LONG DISTANCE Agency freezes rates for carriers
WASHINGTON (AP) -- Federal regulators have imposed a six-month freeze on the rates regional phone companies may charge their competitors to use networks to provide local service.
The Federal Communications Commission's temporary rules place on hold the rates the major regional companies -- Verizon, SBC, Qwest and BellSouth -- charge MCI, AT & amp;T and other carriers.
The FCC needs time to come up with final rules on local competition.
If the agency can't meet the six-month deadline, the regionals would be free to increase lease rates by as much as 15 percent for existing customers and even more for new subscribers. That cost, or at least some of it, would likely be passed along to consumers.
About 19 million people -- roughly 15 percent of those with home phones -- buy local service from a company other than the regional providers. Those companies also serve about 30 percent of small businesses in metropolitan areas.
The FCC was forced to begin writing new phone regulations after a decision in March by the U.S. Court of Appeals for the District of Columbia threw out FCC rules that allowed states to require the Bells to lease parts of their networks at deep discounts to the long-distance companies.
Long-distance carriers said they needed the discounts to compete. But the regionals said the prices were set too low, and essentially forced them to subsidize the business of their competitors.