Winners and Losers in New Fee Rules

The Federal Communications Commission on Wednesday issued wide-ranging rules that will change domestic phone charges. Here’s who stands to benefit from and be hurt by the changes:

WINNERS

* Long-distance companies: AT&T;, MCI, Sprint and other long-distance firms now pay the bulk of subsidies to fund universal access but will contribute much less under the new rules because local carriers will be required to sharply reduce some of the costs they charge long-distance carriers for originating and terminating toll calls.

* Local phone rivals: For the first time, companies that compete against the Baby Bells to offer local phone service will be able to share in the billions of dollars’ worth of subsidies that go to local carriers to pay for phone service in high-cost areas.

* Schools and libraries: A universal-service fund will be created to help link the nation’s schools, libraries and some rural hospitals to the Internet.

* Poor and rural customers: A universal-service fund will continue to benefit these customers with subsidies. The FCC says added subsidies will start Jan. 1, 1999.

LOSERS

* US West and GTE: Both companies serve a large number of subscribers in high-cost rural areas and are likely to feel the financial pinch of the FCC’s cut of long-distance access fees, which largely underwrite rural phone subsidies.

* Multi-line phone users: Businesses and residential customers will pay higher rates for extra phone lines. Hardest hit will be small businesses that make few long-distance calls and lack a private branch exchange, or PBX, to route calls from a single incoming line to several internal extensions. Also, customers who use a second phone line at home to use the Internet will pay slightly higher monthly rates. But businesses and residents with high-speed ISDN lines for Internet access will pay as much as 75% less in basic monthly costs for the service.

* Internet access providers: These businesses will be disproportionately hit because they maintain hundreds of phone lines through which their customers gain access to the Internet. However, they were exempted from paying additional special access fees to local phone carriers.