Consumers Union Press Release.
Re: Schools and Libraries Fund.
May 21, 1998.
| Press Release May 21, 1998 |
Contact: Gene Kimmelman, kimmge@consumer.org Kathleen McShea, mcshka@consumer.org 202/462-6262 Consumers Union Washington, DC Office |
WASHINGTON – Charging that federal regulators have broken their promise not to penalize residential phone customers with extra fees as they began financing a program providing Internet hookups for the nation’s schools, libraries and rural health care providers, two of the nation’s leading consumer groups Thursday asked for the entire program to be suspended until the fees are axed.
"How can consumers trust a federal agency that disregards its public commitment to prevent rate increases, and then transforms that commitment to nothing more than an effort to avoid ‘undue’ price hikes?" asked Gene Kimmelman of Consumers Union and Mark Cooper of Consumer Federation of America in a letter to the Federal Communications Commission Chairman William Kennard.
According to these two consumer advocates, above market pricing for interstate access charges currently accounts for more than $8 billion in bogus charges to consumers. If these inappropriate charges were eliminated, the result would be enough to supply all the new revenue necessary for universal service programs, plus a substantial long distance rate reduction.
All three of the nation’s leading long distance telephone service provider have raised charges to consumers in conjunction with payments for the schools, libraries and rural health care Internet program. MCI is charging consumers $1.07 a month, AT&T has announced a $0.95 a month charge and Sprint currently charges $0.80 a month. The combined cost to consumers for these additional fees is more than $1 billion/year.
In their letter, Kimmelman and Cooper quote Kennard’s predecessor, Reed Hundt as saying flatly, "residential telephone service prices need not be increased…" in order to pay for the Internet program. On May 8, Kennard then stated that he was only committed to assuring that the Internet program did not "unduly increase costs."