FCC Delays Decision on AT&T; Price Plan

Federal Communications Commission Chairman Dennis R. Patrick, acknowledging concerns on Capitol Hill about a proposal to revamp the way AT&T; sets its prices for interstate services, on Monday postponed a decision on the plan until March.

A decision by the FCC on a so-called rate cap method of pricing for American Telephone & Telegraph Co.’s long-distance services had been scheduled for Monday. But after members of Congress said the FCC may not have legal authority to make such a change, Patrick issued a statment before the meeting saying that he would defer a vote until March to give lawmakers more time to study the plan.

“Given the importance of this docket, the complexity of the docket and in order to accommodate the interest in some additional briefings and the provision of some additional briefing information, I have agreed to reschedule this item for the meeting on March 16,” Patrick said at Monday’s hearing.

‘Acted Wisely’

“I believe it is very important for the commission to draft regulations which will improve the incentives that are facing dominant carriers,” Patrick said. “On the other hand, the Congress is intensely interested in this docket. . . . I would hope that in the spirit of the new Administration that we can use this as a foundation to establish a more constructive dialogue with members on both sides of the aisle with respect to this matter and other matters that are pending before the commission.”

Rep. John Dingell (D-Mich.), chairman of the House Energy and Commerce Committee, which oversees telecommunications matters, welcomed Patrick’s decision to delay.

“I think the commission acted wisely,” Dingell, who had criticized the FCC proposal, said in a statement. “The Congress had a number of concerns about the impact of the price caps proposal, and the FCC appears to be addressing them. As the details of the plan receive public scrutiny and go through the congressional hearing process, I hope the spirit of cooperation with Congress will continue.”

Since the early 1960s, the government has allowed AT&T; a certain profit beyond its costs. But the FCC proposed replacing this so-called rate-of-return regulation for “dominant carriers” such as AT&T; with ceilings on prices. That would include the seven regional Bell companies that AT&T; spun off in 1984.

The commission said its proposal would encourage greater efficiency and innovation and save customers $1.6 billion over four years if all the dominant companies participated. The FCC last May proposed that AT&T; be allowed to raise rates 3% less than annual inflation.

Skeptical Lawmakers

AT&T; said in a statement that it was “disappointed and frustrated” by Patrick’s deferral and that every day a decision was delayed, “the public loses.”

BellSouth, one of the seven regional phone companies that would be affected by the new pricing scheme, said, “The commission appears to have stepped away from an opportunity to save telephone users billions of dollars.”

Another regional company, Bell Atlantic, said, “We are sorely disappointed that the FCC and Congress have been unable to resolve their differences over how to best implement a price cap plan that will benefit consumers, the telecommunications industry and the nation.”

Lawmakers had been skeptical of the new plan.