Originally created 03/19/01

Companies to tell consumers each long-distance rate change



WASHINGTON -- Opening each month's long-distance phone bill can be a little like unwrapping a surprise package: There's no guarantee you know exactly what's inside.

That's because carriers currently tell the government, not individual consumers, when they raise, lower or otherwise change their long-distance or international rates.

But the Federal Communications Commission is overhauling this system and requiring carriers to inform their customers directly about long-distance price changes. The commission, on Friday, added international calls to this effort.

As a result, consumers will, within the next year, be able to look up the prices for their long-distance and international rates on company Web sites and call toll-free numbers to ask about plans. Carriers also will have to create a contract with their subscribers and give them some type of correspondence detailing shifts in rates.

It will be up to regulators in each state -- based on its contract laws -- to determine what form that correspondence will take. But it could mean that consumers get slips of paper with their phone bills letting them know about rate changes. That would be similar to what credit card companies currently do with their users.

"We are going to do everything we can to give consumers a variety of ways to get that information," said Claudia Jones of AT&T, the nation's top long-distance carrier with 60 million subscribers.

That includes sending letters telling consumers about the new shift, making available a toll-free number and Web sites with information and including messages in phone bills, Jones said.

The goal is to give consumers more information "so they can pick the plans that best suit their needs," said FCC Commissioner Susan Ness.

The existing system is based on a century-old doctrine that allows long-distance companies to charge only the rates for services they have filed with the agency. The so-called tariff filing trumps all other agreements with customers, verbal or otherwise.

But consumers don't always know to look up the filings at the agency. And they may come too quickly for subscribers to keep up. For example, the nation's top long-distance carrier, AT&T, has filed 142 tariffs with the agency. Those could be for a range of plans and services.

Subscribers may only notice their per-minute rates or plans have changed once they receive their phone bill and do the math.

The FCC in 1996 ordered that long-distance companies stop filing with the commission and instead establish contractual relationships with their subscribers.

The commission said this would reduce regulatory burdens for the industry. But in this case, long-distance companies preferred government intervention, saying it would be costly and difficult to tell consumers about changes and new promotions.

An appeals court denied the carriers' challenge. Now, companies have until the end of July to begin informing subscribers about domestic long-distance rate changes.

On Friday, the commission voted to also require that companies tell consumers about international rates -- which can come as a particular shock to people who don't make many calls abroad.

International dial-around calls -- accessed by dialing a string of digits before the number-- and incoming collect calls will be exempt from the rules. Phone companies will have a nine month transition period, that begins 30 days after the decision is published in the federal register -- to make available information on their international rates.

WorldCom spokeswoman Julie Moore said it's too early to say how the company will fulfill both requirements. Because of the complexities of international plans, it may take longer to make that information available than domestic rates, she added.

AT&T said it plans to do both domestic and international beginning July 31.

On the Net:

Federal Communications Commission site: http://www.fcc.gov

AT&T: http://www.att.com/

WorldCom: http://www.worldcom.com/