FCC Delays AT&T; Plan for Special Discounts
The Federal Communications Commission on Friday put on hold until Oct. 1 an American Telephone & Telegraph proposal to offer a 15% discount on long-distance bills in return for a monthly $25 fee.
AT&T; wanted to put its rate proposal into effect May 1.
The plan is targeted to 1 million small businesses that pay at least $167 a month for long-distance service but not enough to save money with a WATS line. AT&T; had hoped to sign up 66,500 customers the first year.
The FCC ruled that the company had failed to show that it would not lose money on the so-called PRO America plan.
Unless the commission rules on the plan by Oct. 1, it will go into effect automatically. The agency asked AT&T; to provide additional information to support its cost estimates and demand projections for the new service.
AT&T; expected to lose money in 1985 as the plan started up but claimed it would make a profit in 1986.
Several AT&T; competitors argued that the proposed service could be sold for less than its cost and would be anti-competitive, predatory and possibly illegal.
The FCC’s action has no effect on a similar service that AT&T; offers within certain states.
In another action, the commission gave qualified approval to an AT&T; request for permission to streamline private-line rates and, in doing so, raise television transmission rates 46%.
The company said customers could find it easier to compare rates.
The rates apply to telegraph, voice, audio and digital lines as well as other direct connections but not dialed services.
Most short-haul lines--less than 100 miles--are likely to cost more, while long-haul circuits will cost less. AT&T; said the average bill would increase about 3%.
In another case, the commission approved a rate increase requested by MCI for long-distance calls of 55 miles or less.
An MCI spokesman said the 13% to 26% price hike “mirrors” a rate increase put into effect Friday by AT&T.;
Spokesman Gary Tobin said less than 10% of MCI’s traffic falls into the under-55 miles category.
