The Honorable William Kennard
Chairman
Federal Communications Commission
445 12th St. SW Room 8-B201
Washington, DC 20554
Dear Chairman Kennard:
I was appalled to read a May 19, 1999, story in the Los Angeles Times that positioned information from TRAC and an interview with me to suggest that the growing number of new fees and charges on long distance bills are related to the E-Rate. I wanted you personally to have a copy of my written response to the Los Angeles Times setting the record straight.
As you know, TRAC endorses full funding of the E-Rate discount program. We believe, with the Commission, that there is no basis for any of the new long distance fees -- universal service charge or PIC-C -- based on the Commission's decisions related to the E-Rate.
We both know that the long distance carriers have taken advantage of the restructuring under the Telecommunications Act of 1996 to increase rates and charges for low volume residential users. Indeed, there is double and some times triple "dipping" by these companies, with (Dip 1) reduced access fee savings being doubled (Dip 2) by new surcharges and (Dip 3) no corresponding rate reductions for low-volume residential customers.
The fact is that there is not adequate competition for low-volume, residential telephone users. We either need to stimulate real long distance competition for the residential user, like there is for business users, or we need to re-impose rate regulation for this market.
Thanks for your continued support of the E-Rate.
Sincerely,
/signed
Samuel A. Simon
Chairman
Cc: Commissioner Susan Ness
Commissioner Furchgott Roth
Commissioner Michael Powell
Commissioner Gloria Tristani
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May 21, 1999
Letters to the Editor Department
Los Angeles Times
Los Angeles, California
To the Editor:
Jube Shiver's piece on Wednesday, May 19, 1999, entitled "FCC Likely to Boost Fees to Wire Schools, Libraries," distorted and misused information from myself and the Telecommunications Research and Action Center to make it seem as if the Federal E-Rate program for schools and libraries was responsible for increasing consumer long distance bills.
We did not say that. TRAC has been charting long distance rates for residential consumers since 1984. Our latest research report showed that the long distance companies are imposing more fees and surcharges on residential consumers not because they have to, but because they can get away with it! The TRAC release on these matters made it clear that the new charges were "discretionary" for the long distance carriers.
TRAC is a strong supporter of the E-Rate program. We applaud the Chairman's efforts for full funding of the E-Rate program this year and for every year of the program.
The facts are that the long distance industry, led by ATT, is ripping-off the low volume residential users by imposing fees and surcharges that are not warranted, most of which even ATT would admit have nothing to do with the E-Rate. The facts are that in March of 1998, a little over a year ago, an ATT customer who made no long distance calls in a month paid ATT nothing. Today, that same customer will pay ATT $4.98 for making NO CALLS.
Why? Because ATT can get away with it. The FCC has deregulated the industry and does not regulate its rates, fees or surcharges. There is not, in fact, adequate competition in the long distance market for residential telephone customers. Today, 15 years after the break-up, ATT still owns two-thirds of the residential telephone market. Costs to consumers imposed by the long distance industry for the light user have been going up for years. What is needed now is for the FCC to re-impose regulation on the residential market and to prohibit by rule these bloated surcharges and fees on residential customers.
Finally, it should be noted that of the various new surcharges and fees that are being charged to consumers, the actual amount that could be attributed to the schools and libraries program is not more, on average, than $.20 a month per account. Yet, ATT and MCI have both adopted a monthly minimum usage fee of $3.00 per month per customer, on top of their various other fees and surcharges.
Members of Congress need to step into this mess to keep the E-Rate and stop the long distance company rip-offs!
Sincerely,
Samuel A. Simon
Chairman
Board of Directors
Cc: Jube Shiver
