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AT&T imposes 95-cent fee
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May 6, 1998: 1:13 p.m. ET
Long distance firm slaps residential customers with a new monthly charge
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NEW YORK (CNNfn) - Long-distance telephone company AT&T is charging residential customers an extra 95 cents per month, saying it needs to recover the cost it pays local telephone companies to complete long-distance calls.
AT&T imposed the fee in April for its 45 million customers who subscribe to one of its discount calling plans. The firm will charge its remaining 35 million customers a monthly fee of up to 95 cents beginning July 1, a spokesman said Wednesday.
The company says it will spend about $1.2 billion this year to pay local phone companies to complete long-distance phone calls made by AT&T customers.
On Tuesday, company chairman C. Michael Armstrong called for a reduction in these local-access fees, which were instituted this year as a result of Federal Communications Commission rules to help local companies defray their costs.
"The fees we must pay the local monopolies to complete long distance calls are at least eight to 10 times more than their actual costs," Armstrong said. "The difference over cost amounts to a hidden tax of more than $10 billion a year that long distance customers pay to the local telephone companies."
An AT&T spokesman said Wednesday that if the FCC reduced these fees, the company would pass on the savings directly to customers.
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