article

CALLS-driven Rates Unrealized

Posted: 01/2001

The Letter

CALLS-driven Rates Unrealized

In
the Coalition for Affordable Local and Long Distance Service (CALLS) proposal
announced last summer, a promise seemingly was made that consumers would see
their rates reduced.

The original intent of the CALLS was to re-examine access charges and to work
out a fair structure for fees between long-distance and local exchange
companies.

Obviously, when it comes to money, businesses can work like governments do.
Once a temporary tax is passed, politicians will find a way to keep it on the
books after its expiration date by redirecting it as an increase in some other
kind of tax. The same goes for fees and charges that businesses incorporate on
their bills.

The intention among major carriers and the Internet Access Coalition was to
develop an accord on access charges, which was supposed to provide consumers
some relief. AT&T Corp. (www.att.com) and
Sprint Corp. (www.sprint.com) even announced
that they would eliminate their minimum monthly usage fees, which should have
saved end users even more. However, a consensus from industry analysts is that
savings are not trickling down.

In a fascinating collection of question/ answer interviews, "Changing
the Rules: The Future of Telephone Access Charges," which
Telecommunications Reports International Inc. (www.tr.com)
published, a number of industry heavy hitters comment on the proposal, its
status and the promises.

Nearly all are skeptical that consumers will ever see any of the promised
savings. And there is concern that once the Bell companies gain entry into the
in-region long- distance marketplace, the rules of the game will change again.

According to Martha Hogarty, director of the Missouri Office of the Public
Council (www.mo-opc.org), the result of the
CALLS may actually backfire, as consumers may see an increased subscriber line
charge on the basic phone bill, and a Universal Service Fund fee.

The Universal Service Fund is a $650 million creation intended to help offset
the higher costs of doing business in regions of low teledensity.

Hogarty also says that with so many fees and charges listed on bills,
consumers are likely confused–which is the way she believes the proponents of
the CALLS want it.

Adds Scott C. Cleland of the Washington-based Precursor Group (www.precursorgroup.com),
in accepting the CALLS, the FCC (www.fcc.gov)
established no way to ensure that consumers receive any of the savings the plan
may provide.

"We think those cost decreases are going to fall to the bottom line as
earnings because not many of them will be passed on to the consumers," he
says.

The unkept promise of consumer savings is only one disturbing aspect of the
approved CALLS plan. It is a proposal with many questions, still waiting for
answers.

Bruce Christian
Editor


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