NEW YORK (CNN/Money) -
Millions of consumers and small businesses could face higher phone-service prices under proposed new rules by the Federal Communications Commission, according to a published report.
USA Today reported Wednesday that the FCC staff recommendations on the rules would be tougher on the so-called Baby Bells' rivals than some FCC officials had suggested early last month.
The paper said that the final rules could still be modified significantly before it's voted on by the five commissioners later this month, according to an FCC official who spoke to the paper.
But the proposed rule would allow local phone companies such as Verizon (Research), SBC (Research) and BellSouth (Research) to sharply raise the government-mandated lease rates charged to long-distance providers such as AT&T (Research) and MCI (Research) in as soon as in six months. The long-distance companies would likely pass on those increases — possibly $8 to $10 a month — to consumers, according to the paper. About 20 million consumers could be affected by the new rules and rates.
The paper said that FCC officials had suggested in November discount rates for residential customers could have stayed in place for up to two years.
"At best, this threatens significant phone rate increases for consumers," AT&T Vice President Robert Quinn told the paper. "At worst, it means that consumers will have no choice but to get their (phone services) from the Bell monopolies."
The proposed rule also would end the discount for Bell competitors from leasing Bell wires to serve small businesses in most large markets, according to the paper.
Some FCC officials say the proposal is needed to comply with an appeals court ruling earlier this year that struck down the discount-leasing rules. FCC Chairman Michael Powell says customers now have other choices to the Baby Bells' service, such as wireless services.
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