Congress is hung up on how to keep your telephone bills down

The phone bill's arrival is among the most predictable annoyances of civilized life. It appears every month, inevitable as the march of seasons, demanding payment for that occasional indulgence. (''Did I really talk for half an hour?'')

But on Jan. 1, when the American Telephone & Telegraph Company (AT&T) is shattered into its constituent parts, the phone bill as we know it will cease to exist.

For one thing, customers will pay separate charges for equipment and long-distance and local calls. The costs of these services will change also. Long distance will be cheaper, while local service will be more expensive.

Congress has long said it will act to keep local calls from becoming so costly that the ''policy'' of a phone in every home is threatened. But legislators are having a tough time agreeing on what to do about this key issue.

It appears any bill dealing with the price of local service will be more limited than previously thought - meaning some customers, particularly those in rural areas, won't be protected from a stiff jump in phone costs.

The problem stems from the fact that of every dollar spent on long distance, between 35 and 50 cents goes toward keeping the cost of basic service rock-bottom cheap.

But in January AT&T is going to take its lucrative long-distance lines and go play in its own yard. The regional Bell operating companies left behind will somehow have to make up for that loss of extra revenue.

It is inevitable that everyone in the United States with a phone will pay more, soon, for local service, industry experts say.

And since the cost of long-distance calls will go down, the effect on your total phone bill will depend on where and how much you call. AT&T announced Wednesday it would ask the Federal Communications Commission (FCC) to pare long-distance fees $1.75 billion a year. AT&T spokesman Pic Wagner said the rate changes would save average residential customers 10 to 15 percent off their long-distance calls.

But Congress is concerned that the cost of basic, local phone service will simply skyrocket out of the reach of many constituents. In June, the Senate, 97 to 0, called for reasonably priced universal phone service.

The FCC has already come up with its own replacement for the lost long-distance subsidy: Beginning next year, both customers and long-distance companies pay an ''access charge'' to local phone companies.

''Good idea, FCC, but you went too far'' by placing part of the burden on consumers, says one congressional committee staff director.

Sen. Bob Packwood (R) of Oregon, chairman of the Senate Commerce Committee, has introduced a bill that would force long-distance firms to shoulder the whole burden of the ''access charge.'' (AT&T threatens to withdraw its planned cuts in long-distance costs if Congress approves such a move.)

In addition, Senator Packwood's bill would set up a $200 million special fund to provide an extra subsidy for regional phone companies with high costs. This move is intended to keep customers in isolated, rural areas from facing an especially sudden jump in phone bills.

''The cost of poles and wires is much higher in rural regions,'' says the congressional staff director. ''It costs $4 per person, per month, to operate a phone in urban Pennsylvania; it costs $40 in parts of Wyoming.

Packwood thought he had enough support on his committee to pass the bill. He tried to pass it this week - but a number of senators suddenly objected to the $ 200 million subsidy, feeling it rewarded inefficient companies.

Packwood will try again Tuesday. His aides say it's likely the subsidy for high-cost areas will be slashed, to get the crucial access-charge changes through before the '84 election occupies Congress's thoughts.

Next Wednesday, a House committee will begin considering a bill similar to Packwood's, introduced by Rep. Timothy E. Wirth (D) of Colorado.

About these ads
Sponsored Content by LockerDome

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.




Save for later


Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items


Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items


Failed to save

You have already saved this item.

View Saved Items