohio, who founded the organization in association with C. L. Heckman, a former chairman of the Ohio Public Utilities Commission, said the allegation that the group was a phone company organization "is absolute, pure hogwash."
"The telephone companies have nothing to do with our operations. Some are members and a few have made contributions," he said. Other consumer groups "are bothered we were able to come on the scene with substantial membership and do some things that hadn't been done in the industry before," he said.
The money collected by the organization has been used to do a survey, to commission an economic study, to retain a public relations firm and to do direct mailings, he said. McGough declined to name the phone companies that have contributed.
About 120,000 individuals and businesses now belong to the organization, and 6,340 members contribute, he said. The organization does not charge a membership fee.
Bell Atlantic Corp., which owns the Chesapeake & Potomac Telephone Co., has contributed $132,000 to the organization, which has members from the Washington area and a Washington office. American Telephone & Telegraph Co. has paid the group $25,000, GTE Corp. has contributed undisclosed sums, and United Telephone System Inc., a local company in Kansas City, Kan., has contributed to the organization, spokesmen from the companies said.
The companies said they also contribute to other consumer groups such as Telecommunications Research and Action Center and the Consumer Federation of America. GTE said it did not contribute as much to the two organizations, however.
"I don't think anybody ever tried to hide the phone company support for this," said Joseph Gagen, a spokesman for the United States Telephone Association. "The telephone companies have given it a lot of money." Gagen said USTA has not contributed as an association. "AT&T views it more like an industry organization," said Herb Linnen, a spokesman for AT&T. "It is not a consumer group. . . . It speaks for interests various parts of the industry are pressing."