FCC Blocks Increase in AT&T; Fee

The Federal Communications Commission blocked AT&T; Corp. from increasing a monthly fee that the long-distance carrier adds to its bills to cover the cost of federal universal service subsidies. AT&T; had planned to increase its 99-cent-per-month fee to $1.50 to offset recent increases in its subsidy payments, which go to lower the cost of local phone service in rural and low-income areas. The FCC’s common carrier bureau questioned the reasonableness of the change. AT&T; said the increase was needed because the payments it owed were increasing. “We plan to go over our numbers and our justification with the FCC as soon as possible,” AT&T; spokesman Jim McGann said. Under FCC rules, long-distance carriers may pass along the costs of the subsidy payments to their customers as long as the fees accurately reflect the payments the carriers owe. The long-distance industry contributes about $4 billion per year to programs that subsidize local phone service and provide low-cost Internet connections for schools and libraries.