The Alliance for Public Technology (APT) and the Communications Workers of America (CWA) file these reply comments to reiterate their concern that the potential benefits to consumers from adopting the Coalition for Affordable Local and Long Distance Service (CALLS) access charge and universal service reform proposal will be lost without Commission action to ensure that interexchange carriers equitably decrease residential long distance rates commensurate with the access reductions the carriers would receive under the plan. APT, CWA, and the National Association of Development Organizations (NADO)1 submitted comments generally endorsing the proposal because of its protections for universal service subsidies for basic telephone service.2 These joint commenters believe that such protections create the requisite foundation for future support of access to high-speed, high-capacity, interactive services for consumers throughout the nation, as Congress contemplated in Section 254 of the Telecommunications Act of 1996. The CALLS members demonstrate their universal service commitment by recommending establishment of a portable $650 million fund of explicit universal service support for rural subscriber line charge (SLC) caps to replace the implicit subsidies extracted from access charges. Additionally, they propose extended Lifeline coverage to insulate low-income consumers from SLC increases caused by the plan's suggested consolidation of the SLC with current charges related to the presubscribed interexchange carrier charge (PICC). 2

Despite these important aspects of the CALLS plan, APT, CWA, NADO and other commenters question whether reduced access fees for interexchange carriers will in reality yield long distance toll savings for all residential consumers and single line businesses.4 APT, CWA, and NADO urged in their joint comments that the Commission adopt the plan but "ensure that interexchange carriers cut long distance rates in a manner that maximizes the consumer welfare benefits."5 Accordingly, APT and CWA again admonish the Commission to institute adequate reporting and monitoring mechanisms to ensure that residential customers of all incomes gain the estimated annual savings of $1.2 billion that are possible if long distance carriers lower their toll rates to reflect a dollar-for-dollar non-discriminatory pass through of their reduced interstate access charges.6 The Public Utilities Commission of Ohio suggests similar measures.7 Such precautions will minimize discrimination against low volume users and other customers, while furthering significant reforms that ultimately will help move the nation closer to affordable, ubiquitous access to the advanced telecommunications services that APT and CWA believe will improve the quality of life for all people. Therefore, we respectfully recommend that the Commission adopt the CALLS plan as discussed in these reply comments.

Respectfully submitted,

Maureen A. Lewis
General Counsel
Alliance for Public Technology
919 18th Street, N.W., Suite 900
Washington, DC 20006
(202)263-2972

Debbie Goldman
Research Economist
Communications Workers of America
501 Third Street, N.W.. Suite 1100
Washington, DC 20001
(202)434-1194

December 3, 1999

End Notes

1 The National Association of Development Organizations (NADO), which joined APT and CWA in the comments the parties filed on November 16 1999, has elected to file separate reply comments in this matter.

2 Comments of the Alliance for Public Technology, the Communications Workers of America, and the National Association of Development Organizations on CALLS Proposal, CC Docket Nos. 96-262, 94-1, 99-249 and 96-45 (Nov. 16, 1999) (Joint Comments) at 2.

3 Ex Parte Memorandum in Support of the Coalition for Affordable Local and Long Distance Service Plan submitted by John Nakahata to Magalie Roman Salas by letter dated Aug. 20, 1999 ("CALLS Memo") at 2-3.

4 See Joint Comments at 2, 8-9; Comments of AARP on CALLS Proposal, CC Docket Nos. 96-262, 94-1, 99-249 and 96-45 (Nov. 12, 1999) at 4; Comments of the Public Utilities Commission of Ohio on CALLS Proposal, CC Docket Nos. 96-262, 94-1, 99-249 and 96-45 (Nov. 12, 1999) at 28; Comments of the Small Company Committee of the Wisconsin State Telecommunications Association on CALLS Proposal, CC Docket Nos. 96-262, 94-1, 99-249 and 96-45 (Nov. 12, 1999) at 9; and Joint Comments of the Texas Office of Public Utility Counsel, Consumer Federation of America, and Consumers Union on CALLS Proposal, CC Docket Nos. 96-262, 94-1, 99-249 and 96-45 (Nov. 12, 1999) at 43.

5 Joint Comments at 9.

6 Id. at 4. AARP and the Texas Office of Public Utility Counsel and its co-commenters, the Consumer Federation of America and Consumers Union, criticize the findings of the CALLS plan's benefits to consumers as described in the study titled "An Assessment of Consumer Welfare Effects of the CALLS Plan" by Stephen B. Posiask. APT and CWA released the study on October 25, 1999 and appended it to their joint comments. The critics assail the study's assumption that long distance carriers reduce toll rates in proportion to the decrease they receive in per-minute access charges. See AARP Comments on CALLS Proposal at 4; Texas Office of Public Utility Counsel Joint Comments on CALLS Proposal at 42. APT and CWA have always recognized, however, that the study's basic assumption of uniform pass through of access charge reductions affect the extent of possible consumer welfare benefits under the CALLS plan.

While acknowledging the potential benefits to consumers of all income levels, APT and CWA caution that savings might be lower than the study predicts because it assumes that long distance companies pass on their reduced access fees in lower toll rates for consumers. If that is the case, the organizations foresee perceptible gains for residential consumers, although greater savings will accrue to businesses and higher income customers with higher volume use.

"Consumers to Benefit from Proposal to Reform Telephone Rate Structures: Alliance for Public Technology and Communications Workers of America Release Study," Press Release issued Oct. 25, 1999, http://www.apt.org/policy/102599.html. See also Communications Daily, Oct. 25 1999 at 5 ("APT and CWA cautioned, however, that size of potential benefits is based on assumption that long distance companies pass on their reduced access in form of lower toll rates.")

7 See Public Utilities Commission of Ohio Comments on CALLS Proposal at 28.