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Archive for Friday, March 16, 2001

Rates too cheap, AT&T complains

Company takes case to state regulators

March 16, 2001

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— AT&T says Southwestern Bell is ringing up the wrong number for long-distance rates in Kansas, claiming that some of Bell's rates are anticompetitive and "unlawful."

AT&T, the nation's largest long-distance carrier, has asked the Kansas Corporation Commission to suspend and investigate Southwestern Bell's rates that are lower than 9.4 cents a minute. That is Bell's actual cost, according to AT&T estimates.

"All we're requesting is that the commission enforce the law that the Kansas Legislature has approved not to price below incremental costs and the cost of access," said Michael Jewell, an AT&T attorney.

The request comes just a week after Bell began offering long-distance service in the state. The company says AT&T's claims "are totally lacking merit" and were an attempt to interrupt Bell's entry into the market.

"They would rather litigate than compete," said Mike Moffet, a Bell spokesman in Topeka. "This is what has happened throughout the process."

Southwestern Bell's entry into the Kansas long-distance market followed years of battling for regulatory approval. The company still is seeking approval to sell long-distance in Missouri and other states where it's the dominant local telephone carrier.

Southwestern Bell already has won authority in Oklahoma and Texas. AT&T has made similar arguments in Texas.

Kansas regulators haven't announced whether they will launch an investigation of Bell's pricing, but a decision is expected soon.

The company's Kansas long-distance rates fall below 5 cents a minute for certain plans. The company's base rate is 10 cents a minute.

AT&T says its goal isn't to increase long-distance rates. It says it wants Bell's local telephone business to lower the access rates it charges long-distance companies for delivering or "terminating" long-distance calls.

AT&T claims Bell has an unfair advantage because it owns both the long-distance and local arms and can set its long-distance rates closer to the access costs without slashing profits.

"Because you're talking about money shifting from one corporate pocket to another corporate pocket, there's no out-of-pocket costs" for Southwestern Bell, Jewell said.

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