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NEWS | ||||
Federal Communications Commission 445 12th Street, S.W. Washington, D.C. 20554 |
News media information 202 / 418-0500 Fax-On-Demand 202 / 418-2830 Internet: http://www.fcc.gov TTY: 202/418-2555 |
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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974). |
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Monthly Minimum Usage Charges Eliminated for Immediate Savings for Consumers |
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Washington, D.C. - Today, the Federal Communications Commission (FCC) reduced
telephone access charges paid by long distance companies by $3.2 billion, the largest decrease
ever adopted. Access charges are the prices long distance companies pay to local telephone
companies for access to their local phone network. Since the Telecommunications Act of 1996,
the FCC has been moving the price of long distance companies' access to local telephone
networks towards levels that reflect costs, and to date have reduced prices by a total of $6.4
billion. These reductions have stimulated billions of dollars of investment in infrastructure and
reduced consumer prices by 17% since the passage of the Act. Major long distance companies have agreed to pass these savings onto consumers living in all areas of the country, and have agreed to immediately eliminate monthly minimum usage charges. Although long distance rates have been plummeting for years, consumers who make no or few long distance calls have experienced increased phone costs because of monthly minimum usage charges, and other line item charges. The changes adopted today will accelerate competition in the local and long distance telecommunications markets; and set the appropriate level of interstate access charges for the next five years. Specifically, the reforms should:
Additionally, two phone bill charges - the existing presubscribed interstate carrier charge and the subscriber line charge - will be combined into one line item. For the first year, the new single charge is lower than the existing two charges combined. Consumers will continue to see savings, even as the charge increases in the second year. Subsequent increases in the charge are subject to further FCC action. The rules also continue to preserve the FCC's commitment to providing financial support to companies offering phone service in areas expensive to serve. Currently, roughly $650 million of revenue from access charges is used to support service to high-cost customers. Because this revenue is collected through interstate access charges, it is available only to incumbent local phone companies. Under the new rules, $650 million is removed from access charges and replaced with an assessment on all carriers' interstate revenues which is placed in a fund available to any carrier serving customers in high-cost areas. Today's action follows nearly two decades of contentious debate of complex issues stemming from the breakup of AT&T in 1984. In an effort to resolve these issues the Coalition for Affordable Local and Long Distance Services (CALLS) submitted a comprehensive proposal to revise the current access charges and universal service rules to the Commission in July 1999, and a modified version of the proposal in March 2000. Members of the industry coalition include AT&T, Bell Atlantic, BellSouth, GTE, SBC, and Sprint. They represent four of the five largest local exchange companies and two of the three largest long distance companies. Action by the Commission May 31, 2000 by Report and Order. Chairman Kennard, Commissioners Ness, Powell and Tristani with Commissioner Furchtgott-Roth concurring in part and dissenting in part. CC Docket Nos. 96-262, 94-1, 99-249, and 96-45
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