Oscar S. Cisneros


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Phone costs less not more, FCC says

By Oscar S. Cisneros
The Press-Enterprise

One look at the long list of fees on any phone bill, and customers might assume they are paying more.

Instead, they are paying less, says the Federal Communications Commission, and that's true even considering that some of those fees are going to special funds like the Universal Service Fund, which routes funds to assist several national projects, from subsidizing rural telephones to getting schools onto computer networks.

"Undoubtedly a lot of customers were confused about the line items because they did not understand them," said FCC staff member Jim Schlichting.

Consumer groups and congressional members have complained about "new" fees on rising long-distance bills.

Many consumers do not understand that the line items on their phone bills -- sometimes called a "carrier line charge" or a "national access fee" -- are not new, Schlichting said.

"When people look at the bottom line -- instead of the individual items -- the bottom of the bill is lower than it has been," he said.

Last year, he said, the FCC changed the way "access charges" are collected. Access charges are used to pay for telephone network upkeep and are paid by long-distance companies to the local telephone companies for use of their equipment.

Previously, access charges were collected on a per-minute basis, he said. The FCC changed the access charges to a flat rate -- thus the new line item -- and lowered them by more than $700 million.

These savings, he said, were expected to be passed on to consumers and to help offset costs for Universal Service projects like e-rate and rural telephone cost subsidies.

"The reduction in access charges the long-distance companies have been paying have more than counterbalanced the cost of the initial implementation of the schools and libraries program," Schlichting said.

The FCC is working for clearer labeling of consumer phone bills, he added. Most people do not know, for example, that e-rate makes up only 22.6 percent of the Universal Service Fund.

Rural telephone subsidies account for 19.2 percent of the fund while subsidies for high cost networks account for 58.1 percent of the fund, according to an FCC study.

But as long-distance companies pass these charges on directly to consumers, the FCC is asking Sprint, MCI and ATT to prove that they have passed these savings on to consumers, he said.

"The chairman of the FCC sent out a letter to the three major long-distance companies and asked them to demonstrate that they had passed through to long-distance customers the access charge savings," he said.

The Big Three have replied but local telephone companies have disputed their claims of compliance, he said. The FCC has yet to reach a decision on the matter, saying it is studying the issue.

Angela Ledford, a spokeswoman for Keep America Connected, said that consumers should watch for rising rates in other areas of their bill, even as long-distance companies say they are dropping per minute rates.



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