Consumer groups asked FCC to investigate whether long distance co...

companies but were supposed to get lower long distance rates in return. Consumers Union and Consumer Federation of America sent letter to FCC Chmn. Powell Tues. charging that AT&T, for example, raised rates for basic service as much as 11% July 1, even though it experienced reductions in access payments: “In a functioning market, consumers would see savings as firms compete. Instead, long distance companies like AT&T are lining one pocket with a regulatory cost reduction and lining another by raising consumers’ rates.” Letter said “it appears that the vast majority of consumers are being denied the benefits they were promised when the CALLS plan was approved.” It’s also apparent that “competition in long distance is not strong enough to translate lower costs into lower prices,” letter concluded. In answer to long distance companies’ arguments that they were passing through savings with introduction of new calling plans and features, Consumers Union spokesman said reductions should be clearly evident in current rates paid by consumers. “It should be easy for consumers to see the savings” without having to change calling plans, he said. In addition, there’s no evidence of “dramatic reductions” in any calling plans and consumers paying basic rates are benefiting the least, he said. AT&T responded that access reductions enabled companies to design lower cost calling plans better suited to consumers’ needs. “The long distance market is hotly competitive and consumers know it,” AT&T said. “If they don’t like one company’s rates they can easily switch companies or calling plans and they readily do so.”