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May 8, 1997updated 05 Sep 2016 12:43pm

FCC APPROVES REFORM OF LOCAL PHONE ACCESS RATES

By CBR Staff Writer

The US Federal Communications Commission on Wednesday approved new telephone fee guidelines that will drastically cut the amount of money that long-distance carriers pay local phone companies to complete long distance calls. These access fees paid by giants like AT&T Corp and MCI Corp to regional Bells, currently amount to roughly $23bn annually. The FCC ruling will cut the fees by $1.7bn in 1997, and by a total of $18.5bn over the next five years. While the long-distance carriers will pass on some of the savings to residential customers – AT&T has said it will kick back two-thirds – and services to rural and poor customers will be subsidized by the government through the establishment of a universal service fund, business customers are the ones who will be hit the hardest by the changes. Internet service providers – with more phone lines than the average business – are among those being bloodied by the development and, for now, the FCC says the possibility of additional access targeted at internet use is off the table, according to America Online Inc’s chief Steve Case.

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