FCC Staff to Recommend AT&T; Action

An AT&T; Corp. executive said Friday that Federal Communications Commission staff would recommend the company be cited for failing to pay as much as $500 million in fees on use of prepaid calling cards.

AT&T; says the cards should be exempt from the fees. But FCC staff members disagree, said Robert Quinn, an AT&T; vice president who handles government relations.

“The commission is likely to approve the staff recommendation because it’s a technical issue and it tends to defer to staff on technical issues,” said Scott Cleland, chief executive of Precursor, an independent research firm.

AT&T;, based in Bedminster, N.J., says the cards are an information service because they contain ads, but the FCC staff says they are telecommunications services, which are subject to government fees, Quinn said.

Shares of AT&T; rose 19 cents to $18.79 on the New York Stock Exchange. News of the recommendation was reported Friday by the Wall Street Journal.