IP: STOP THE FCC LINE CHARGE INCREASE JULY 1st, 2001, NNI Asks the FCC

[David Farber <dave () farber net>]

> From: Bruce Kushnick <bruce () NEWNETWORKS COM>
> To: CYBERTELECOM-L () LISTSERV AOL COM
>
> NEW NETWORKS INSTITUTE
> Contact: Bruce Kushnick
>
> 212-777-5418, News () newnetworks com
>
> To Read the Complaint:
>
> TO BE RELEASED, Friday, June 29th, 2001
>
> DO NOT RAISE CUSTOMER PHONE RATES JULY 1ST, 2001, NNI ASKS FCC --- STOP 
> THE PHONEBILL SHELL GAME.
>
> NNI RECOMMENDS DROPPING THE ENTIRE "SUBSCRIBER LINE CHARGE" FROM PHONE 
> BILLS BECAUSE THE LOCAL BELL COMPANIES' PROFITS ARE EXCESSIVE AND VOILATE 
> "FAIR AND REASONABLE" STATUTES
>
>
> New York ---New Networks Institute today filed a Complaint with the 
> Federal Communications Commission (FCC) to not raise residential rates on 
> July 1st, 2001. Known commonly as the "FCC Subscriber Line Charge", this 
> obscure fee will rise to $5.00 a month, a 43% increase from the long 
> standing $3.50 per month. This charge was previously increased on second 
> lines, from $3.50 to $7.00 per month. For multi-line business customers, 
> the total amount has gone from $6.00 to as high as $9.20 per line per month.
>
> For a family or an at-home-worker with two phonelines, they have been hit 
> with an additional $60 a year for service, while for businesses, these 
> increases have meant hundreds of dollars monthly in extra charges.
>
> The increases to residential customers mean an increase to the Bells' 
> revenues of approximately $2.4 billion dollars for 2002.
>
> What's wrong with this increase? Just follow the money. These added 
> revenues are being given to the Bell phone monopolies: BellSouth, SBC, 
> Qwest and Verizon, who have become some of the richest, most profitable 
> companies in America. According to the Business Week Corporate Scoreboard, 
> (2/26/01) Bell profits in 2000 were 256% above the Business Week 500, 212% 
> above other utilities and 170% above America's top 9 companies --- 
> including GM, Ford, GE, EXXON, Wal-Mart, IBM, AT&T, Enron and Citicorp. 
> (For a detailed discussion of the Bells profits see our new report "Bell 
> Profits Are Outrageous". http://www,newnetworks.com/Bellprofits2001.htm )
>
> In our Report we contend that the current Bell monopolies' profits are 
> excessive and violate state and federal 'fair and reasonable' regulations 
> ---laws that are in place to make sure that the customer is protected from 
> rate gouging, in lieu of competition offering better or cheaper 
> alternatives. For example, the Telecom Act of 1996 states:
>
> "...Consumer Protection: The Commission and the States should ensure that 
> universal service is available at rates that are just, reasonable, and 
> affordable"
>
> "With this increase, the FCC is giving these monopolies, who are already 
> making unjust profits, more money. How can the FCC have such blinders on 
> as to not examine the overall profits that customers pay the local phone 
> company? It is a total revenue shell game with the customers always 
> losing" states Bruce Kushnick, Executive Director of New Networks Institute.
>
> The counter-argument for increasing this charge has been that as the 
> Subscriber Line Charge goes up, charges to Long distance carriers go down. 
> Local becomes more expensive and long distance becomes cheaper. However, 
> since this charge is a total monopoly --- there are virtually no 
> competitors to lower this charge and it must be paid as part of local 
> service ---- then it is still supposed to be regulated and therefore, it 
> must also be considered under the 'fair and reasonable" statutes of the 
> Telecom Act.
>
> The Money goes to the Bells: The Subscriber Line Charge (SLC) has various 
> names and definitions used on phonebills. It is usually called the "FCC 
> Subscriber Line Charge" but other names referring to the FCC are also common.
>
> "Though the name implies that the money goes to the FCC, the revenues go 
> directly to the local Bell companies. It's curious that America's 
> phonebills don't tell you that this charge is really more Bell profits," 
> added Kushnick.
>
> Based on the overall profits of the Bell companies from local service, NNI 
> is calling on the FCC to not only drop the planned increase to the 
> Subscriber Line Charge on July 1st, 2001, but to remove the entire fee 
> from all phonebills. To read the FCC's information see: 
> http://www.fcc.gov/cib/consumerfacts/SLC061500.html
>
> Please note that the figures presented are only for residential customers 
> and are an approximation based on available data. The total amount of SLC 
> charges would have been $4.4 billion for 2001, but with the increases, the 
> total collected for a full year will be $6.8 billion---- a $2.4 billion 
> dollars increase. The total "End User" charge, both for residential and 
> businesses, collected by the Bells and GTE for 1999 was $9.7 billion, 
> based on the FCC's annual report "Statistics for Common Carriers".
>
> A companion New Networks Institute report "The Real Truth in Billing: 
> Phonebills Held Hostage", will be released July, 2001. It compares Bell 
> profits to the charges on phonebills. For more information contact Bruce 
> Kushnick at: 212-777-5418, or to read the full Complaint, visit New 
> Networks Institute at http://www.newnetworks.com



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