July 9, 1999

Re:	Low-Volume Long-Distance Users (CC Docket No. 99-249)

Today, most consumers are reaping the benefits of thriving competition in the long distance market choice is abundant, innovation is rampant, and per-minute rates are the lowest they have ever been. But some consumers are being left behind. Low-volume consumers, in particular, are facing an array of new line-item charges that may exceed the offsetting benefits of per minute rate reductions. For some unknown number of consumers, the most important line the bottom line is increasing.

Rates are being restructured in part because of the market segmentation that naturally occurs in a substantially competitive and unregulated market. Additional causes of rate changes are the ongoing changes in interstate access charges and universal service support. What remains to be determined is whether some of the charges that are being imposed are attributable to marketplace imperfections, or distortions, and whether the operation of market forces alone can reasonably be expected to correct any consumer abuses that may be occurring.

I continue to believe the Commission was right in looking to competition, rather than entry, exit, and price regulation, as the primary mechanism for disciplining behavior in the long distance market. I also believe that the Commission has generally followed the appropriate path in reforming the collection of universal service support revenues and in allowing local exchange carriers to recover a greater share of their fixed costs through non-traffic sensitive charges to interexchange carriers. These developments are consistent with the Telecommunications Act of 1996; they are fair to all parties; and they promote increased economic efficiency, which should benefit all consumers.

But it is entirely appropriate to examine how these decisions are being implemented in the marketplace. There is anecdotal evidence that some consumers are being charged monthly fees that represent more than their allocated share of any associated universal service support payments or "presubscribed interexchange carrier charges" and are, in addition, being assessed monthly minimum fees whose reasonableness has yet to be established. Are low-volume consumers paying their fair share of the costs of interstate access, universal service, and carriers' costs of maintaining accounts or more than their fair share? If the latter, we need explore what corrective actions might be taken by this Commission, by our colleagues on state commissions, by the carriers, or by consumers themselves.

In short, we have a responsibility to assess the cumulative impact of our orders, and of the carriers' billing practices, on consumers as well as on competitors. Through this notice of inquiry, we are presenting these issues for discussion. I underscore that this is a notice of inquiry, not a notice of proposed rulemaking. We must understand market conditions and carriers' practices before we can properly conclude that there is a problem, much less determine how it should be fixed. This is precisely the right manner in which to proceed, cautiously, with open minds, and a willingness to understand the situation before we decide what should or should not be done.