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September 25, 1997updated 03 Sep 2016 6:47pm


By CBR Staff Writer

Public interest group Keep America Connected, has called on Federal Communications Commission chairman Reed Hundt to investigate how much of the $1.7bn access charge reduction – announced in May (CI No 3,156) – US long distance telecom companies have pocketed and how much they’ve passed on to consumers. The interest group based its request on a thorough analysis of the industry. Along with a letter to Hundt, KAC enclosed a 10-page report offering detailed evidence that many consumers are not saving money on their long distance bills despite cuts in access charges, and may even be paying more. When the FCC made the access charge cuts, it predicted that the average consumer would save around $2.00 per month. The report states that only two of the country’s long distance carriers, AT&T and MCI, actually lowered rates, and that was for their most expensive calling plans. KAC says long distance companies employed a wide variety of strategies to hold on to the access charge reductions. Companies lengthened daytime calling periods (the most expensive rates of the day), increased calling card rates and charges and raised the price of directory assistance. The report indicates that Sprint’s standard rates actually increased by about $2.00 a month, while various Matrix, LCI and WorldCom rates increased as much as $1.45. KAC says that many carriers’ cheapest calling plans are more expensive now than before the rate cuts, and that the only thing that will truly pass any savings along to the consumer is either a mandate to the carriers, or increased competition. It remains to be seen whether either of the two is likely to occur.


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