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Thursday, Aug. 20, 1998
Court approves FCC phone-fee overhaul
Companies had challenged action of agency aimed at cutting rates for long-distance calls
By JEANNINE AVERSA
Associated PressWASHINGTON -- A federal appeals court upheld a government plan that overhauls telephone fees in an attempt to lower long-distance rates.
Wednesday's decision by the U.S. Court of Appeals for the 8th Circuit is a rare victory for the Federal Communications Commission, which in the last year has lost several high-profile telecommunications cases.
``We are very pleased,'' said FCC Chairman Bill Kennard.
Local and long-distance companies had waged for different reasons a broad legal assault on the plan, which the FCC adopted in May 1997. They didn't say whether they will appeal.
The court, based in St. Louis, affirmed the FCC on all counts. That means the status quo prevails, and customers will experience no change in phone bills because of the court's ruling.
At the heart of the FCC's plan to overhaul telephone fees was its decision to cut ``access'' fees by $1.7 billion. These are fees that long-distance companies pay local phone companies to connect calls.
The fees, passed along to long-distance customers, comprise a large part of the average customer's $22.50 a month long-distance bill.
The FCC is looking into whether AT&T, MCI, Sprint and other long-distance companies passed along the reduction to customers as they say they have. The FCC had estimated at the time of its order that the average savings to a customer in 1997 would have been about $2 a month.
In an important side issue in the case, the court backed the FCC's decision not to require America Online, Erol's and other Internet service providers to pay access fees to local phone companies for use of their networks.
If the court had ruled in favor of BellSouth and other local phone companies on this issue, it might have raised Internet prices for consumers.
``We agree that the FCC's decision to exempt ISPs (Internet Service Providers) from interstate access charges while continuing to investigate potential future changes in this area is a reasonable exercise of the agency's discretion'' under a 1996 telecommunications law, the three-judge panel wrote.
Local phone companies, including BellSouth, Bell Atlantic, US West and GTE, challenged how the FCC cut and overhauled phone fees. They also argued that the commission wrongly cut access charges without first revamping subsidies they get to make phone service affordable for the poor and people living in rural and other high-cost areas.
The court disagreed. It said those FCC actions were reasonable and consistent with the 1996 law, which deregulated the telecommunications industries.
In rejecting local phone companies' claims, the court also upheld an FCC decision that modestly increased the federally ordered ``subscriber line charge'' for businesses and residences with multiple telephone lines.
This charge, which appears on phone bills, is used to pay for the cost of the line from the customer's home or business to the local phone company's switch.
The court also upheld an FCC decision that increased another charge for both multiple-line homes and businesses. That charge came from a commission replacing with flat monthly rates some access fees based on minutes of long-distance use. The FCC said it did this to reflect costs better and spread fees more evenly among customers.
MCI Communications Corp. and other long-distance companies, on the other hand, took the FCC's plan to court, arguing that the commission should have made deeper cuts in access fees.
The court disagreed on grounds the commission adequately explained its cut and had not acted arbitrarily or capriciously.Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web