1983-07-20 Public Hearings and Regular Meeting

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Bell's rate request Friday included $450 million for faster depreciation of capital investment be - ,,,Ouse of rapid technological change in, Wecommunications. Finally, Bell sought "only" $502 million in in- creases to pay for conventional increases in the cost of business and higher profits. Even so, a $502 million request would have topped the commis- sion's previous high rate request — last year's Bell rate case for $471.5 million. • 0 THE WALL STREET JOUIRL Friday, June 3, 1983 Judge in AT&CT Case Says He Seeks Ways. To Help Bell Firms Limit Local Rate Rises By ROBERT E. TAYLOR and JAME3 A. WHITE Stqff Reporters of THE WAIL STRELT JOURNAL WASHINGTON—A federal judge oversee- ing the breakup of American Telephone & Telegraph Co. indicated he was looking for ways to help Bell phone companies hold down increases in local rates, possibly at the expense of the parent. Judge Harold H. Greene said rate in- creases allowed by the Federal Communica- tions Commission beginning next year work at "cross-purposes" with the national goal of providing Americans with affordable tele- phone service. He noted that maintaining affordable ser- vice was a major objective in the court's August approval of AT&T's divestiture of its 22 local phone companies. Judge Greene said he will determine whether the 'FCC's rate decision in December impairs that goal and upsets the delicate balance that was sought in the original divestiture agree- ment. Attorneys in the case inferred the judge was considering changes in AT&T's divesti- ture plan that would shift some costs to the parent from the local Bell companies or oth- erwise strengthen the local units to hold down rate increases. The judge "is really looking for (added) revenue streams" for the local companies, said Patrick Wiggins, deputy general counsel of the Florida Public Services Commission. At a hearing reviewing the proposed_ AT&T divestiture plan, state regulators, tclecommunications suppliers and local Bell executives suggested to Judge Greene vari- ous measures aimed at strengthening the lo- cal companies. They included requiring the parent AT&T to assume .all expenses in. volved in the divestiture and to pay costs fo f providing all long-distance competitors with the same quality hookup to local customers.) as enjoyed by AT&T itself. Of those costs, estimated at $2.9 billion over five years, all but $206 million would be paid by the local companies under AT&T's proposed divestiture plan. Critics of AT&T's plan also contended that it assigns to the local companies too much of the potential liability for private an- titrust suits pending against AT&T. The plan would apportion the liability in direct rela, tion to the local companies' shares of the as- sets of the Bell System. Critics also urged Judge Greene to allow the local companies to obtain a wider range of Bell patents and to sell phone equipment after the divestiture under the Bell name. AT&T and Justice Department attorneys opposed ail the 'modifications suggested. Judge Greene didn't indicate which, if any, of the changes he would order before giving his final approval to carrying out the Bell System breakup that AT&T hopes to com- plete early next year. Judge Greene, sharpening previous criti- cism of the FCC, scored the agency's deci- sion to add at least $2 a month to every resi- dential phone bill and $4 a month for each business phone line to help cover costs of lo- cal service that the FCC says have been supported by long-distance charges. The judge invited the FCC to answer questions about the new, so-called "access charges," but the agency declined. Instead, the FCC filed written comments about the future use of the Bell name and logo without making specific recommenda- tions, Judge Greene said. "This is the kind of approach to problems which debilitated the regulatory route and left no choice other than this lawsuit and the breakup of AT&T," the judge complained. With only six months remaining before AT&T's target date for the breakup, AT&T attorney, Howard J. Trienens, urged Judge Greene to act promptly on the proposed di- vestiture plan. "Time is running and we're overloading the circuits," Mr. Trienens said. Judge Greene said he would do his best "to speed it up" without indicating when he will rule on the plan.