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Telecom Associations Urge FCC To Force AT&T To Pay Past-Due Bills for Unlawful Phone15 January 2005
The United States Telecom Association (USTA) and seven industry groups sent letters to the Federal Communications Commission on Jan. 10 and to the Senate Commerce Committee leadership on Jan. 11 calling for the Commission to reject AT&T’s unlawful phone card scheme and to ensure that AT&T pays what it owes.
AT&T has engaged in scandalous business practices in its pre-paid calling card business in which, to date, AT&T has admitted to avoiding more than $500 million in obligations owed to help maintain rural telecom networks and universal service.
“AT&T’s unlawful phone card scheme endangers the nation’s commitment to universal service and undermines the entire telecom industry,” explained Walter B. McCormick Jr., President and CEO of USTA. “Consumers pay their bills. Why shouldn’t AT&T? The Commission must put a stop to this outrageous behavior and force AT&T to pay what it owes.”
In a letter to the FCC, USTA and the other groups warn of possible consequences unless the Commission forces AT&T to make retroactive payments. “The Commission cannot allow AT&T to continue to violate its legal obligations or condone AT&T’s self-help actions by addressing this matter prospectively only. To do so would only encourage other carriers to come up with their own schemes to violate the law in order to reap illegal savings until the Commission forces them to comply with the law. The associations emphasize that failure to remedy this matter both prospectively and retroactively will have significant and ongoing repercussions on the industry and would detract from the Commission’s credibility.”
The groups also sent a letter to Sen. Ted Stevens (R-AK), Chairman of the Senate Commerce Committee, and Sen. Dan Inouye (D-HI), Ranking Minority Member of the committee, imploring them to “weigh in with the FCC on this important matter to rural Americans that is allowing one renegade company to flout the law and the good will of the American public for its own desperate self-interest.”
In this latest attempt to avoid paying what it owes, AT&T has employed a two-part scheme. In the first part, AT&T claims that briefly diverting long-distance calls between two towns in the same state to an out-of-state 800 platform makes it eligible for the lower rates carriers charge for interstate calls rather than paying the higher rates owed to local telecom providers for intrastate calls. The second part of the scheme comes when callers input their calling card code and then hear a brief audio clip promoting companies that sell the cards. AT&T claims that by including this brief audio clip, calls placed using these cards are no longer phone calls but are instead “enhanced” services which have no obligation to support universal service--the joint industry fund that ensures affordable, reliable telecommunications services for rural and fixed-income Americans as well as for connecting schools and libraries to the Internet.
The letters were signed by the United States Telecom Association, the Eastern Rural Telecom Association, the Independent Telephone and Telecommunications Alliance, the National Exchange Carrier Association, the National Rural Telecom Association, the National Telecommunications Cooperative Association, the Organization for the Promotion and Advancement of Small Telecommunications Companies and the Western Telecommunications Alliance.
Source: United States Telecom Association
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