FCC Allows AT&T; Competitive Pricing

The Federal Communication Commission said Friday that it approved a proposal that will enable American Telephone & Telegraph Co. to offer competitive long-distance rates to business clients in markets where it is being underpriced by competitors.

AT&T;’s competitive pricing plan, known as Tariff 15, is to take effect today, although the FCC can later modify its ruling.

AT&T; had requested the ruling so that it could compete against special pricing packages offered by other long-distance companies. Until now, AT&T; was required by the FCC to offer the same price to all customers.

The ruling applies only to those customers that are offered lower-priced “packages”--primarily major businesses.

“We were running into a lot of problems because customers would say, ‘MCI made a nice offer. We’ll stay with you. But What’s your answer?’ ” explained Edith Herman, national spokeswoman for AT&T.;

AT&T;’s main long-distance competitors, MCI Telecommunications and US Sprint, had opposed the proposal, arguing that it would let AT&T; unfairly fairly underprice its service to attract customers. Unlike its competitors, AT&T;’s rates are regulated.

The regulatory change also was opposed by consumer groups. They feared the change would halt the decline in prices for long-distance rates, which have fallen more than 30% since the breakup of the Bell System. They said they expected that rates would rise over the long term.