Coalition Seeks Fast Action on Access ChargeProposal

Posted: 10/1999

Regulatory News

Coalition Seeks Fast Action on Access Charge

By Kim Sunderland

The newly formed Coalition for Affordable Local and Long Distance Service (CALLS),
which has filed a compromise proposal with federal regulators to revise the interstate
access charge system, seeks fast-track approval by the Federal Communications Commission
(FCC) for fear the plan might otherwise get buried for another year. Coalition members are
urging the FCC to adopt their unified proposal without modification or reject it by this
fall. If adopted, CALLS wants to see the plan implemented in January 2000.

"This proposal gives the commission the opportunity to put a solution in place …
these are issues that have been hanging around since the Telecom Act was signed into law
three and a half years ago," says CALLS attorney John T. Nakahata of Harris,
Wiltshire & Grannis LLP, Washington. Nakahata, formerly FCC Chairman William E.
Kennard’s chief of staff, has led discussions between the coalition members for the past
several months.

The participating carriers are AT&T Corp.; Bell Atlantic Corp., New York; BellSouth
Corp., Atlanta; GTE Corp., Irving, Texas; Sprint Corp.; and SBC Communications Inc.,
Atlanta. The major interexchange carriers (IXCs) and incumbent local exchange carriers
(ILECs) say their joint plan would reduce interstate access charges–the fees ILECs charge
IXCs to connect calls–by $5.6 billion annually over the next five years, consolidate
residential phone bills, reduce long distance rates and reform universal service. If long
distance companies pass on the savings, consumers will see lower rates. In turn, certain
flat-rate fees on local phone bills would go up. This is a plan for price-cap LECs, not
for rate-of-return carriers, Nakahata says.

Over the past few years, the FCC has sliced access charges by several billion dollars
to reflect the ILECs’ costs better. But the simple fact that these IXCs and ILECs have
come together under CALLS forces the FCC to give the coalition’s plan extended
consideration by allowing public and industry comment. Chairman Kennard reportedly is
encouraged that the industry is working together, but he wants to hear from consumer
advocates as well.

In fact, one source says the CALLS plan will be tacked on to the FCC’s new pricing
flexibility order, which seeks comment on several issues, including market-based or other
approaches to ensure that rates charged by competitive carriers are just and reasonable.
The CALLS plan to restructure access charges may get included with this portion of the
order, sources say, although Nakahata is unsure about this.

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