The Commission today released an item, adopted by a 4-1 vote on July 8, 1999, that inquires into the effect of certain flat charges on consumers who make few, or no, interstate long-distance calls. The inquiry addresses a variety of flat-rated charges that appear on consumers' bills, such as charges to recover the presubscribed interexchange carrier charges (PICCs) that the long-distance carriers pay some local phone companies, long distance carriers' monthly minimum-usage charges, and charges to recover Universal Service Fund (USF) contributions. The Commission invites comment on, among other things:
The Commission invites comments from all interested parties on the above issues so that it may explore all viable options to ameliorate the impact of flat, monthly fees on low-volume users in ways that are least intrusive for the industry.
- whether such charges have resulted from a competitive market dynamic;
- whether the Commission should rely on competition, such as the availability of dial-around services or the entry of Bell Operating Companies (BOCs) into long-distance service, to address the needs of low-volume customers;
- whether the Commission, states, and consumer groups should educate consumers regarding choices they can exercise in the marketplace, and whether such education might reduce the need for regulation;
- whether the impact of these flat charges warrants regulatory action, and the scope, method, and jurisdiction for such action, if it proves necessary;
- whether the Commission can take steps that do not require direct regulation of long-distance companies, but that would give the Commission greater control over the way long-distance companies pass access charges and universal service assessments on to consumers;
- whether the Commission should require local telephone companies to recover their universal service contributions from their own end users, at the same percentage rate at which they pay the contribution;
- whether a correlation exists between income and long-distance telephone usage, and whether the concept of universal service should include some amount of affordable interstate interexchange service for low-volume users, or whether other policies, such as rate integration, adequately address the affordability of long-distance service;
- whether the Commission should require long-distance carriers:
- to maintain rate plans that do not include a minimum monthly charge;
- to pass through a specific portion of interstate, switched access charge reductions to a basic rate plan;
- to pass through a PICC calculated as a percentage of the bill, capped at a certain dollar level;
- whether the Commission's Lifeline program is not reaching certain groups of consumers, and whether the Commission should create a similar program for low-volume residential consumers;
- whether the Commission should consider the impact of end user charges resulting from other reforms, such as number portability; and
- whether the Commission should require carriers to combine charges associated with all pro-competitive reforms into a single line item or allow carriers to identify these charges in some other way.
Action by the Commission, July 8, 1999, by Notice of Inquiry in CC Docket No. 99-249 (FCC 99-168); Chairman Kennard, Commissioners Ness and Tristani; Commissioner Ness issuing a statement; Commissioner Powell concurring and issuing a statement; Commissioner Furchtgott-Roth dissenting and issuing a statement.
Common Carrier Bureau contact: Neil Fried (202) 418-1530; TTY: (202) 418-2555.
Report No: 99-30
CC Docket No.: 99-249