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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