Lawmakers try to keep phone bills low

WASHINGTON (AP) — Worried that phone bills will go up, lawmakers asked regulators Thursday to stop collecting money from telephone companies to pay for cheap Internet hookups for schools, libraries and rural health care providers.
The request was in a letter to FCC Chairman Bill Kennard from the top two members of the Senate and House Commerce committees, which have jurisdiction over the FCC.
The cheap hookups are financed through fees on telephone and other telecommunications companies, which pass them on to customers. Long-distance companies contribute almost all the money.
“The commission should immediately suspend further collection of funding for its schools and libraries program,” the lawmakers — Sen. John McCain, R-Ariz., chairman, and Sen. Ernest Hollings, D-S.C.; and Rep. Thomas Bliley, R-Va., chairman, and Rep. John Dingell, D-Mich. — wrote Kennard.
Consumer groups also have asked the FCC to stop funding the Internet program to keep from raising phone bills.
The lawmakers’ request comes at a critical time. The FCC is trying to determine how much to collect from telecommunications companies to pay for the cheap hookups for the second half of this year.
MCI Communications Corp. and AT&T Corp. recently said they will begin charging residential customers new fees on July 1 to pay not only for the Internet discounts but also to finance low-cost telephone service for the poor and other government-mandated subsidies.
MCI’s residential customers will be assessed 5.9 percent of their monthly charges for long-distance interstate and international calls. AT&T’s 80 million residential customers will be assessed 5 percent of monthly charges for interstate long-distance and international calls, and 1.8 percent of monthly charges for instate long-distance calls.
Lawmakers and others who have asked the FCC to halt funding for the cheap Internet hookups say they support the program’s concept but don’t like how the FCC is handling its financing.
The FCC has said phone bills should not go up because the costs of the Internet program would be offset by reductions in other fees phone companies pay. The commission estimates that providing discounted hookups to the Internet costs less than $1 per line per month for every phone line in the country.
Under pressure from Congress and phone companies, the FCC decided in December to slow funding for the Internet discounts and agreed to provide $625 million in subsidies to schools and libraries and $50 million to rural health care providers for the first half of 1998.
Last year, the FCC said it would give schools and libraries up to $2.25 billion in subsidies per year and rural health care providers up to $400 million a year.