Testimony, Comments & Press Releases

NASUCA joins with other consumer groups in supporting this proposal to reduce, rather than increase, the federal charges on telephone bills. The Telecommunications Act of 1996 was passed so that consumers would receive the benefit of lower prices caused by greater competition. Yet, since the passage of the Act, the federal charges on consumer bills have increased. NASUCA is pleased to be a part of the Consumer Group that supports a reduction in the charges paid on consumers’ bills so that the promise of the Act can now be realized.

The Federal Communications Commission has long recognized that one goal of the Act is to reduce rates to forward looking economic costs. This will require a reduction of federal rates in most areas. The Consumer Group proposal will move the rates that consumers pay toward that goal and make certain that the promises of the Act will be realized.

The Consumer Group proposal is dramatically different from that offered by CALLS. In the guise of favoring competition, CALLS would impose even higher rates on consumers and move costs from more competitive markets into higher fixed charges at the bottom of the bill. Substituting the CALLS proposal for current rates, would give the large local phone companies a $3.44 billion windfall. Instead, rates should be reduced by at least $2.5 billion, as the Consumer Group proposal requires. While the CALLS proposal may benefit the established local and long distance companies, it does so at the expense of consumers.

The FCC should accept the Consumer Group proposal because it uses sound economic principles to lower costs and customer charges at the same time.

National Association of State Utility Consumer Advocates
8380 Colesville Road, Suite 101, Silver Spring, MD  20910
Phone: (301) 589-6313 Fax: 589-6380
e-mail: nasuca@nasuca.org