Washington ? Federal regulators are looking into requiring AT&T to pay up to $500 million to cover unpaid telecommunications fees on its popular prepaid calling cards.

AT&T claims the cards should not be subjected to the fees, which go to local phone companies to cover their cost for connecting calls on their lines and to a federal fund that subsidizes phone and Internet service in rural areas and for schools and libraries.

AT&T used to pay the fees, but in 1999 added advertisements heard when someone placed a call using the prepaid cards. The ads, AT&T argues, make the cards an “information service.” Under FCC rules, companies that offer “information services” don’t have to pay the fees.

The FCC has been investigating and its staff is close to recommending that the five-member commission order AT&T to pay the fees, according to FCC officials. FCC Chairman Michael Powell has indicated his support.