Phone Companies Offer Revised Subsidy Proposal to FCC

Major long-distance and local telephone companies offered a revised proposal for their push to reform the U.S. phone subsidy system by agreeing to cut further some of the fees they charge consumers.

The most significant concession in the new proposal offered to the Federal Communications Commission came from AT&T; Corp., which offered to scrap a $3 monthly minimum charged to millions of its customers who are not on a discount calling plan.

Other major phone companies, including Sprint Corp., also backed the plan, with the notable exception of MCI WorldCom Inc., which is acquiring Sprint.

People who make very few or no long-distance calls each month would be the greatest beneficiaries of the changes, industry officials said.

Regulators and consumer groups had expressed concerns that the initial plan offered last July merely shifted payments and fees without providing solid benefits to consumers.

FCC chief William Kennard said he was encouraged by the changes, but wanted to hear from state regulators. Consumer groups called the plan an improvement.