Originally created 05/28/98

ATT to impose new charge to pay for cheap school Internet



WASHINGTON -- AT&T Corp. will begin charging residential long-distance customers a new fee to help pay for low-cost telephone service and cheap Internet hookups for schools, libraries and rural health care facilities.

The fee, beginning in July, is to be based on a percentage of residential customers' monthly bills for long-distance calls. Thus, a customer with no long-distance calls in a billing period would not pay the extra fee.

Specifically, residential customers will be assessed 5 percent of total monthly charges for interstate long-distance and international calls, and 1.8 percent of monthly charges for instate long-distance, AT&T spokesman Jim McGann said.

The charge to residential customers is designed to recover AT&T's share of government-imposed payments to support universally available phone service and discounted Internet hookups, McGann said.

AT&T's share is estimated at $1.6 billion for 1998, McGann said.

Since January, the company has been charging business customers 4.9 percent of their monthly long-distance bills to support these government programs.

"We've been signaling for some time now that we would apply a similar charge to residential customers," McGann said. "We can't eat these costs."

Notices about the new fee, called the Universal Service Connectivity Charge, will be showing up in June bills, and advertisements about the fee are expected soon to appear in major daily newspapers, McGann said.

If AT&T's costs to support the programs change, the fee would be adjusted accordingly, he said.

The new fee comes on top of a flat-rate charge AT&T and other long-distance companies now bill residential customers.

To cover long-distance companies' access to local phone networks, AT&T in April began charging residential customers on discounted calling plans an extra fee -- 95 cents per month. AT&T will apply the charge to all residential customers in July. Long-distance companies pay local phone networks to begin and end long-distance calls.

The FCC estimates that providing discounted hookups to the Internet costs less than $1 per line per month. FCC Chairman Bill Kennard has said he supports having this as a line item on consumers' bills.