AT&T; Wins $8.4-Million Increase in Toll Charges

AT&T; Communications, which claims to be losing money on its California operations, won an $8.4-million annual rate increase from state regulators Friday--a fraction of the $63 million that the company had sought.

The Public Utilities Commission authorized the company to add a 2.397% surcharge to its customers’ bills for long-distance telephone calls within California, effective Dec. 1.

Consumers are unlikely to notice the increase, however, as the PUC earlier ordered a rate cut to take effect Jan. 1 to reflect reduced charges that AT&T; and other long-distance carriers must pay to local phone companies such as Pacific Bell for originating and completing their customers’ calls.

AT&T; claims that it has lost money on its California operations since the breakup of the Bell System in January, 1984, which severed local phone operations from the long-distance network. AT&T;’s intrastate tolls are now 16% less than they were then, John Dennis, vice president for regulatory affairs, said in an interview.

But the commission staff disputed some of the company’s costs attributed to its California operations, and Administrative Law Judge Lynn Carew had recommended that AT&T;’s rates be cut by $31.4 million. The commissioners noted, however, that AT&T; is now paying about that much more in lease revenue to Pacific Bell for jointly used equipment.

Dennis said AT&T; may appeal the PUC’s unanimous decision. But he charged that the commission fails to realize the competition that has developed in the state’s lucrative long-distance market. He said he suspects AT&T;’s competitors also “aren’t doing well” in California because the PUC sets AT&T;’s rates too low and the competitors feel that they must charge still less to remain competitive.

(Because of federal court rules governing the breakup of the Bell System, the commissioners still regulate AT&T;, but not such competitors as MCI Telecommunications and US Sprint.)