AT&T; Rings In Decade With State Rate Cut

The new year and new decade spell lower telephone rates, effective this morning.

American Telephone & Telegraph cut its prices for long-distance calling within California by an average of 8.6%, an annual savings to AT&T; customers of $113.3 million.

The company earlier announced a $300-million reduction in tolls for calling between states and abroad, also effective New Year’s Day.

Most local callers in the state also get a price break today.

The California Public Utilities Commission ordered Pacific Bell’s rates cut $391 million a year, effective Jan. 1, saving the residential customers about $1.15 on the typical $26 monthly bill.

That reduction will appear as a percentage credit subtracted from January and subsequent bills until the PUC gets around, later this year, to recalculating the specific price changes for local services provided by Pacific Bell and the state’s second largest local carrier, Thousand Oaks-based GTE California. (GTE’s rates, which were sharply lowered a year ago, will start the new year unchanged.)

The AT&T; rate cut will reduce the cost of a 5-minute, weekday call between Los Angeles or San Diego and San Francisco to $1.06 from $1.20. A 10-minute call anywhere in the nation will cost up to $2.50. Since Monday is a holiday, daytime rates are discounted by 33% to 47% after 11 p.m.

AT&T; spokeswoman Linda McDougall attributed most of the reductions to state and federal regulators. All but $7 million of the California cut stems from a 1985 order by the PUC that began a seven-year reduction in what long-distance carriers pay local phone companies for completing calls and a corresponding increase in what local customers pay Pacific Bel and GTE California.

The interstate reduction is based on a similar cost shift ordered by the Federal Communications Commission, which regulates interstate service. Phone customers now pay a $3.50-a-month “subscriber line charge” to compensate local phone companies for revenue they used to collect from long-distance carriers.

In all, AT&T; rates for calling within California have dropped 45.5% in six years, while interstate rates fell 40%. AT&T;’s long-distance competitors have generally cut their rates proportionately.