The Communications Workers of America, the Bell System's chief union, said yesterday that the new national telephone contract will raise local telephone rates by no more than 2 percent, about 50 cents monthly for a customer whose phone bill averages $25.
Pic Wagner, a spokesman for American Telephone & Telegraph Co., said the firm cannot predict the impact of last weekend's labor settlement on local rates. Wagner noted, though, that the contract "represents an increase in the cost of doing business, but not a large increase."
All sides agree that, even without a new contract, Americans' telephone bills will increase sharply after next January, when the nationwide Bell System is split into a number of independent companies.
Most state utility commissions are expecting local rates to double, because of new accounting methods and new expenses that local telephone companies will incur after the breakup of the Bell System, CWA analyst Leslie Loble said.
Under a federal antitrust settlement approved this year, the national telephone system will be divided into seven regional holding companies, each independent of AT&T and one another.
Long-distance business, which has traditionally been used to subsidize local telephone rates, will stay with AT&T. Thus, local companies will have to increase their charges to make up for the lost subsidy.
In the new contract, labor and management were anxious to reach an agreement that will provide labor stability during divestiture.
The three-year agreement will be incorporated into 34 separate labor contracts, one for each of the corporate entities that constitute the Bell System. These companies include 22 local telephone companies, such as C&P Telephone Co. and Michigan Bell, and support units like Bell Labs, the research arm, and Western Electric, the AT&T equipment manufacturer.
The firms created by the divestiture will inherit the contract.
One reason the new contract will have a limited impact on telephone bills, union analysts said, is that labor negotiators stressed job security more than immediate wage increases. Their goal was to protect workers who might otherwise lose their jobs because of divestiture or technological advances.
The telephone unions, the CWA, the International Brotherhood of Electrical Workers and the Telecommunications International Union, have been forced over the past three decades to deal with a situation of growing concern to all unions: the development of machinery that can do jobs once done by people. This concern is reflected in provisions in the new contract requiring company-funded programs to retrain employes if their jobs are handed over to machines.
The contract's impact on telephone bills will probably be smaller than any recent contract, Loble said, because the negotiated pay raise is not as great as in some other years and because labor has represented a declining proportion of total telephone company costs for decades.
She noted that 30 years ago labor accounted for 45 percent of the costs that telephone companies reported to state utility commissions.
However, today the labor share is 29 percent, she said.