The Federal Communications Commission yesterday approved an AT&T proposal to reduce long-distance rates by more than $2 billion starting tomorrow.
At the same time, as the result of an FCC plan begun last year, local telephone subscribers will begin paying $2 a month, up from $1, to cover local telephone companies' costs of completing long-distance calls.
Other long-distance companies are expected to cut their rates by hundreds of millions. MCI announced this week it will lower rates an average of 9.3 percent starting July 1.
Under the AT&T plan, long-distance rates will drop by 11.3 percent for residential customers, and 13.1 percent for businesses.
Day and evening long-distance rates will be reduced by 13.8 percent, and night and weekend rates 5 percent. AT&T's WATS customers will see reductions of 14.3 percent.
C&P Telephone Co. spokesman Web Chamberlin said, "For the largest portion of our customers, 90 percent, the increase in local bills will be between 6.4 and 10.4 percent."
Most C&P customers subscribe to either the unlimited-metropolitan-calling plan, for $15.61 a month, or the D.C. service, which provides unlimited calling in the District for $9.57 a month plus a charge of 6.9 cents for each call outside the city.
For low-income elderly who use a special "lifeline" service, the entire subscriber line charge will be waived, Chamberlin said.
Opinions differed yesterday about the impact of the AT&T plan on residential consumers.
The FCC said that every dollar a subscriber pays in subscriber line charges will produce $1.43 in savings to consumers as a whole in the form of lower long-distance rates.
The FCC has transferred $3.8 billion over the past two years to end users. However, long-distance rates have been reduced by $5.3 billion, or about 21 percent, in the same period. On June 1, consumers will pay $1.1 billion more for local service, but long-distance rates will be lowered $2.5 billion, the FCC said.
According to Carolyn Zachary, a spokeswoman for AT&T, "The typical residential consumer will be paying a little less in his overall phone bill. . . . The average residential customer will save about $1.02 on his monthly long-distance interstate bill of about $10."
But Gene Kimmelman, legislative director at the Consumer Federation of America, castigated the FCC for approving a rate reduction that he said will benefit big businesses.
"It's a net loss for consumers unless they increase their long-distance calling," said Kimmelman.
"Our understanding is most consumers do less than $10 worth of long-distance calling a month, and over 80 percent of their time on the telephone is evening, night and weekends. So what AT&T is offering is a bargain on their premium rates but a very small reduction on the service that is most economical for consumers."