FCC Upholds Rules Restructuring Phone Prices

WASHINGTON — The government rejected requests to suspend new rules that restructure telephone prices to lower monthly phone bills.

The Federal Communications Commission said Wednesday that local phone companies SBC Communications Inc. and GTE Service Corp., which made the requests, had not satisfied legal requirements for the agency to take such action.

SBC has filed an appeal of the FCC’s regulations in a federal court in St. Louis and now plans to ask the court to suspend the regulations.

“We are disappointed by the FCC’s refusal to grant a stay,” said SBC Senior Vice President Zeke Robertson. He said the new provision would jeopardize investment and affordable phone service.

GTE, disappointed by the FCC’s action, hasn’t decided whether to ask a court to suspend the regulations, said spokeswoman Briana Gowing.

The FCC’s plan, adopted in May, would revamp myriad access payments local phone companies get for routing long-distance calls and for subsidizing local phone service.

The FCC ordered those fees--which now total $23 billion and make up about half the average long-distance bill--cut by $1.7 billion starting July 1.

To make up for the lost revenue, local phone companies say they will be forced to either ask state regulators to raise local rates or reduce investment in their phone networks.

The average long-distance bill is about $22.50 a month. The FCC says its plan would reduce the bill by 8% to 10%.

SBC shares fell 75 cents to $60.25 on the New York Stock Exchange; GTE eased 25 cents to $44.75 on the New York Stock Exchange.