FCC Plan Could Raise Residential Phone Fees

The Federal Communications Commission is proposing changes to the rules governing telephone company fees that could raise rates for residential phone lines and potentially create a windfall for established phone giants. Details of the plan are still subject to negotiation, but the outline of the proposal calls for allowing phone companies to raise by $1.50 to $2 the monthly fee charged customers for individual phone lines. Under the current payment system, some carriers charge a fraction of a penny per minute for calls to their customers, and others charge hundreds of times that much for the same service. The current system effectively subsidizes rates for rural phone customers. To woo broadband advocates and Democrats on the FCC, Chairman Kevin Martin's plan will propose asking phone companies to build high-speed Internet connections within five years. Consumers Union Senior Counsel Christopher Murray said the benefits of Internet in rural areas may not be enough to compensate for higher phone charges. State regulators and rural phone companies that stand to lose power and money from the changes are readying legal arguments against the proposal. They also are appealing to Capitol Hill, telling representatives that they stand to lose $2 billion annually if the rates in their areas are cut.