AT&T; Billing Shift Poses Problem for Regulators

Federal and state regulators on Friday began wrestling with the question of whose prices will go up if local telephone companies lose roughly $300 million a year in business from one of their biggest customers, American Telephone & Telegraph.

The Federal-State Joint Board, made up of members of the Federal Communications Commission and state utility commissioners, has set a Sept. 2 deadline for comments on what its decision should be.

AT&T; is gradually starting to send its own bills to customers instead of having them enclosed in local phone bills. If an experiment now under way in Minnesota works, AT&T; will take over more of its own billing rather than paying the local companies to send and collect AT&T; bills.

The money the local companies now get from AT&T; helps pay for postage, envelopes, computer time and other costs of sending monthly bills. Many of the costs will remain even if AT&T; bills are sent separately.

AT&T; is currently the only long-distance company paying significant amounts to the local companies for billing and collection services. If a large part of the fixed cost of sending a bill is shifted to long-distance customers, bills for local service will remain about the same, but a decision to make each customer pay a larger share of the cost of billing could mean an increase in everyone’s monthly charge.

For its part, AT&T; wants to handle its own billing, which could cost it more than the present system, so it can have more direct contact with customers by way of bill inserts.

A decision by the joint board is necessary by 1988, when local companies become free to raise or lower their rates at will for billing services.