FCC Orders Phone Companies to Assign Long-Distance Carrier on Random Basis
The Federal Communications Commission, in a move to increase competition with AT&T;, formally ordered local telephone companies Friday to randomly assign a long-distance carrier to business and residential customers who do not choose one themselves.
The current practice, in which most customers who make no selection automatically are assigned to AT&T; Communications, is “unreasonable and discriminatory,” the commission unanimously ruled.
Instead, the new procedures require local phone firms to send ballots to customers listing all long-distance companies serving that area. If customers do not respond, they will receive a second ballot tentatively assigning them a long-distance carrier--which will provide all of their long-distance service unless they change their minds.
Beginning today, the FCC order affects areas across the nation, including California, where “equal access” will be implemented. “Equal access” means customers can make long-distance calls using MCI Communications, GTE Sprint, SBS Skyline Service, Allnet Communications Services and other companies with the same ease as AT&T; customers, who dial “1,” an area code and a seven-digit number.
In areas where “equal access” already exists, customers who did not choose a long-distance carrier will receive another ballot from the local companies. But those already with AT&T; will not be assigned elsewhere if they do not respond.
‘Active Consumer Choice’
FCC Chairman Mark S. Fowler said the decision will encourage “active consumer choice” and minimize federal involvement.
“This is not bad news for AT&T; at all,” he said, adding that AT&T; now has to earn its market share “on a competitive basis, rather than just having it given to them as a matter of default when people do not make choices.”
Now, allocations to long-distance companies will reflect the percentages of customers who respond to the ballots. If 20% choose one company--for example, GTE Sprint--that company will be allocated 20% of all customers in that area.
AT&T;, which opposed allocation, contended that customers did not actively choose a competing company because they wanted to remain with AT&T.; On Friday, Robert Ranalli, AT&T; vice president for consumer markets and services, called the FCC order “fair” but added: “We think the customer may be confused.”
But AT&T;’s competitors, who complained that they had been at a disadvantage, said the order will benefit both customers and the industry and spur new, competitive services.
“AT&T; has been calling for a level playing field and avoiding it,” MCI spokesman Gary Tobin said. “This is a major step in that direction.”
12.5% of Lines Converted
About 12.5% of the nation’s 88 million residential and business lines already have been converted to “equal access,” and FCC officials predict a total of 27.6% by the end of this month and 50% by the end of the year. “Equal access” is expected to be nearly complete by September, 1986.
The FCC plan was patterned after a similar plan used by Northwestern Bell in Omaha. In recent months, several other telephone companies have agreed to use or consider balloting and allocation.
In California, where Pacific Bell has converted 1 million of its 11 million lines to “equal access,” the company has been mailing ballots since April 15 but had planned to leave undesignated traffic to AT&T.;
“The best thing that can come out of this is that the vast majority of customers make a choice,” said Gary W. McBee, vice president of Pacific Telesis, parent company of Pacific Bell. “If it works, there will be very few customers that will be forced to go to a carrier they don’t choose.”
Beginning today, residential customers and businesses with a single telephone line also will feel the impact of an earlier FCC ruling that adds a $1-a-month charge to their bills. The fee will help pay for local telephone costs that previously were subsidized by AT&T; long-distance revenues. Next June, the fee will rise to $2.
