American Telephone & Telegraph Co.'s long-distance rates will drop Jan. 1, but the reduction will be less than the 3.6 percent the company had proposed, the Federal Communications Commission said yesterday.
The FCC said access charges that the regional Bell companies were proposing on long-distance carriers for connection to the local network were too high.
It directed industrywide reductions of more than $750 million beginning next year.
AT&T spokesman Herb Linnen said the company would have to study the order to determine how much of the FCC-ordered reduction would apply to AT&T.
"Clearly it's good news for consumers, but the final amount still must be determined," he said.
"At first glance, it appears AT&T will be able to reduce its interstate long-distance rates by at least $500 million, effective Jan. 1," Linnen said.
"It might be more than that, but we will not know until next week" after the company has analyzed the order.
Gerald Brock, the FCC's top telephone official, estimated that AT&T would get about 75 percent of the reductions.
That is AT&T's approximate share of the long-distance market.
Though AT&T is the only long-distance carrier whose rates are regulated by the FCC, it sets the pace for the industry.
Its two largest rivals, MCI Communications Corp. and US Sprint Communications Co., have said they will keep their rates competitive.
AT&T told the FCC last month that the Bell companies' proposed charges were excessive based on calling volume and expense estimates.
The company proposed access charge reductions of $800 million for its connections.
That would mean an average 3.6 percent cut in AT&T's long-distance rates.
The Bell companies had proposed to reduce access charges by $151 million, or less than 1 percent.
The FCC, however, said the regional operating companies "seriously underestimated" likely long-distance traffic, a factor that would affect access charges.
The companies estimated that long-distance calling volume would be 3.6 percent higher in 1988 than this year.
The FCC says interstate calling is growing by 14 percent annually.
The FCC also said it found some of the local companies' projected telephone costs, including depreciation and operating expenses, to be excessive.
The $750 million reduction includes about $39 million in rate cuts for interstate private lines.
Other rate matters were suspended for two months pending an investigation to determine whether the companies had added costs from their nonregulated businesses and correctly calculated tax savings generated by last year's tax changes, the FCC said.
AT&T had proposed dropping daytime rates about 6.3 percent, evening rates by 2.2 percent and late night and weekend rates, which are the cheapest, by 0.8 percent.