FCC Acts to Freeze Wholesale Phone Rates

The Federal Communications Commission on Friday issued interim telephone competition rules that would freeze wholesale rates for six months but let prices triple after that.

The order would allow AT&T; Corp., MCI Inc. and other companies that lease the lines of local phone companies like SBC Communications Inc. to avoid immediate rate hikes.

The order, approved on a 3-2 party-line vote July 21, also calls for comments on how to spur competition for local phone service in light of a U.S. appeals court decision that threw out the agency’s previous competition rules.

But the order doesn’t include amendments that Chairman Michael K. Powell had sought in an effort to give Bell competitors more access to high-speed lines. The FCC’s two Democrats found the amendments insufficient.

The rules take effect after a 30-day period during which the agency may reconsider them.

“The current commission is on track to butcher the pro-competitive vision of the 1996 [Telecommunications] Act,” Commissioner Michael J. Copps wrote in dissent. “And it is sticking consumers with higher telephone rates and fewer choices. The people who pay America’s phone bills deserve better.”