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company said. The rate reductions would take effect Jan. 1, if they are approved by the Federal Communications Commission. Reacting to the
proposed price cuts, MCI Communications Corp. and US Sprint Communications Co., the nation's second-largest and third-largest long distance
companies respectively, said their response would depend on what the FCC finally approves but both said they intended to remain competitive
with AT&T. AT&T, the nation's largest long-distance company, proposed to the FCC that its rates drop as much as $800 million, but AT&T said
the exact amount will depend on the access charges the FCC allows the local telephone companies to collect from long distance carriers,
which must pay the fees to hook into the phone local network.
AT&T has challenged the new access rates filed by the regional Bell operating companies, contending they are more than $1 billion too high. In
proposing its new rates, the long-distance leader told the FCC it expects local companies' access fees to fall by at least $200 million -- which
would amount to an average rate reduction of less than 1%. But the company said it believes the FCC will order an additional $600 million in
reduc tions based on AT&T's challenge.
"We're confident the FCC will recognize that access charges filed by the local telephone companies need to be substantially reduced, which
would mean more savings for our customers," said Larry Garfinkel, AT&T vice president for marketing. He said the company filed its proposed
rates based on disputed charges because "we wanted to let the public react ... and further to let the FCC have full knowledge of where we
were heading given our expectation that we had a valid basis for our dispute."
AT&T's long-distance rates have fallen by about 34% since the company was stripped of its local operating companies by an antitrust decree
nearly four years ago. Since then, phone rate payers have been paying a larger share of the
costs of maintaining the local network through monthly subscriber line charges,
now $2.60 for residential customers. That has reduced the long-distance companies' share of local network expenses, which they pay in the
form of access charges. Jack Grubman, a telephone analyst with PaineWebber Inc., said AT&T's proposal targets business customers
because "that's where the competition is and where the better (profit) margins are." In addition, it aims to keep the pressure on competition in
international calling by extending discounts to more customers. Grubman added that, if the company's rate proposal is approved by the FCC, he
would expect no further cuts in AT&T rates in 1988. Wendell Lind, AT&T administrator of rates and tariffs, said the cuts for business and
residential customers are about the same because business cuts are offset by a proposed $128 million increase in AT&T's private line rates.
AT&T is the only long-distance company whose rates are regulated by the FCC, but its prices set the pace for the industry. Though AT&T is far
larger than any of its competitors, its market share has been declining since divestiture and the company now says it serves about 75 percent
of the market. In addition to the reductions in basic long-distance rates, AT&T proposed cutting prices by 5% and 5.7% for its Pro-America
calling plans. The company also proposed to reduce prices by 2.9 percent for its 800 Service customers and 4.4 percent for WATS customers,
although it would increase the monthly access line charges for those plans by $3.20 to reflect higher special access charges filed by the local
phone companies.
US Sprint Operator Service Traffic Increases 40%
ORLANDO, Fla. -- US Sprint Wednesday announced its long distance operators who began saying, "May I help you?" just five months ago, are
now handling 3« million calls a month.
The fiber-optic long-distance carrier, offering the only operator service alternative to AT&T has experienced a 40 percent growth in operator
service calls since it announced its service July 1. Amanda Weathersby, US Sprint vice president of product marketing, said Tuesday, "More
and more people are taking advantage of our call completion assistance and alternative billing arrangements. "Customer surcharges are the
same as AT&T with the added benefit of US Sprint's fiber-optic quality and lower long-distance rates." US Sprint currently offers person-to-
person, station-to-station, call completion and collect calling. US Sprint has announced an agreement with US WEST Service Link that will allow
anyone to call on US Sprint and charge their calls to a Regional Bell Operating Co. calling card beginning in first quarter 1988.
"Previously, our operator service was available only on pre-subscribed US Sprint phones and recently we added operator assistance for US
Sprint FON CARD customers," Weathersby said. "With this new agreement, we'll be able to expand our operator service to markets such as
pay phones, hospitals, and hotels/motels." The newest 24-hour operator service center in Dallas began operations on Oct. 5. US Sprint's other
operator service centers are in: Cherry Hill, NJ; Atlanta; Lombard, IL and Reno, NV. US Sprint is a joint venture of United Telecommunications
Inc. of Kansas City, MO and GTE Corp. of Stamford, Conn.
Pacific Bell Pursuing Calling Card Thief
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