Sen. Stevens Blasts AT&T on Calling Cards
Senate Commerce Committee Chmn. Stevens (R-Alaska) had strong words for AT&T, which he said was skirting its universal service fund (USF) obligations by not applying the fee to its prepaid calling cards. AT&T has argued that since the cards also feature an ad, it’s an information service rather than a long-distance service. Stevens’ anger was also directed at AT&T’s efforts to use these calling cards to direct complaints to members of Congress, who he said were inundated with calls from constituents concerned about the issue.
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Stevens disagreed with AT&T’s interpretation that the prepaid calling card was an information service and also didn’t agree with AT&T’s interpretation that collection of past USF obligations would be a “retroactive application” of a regulatory decision. Stevens said he’s opposed to retroactive applications of policy, but added that “when we looked into it, it was not a retroactive application.” Stevens said AT&T’s efforts to classify the service as an information service is “really absurd.”
AT&T has claimed to the FCC that the services offered by the card “falls squarely within the information service definition because it makes available to the subscriber additional, non-call-related information,” AT&T told the FCC in Nov. An AT&T spokeswoman said the FCC deregulated those enhanced services 10 years ago. “Changing course by re-regulating now would only cause economic harm to the very people the universal service fund was designed to benefit. This will be particularly unfortunate for those groups who most often use these cards, such as low-income, rural residents, senior citizens, members of the military and Native Americans. Rather than targeting these consumers, the FCC should concentrate on ensuring the long-term viability of the universal service fund,” the spokeswoman said.
Stevens and others have claimed that AT&T owes at least $160 million in USF contributions dating to 1999. Telecom associations including USTA, OPASTCO and NTCA have argued that AT&T also owes $340 million in access charge payments back to 3rd quarter 2002. Stevens didn’t address the $340 million, saying it’s a different issue.
But perhaps what most upset Stevens is AT&T’s efforts to use the message attached to the calling card to contact Congress on this issue. An industry source said callers who entered their zip codes received another phone number to call later. That number directs callers to their members of Congress. An industry source said thousands of calls were generated to Congress. Stevens noted that Alaska residents were sent to Sen. Murkowski (R-Alaska), not to him. “That’s another thing: They didn’t want to take me on directly,” he said.
Stevens said this activity by AT&T was “very wrong” and described it as a “disinformation campaign.” Stevens said his office was “inundated” with calls from other Senate offices about AT&T’s issues. “We have no way of dealing with this,” said Stevens, who emphasized this is an FCC issue, not a legislative issue. “I think the use of the card in this fashion, to put onto a card that someone has purchased to make telephone calls, a message telling them to call their Senator and lobby the FCC is absolutely wrong,” Stevens said. “As a matter of fact, it’s a lobbying activity in my opinion and they should cease and desist that.” AT&T has said it will no longer give callers the congressional information, but instead will keep a tally to later inform Congress about customers’ views on the issue.
Stevens also said he expects the FCC to reject AT&T’s petition. “This is not something that we should interfere with -- to stop the FCC from deciding what it currently is going to decide, which I believe is correct -- that these fees should have been paid all along.”
But there is support for AT&T, particularly from the military. Undersecy. of Defense David Chu wrote FCC Chmn. Powell in Jan. urging the FCC not to make a decision that would raise calling card rates for military service members. AT&T has the exclusive contract to provide calling cards at overseas bases. Chu also notes that the 2005 Omnibus Appropriation Bill included language in the conference report that urged the FCC not to raise rates. “Whatever the Commission’s determination, our hope is that these costs are not passed directly or indirectly by telecommunications providers to military personnel,” the letter said. The Concerned Veterans Communication Coalition, made up of more than 30 military and veterans associations, wrote to President Bush urging that calling card rates not be raised. “Re-regulating these calling cards during a time of war would place additional financial hardship on our Armed Forces personnel serving so gallantly in the War on Terror,” the letter said.
Stevens had his own views on how the military should manage telecom contracts. “I would hope that the next contract with the Department of Defense is not so exclusive and we have the ability to have competition providing service to members of the armed services. I think that contract is up for renegotiation and I do believe it will not be as exclusive in the future,” Stevens said.