AN ARTICLE IN WEDNESDAY'S BUSINESS SECTION INACCURATELY EXPLAINED A NEW 51-CENT MONTHLY CHARGE THAT IS APPEARING ON SOME BELL ATLANTIC PHONE BILLS. BELL ATLANTIC CORP. DIRECTLY COLLECTS THIS LINE CHARGE ONLY FROM THE 3 PERCENT TO 4 PERCENT OF ITS CUSTOMERS WHO HAVE NOT SUBSCRIBED TO ANY LONG-DISTANCE SERVICE. FOR THE REST OF ITS CUSTOMERS, BELL ATLANTIC COLLECTS THE CHARGE FROM THEIR LONG-DISTANCE COMPANIES, SOME OF WHICH ARE RAISING FLAT FEES IN THEIR CUSTOMER RATES TO REFLECT IT. THE 51-CENT CHARGE DOES NOT HELP OFFSET AN ANNUAL REDUCTION OF ABOUT $230 MILLION IN FEES THAT LONG-DISTANCE COMPANIES PAY BELL ATLANTIC FOR ITS HELP IN BEGINNING AND ENDING LONG-DISTANCE CALLS. THE COMPANY DID NOT BLAME THE FEDERAL COMMUNICATIONS COMMISSION OR LONG-DISTANCE COMPANIES FOR THE 51-CENT CHARGE AND IN A NOTIFICATION TO DIRECTLY BILLED CUSTOMERS ADVISED TO CALL BELL ATLANTIC IF THEY HAD QUESTIONS. (PUBLISHED 07/02/99)
Beginning July 1, area residents will see another increase in monthly charges on their telephone bills -- 51 cents -- and Bell Atlantic Corp. is referring all complaints about it to the federal government and long-distance carriers.
The charge grows from action by the Federal Communications Commission to reduce "access charges," per-minute fees that long-distance carriers pay local phone companies for the use of their telephone networks. The move means Bell Atlantic will lose $230 million in revenue over the coming year, and by collecting an additional 51 cents per customer per month it's trying to make up some of that.
The FCC's order lowers costs for long-distance companies. Yesterday, spokesmen for AT&T Corp., MCI WorldCom Inc. and Sprint Corp. said they expected rates in general to fall, but declined to give details about specific cuts that might be planned as a result of the access charge cuts.
"The FCC is moving in the right direction," said Sprint spokesman James Fisher. "In the end this process will help continue to make long-distance service one of the best bargains available to the American consumer."
The FCC does not require long-distance companies to pass along the savings directly. "We expect the market to pressure the companies to do that," said Larry Strickling, chief of the FCC`s Common Carrier Bureau, which oversees policies on access charges.
The new charge will appear on bills as an increase from 53 cents to $1.04 in a line item called "federal access charge." This charge was initiated by the FCC in January 1998 to help local phone companies adjust to a previous round of cuts in access charges. The FCC did not require them to collect the fee, but most have done so.
Under the old monopoly Bell Telephone System, long-distance rates were kept high to subsidize local phone rates. Those continued after the breakup of the system in 1984, the FCC says, in the form of high access charges, but the commission has progressively lowered them in what it calls an effort to rationalize pricing and make the industry more efficient.
While long-distance rates have fallen dramatically, companies providing local service have often increased their rates to make up for the lost subsidies.
Recently, local telephone subscribers have also been hit with new fees to finance getting schools and libraries onto the Internet and to underwrite technical costs of letting people keep their old phone numbers when they change local telephone companies.
Bell Atlantic has been sending out letters advising customers of the new 51-cent charge and asking that they contact the FCC or their long-distance carrier if they have questions or complaints.
Some telecommunications analysts say the letters may be intended to protect the company from angry consumers. "It's a painful part of the transition for the Bells," said telecommunications analyst Jeff Kagan. "They have to keep a good image in the marketplace. Customers don't like line-item pricing increases."
But Eric Melloul of Argus Research said the letters are purely a part of a "PR war between the Bells and the long-distance companies."
Gene Kimmelman of Consumers Union criticized the commission for failing to make long-distance companies give direct price cuts for the access charge savings. Consumers are paying higher local bills, he said, but many are not enjoying offsetting cuts in what they pay for long-distance service.
The FCC estimates that long-distance companies will save about $825 million through cuts in access charges and other fees that they pay. That sum would potentially be available to consumers in the form of lower long-distance rates.
Bell companies contend that they will not make up all of the lost access charges through the higher fees they will charge. But they say they are willing to absorb the rest as they prepare to enter the long-distance business themselves.
Currently, Bell Atlantic is trying to enter the long-distance carrier business in New York. A state commission is investigating whether the company has complied with 1996 Telecommunications Act rules to make local phone competition more viable.