U.S. plans to act on global phone rates; FCC aims to reduce fees by offering waivers, setting price targets

Article Abstract:

An FCC plan that would dramatically reduce international telephone rates may save US businesses and customers billions of dollars. The FCC will propose new rules in Dec 1996 that are designed to reduce the international telephone fees, which are currently based on tariff agreements between monopolies instead of the real costs involved in handling the calls. This policy has resulted in an imbalance in which the foreign telephone companies are collecting about $5 billion more per year than US companies. Attempts to remedy the situation through political pressure have not been successful, so US regulators are now encouraging open competition in international telecommunications markets. The FCC proposal would change the rules that have kept US and foreign telephone companies from negotiating lower rates for international calls. Waivers from these rules will be offered to carriers, but the waivers will only be offered to companies in countries with telecommunications markets that are open to competition.

United States. Federal Communications Commission, International communication, International communications

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Bell Atlantic gets hung up in Mexico; regulatory feud casts doubts on $1 billion investment

Article Abstract:

Bell Atlantic's $1 billion investment in Grupo Iusacell SA de CV's cellular telephone network is threatened by a dispute with the Mexican Ministry of Communications and Transport (SCT). Bell Atlantic bought 42% of Iusacell with the understanding that the company would receive a concession to offer local telephone service, in direct competition to the monopoly held by Telefonos de Mexico. The SCT claims that it has no record of the agreement, which was made under a previous presidential administration. The SCT also claims that a new Mexican telecommunications law that changes the way concessions are granted may have made the Bell Atlantic agreement invalid. Bell Atlantic is negotiating to establish a one-time licensing fee, but those talks have broken off. The dispute is receiving attention from high-ranking officials in Washington, since the deal was the largest made by a US company since the passage of the North American Free Trade Agreement (NAFTA).

Investments, Telecommunications systems, Government trade agreement and tariff regulation, Mexico, Bell Atlantic Corp., BEL, Grupo Iusacell S.A. de C.V., Mexico. Ministry of Communications and Transport

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Universal service: the fairy tale continues

Article Abstract:

The Republican-controlled Congress plans to introduce sweeping telecommunication deregulation that will increase competition within the industry. However, Congress has not announced how much the deregulation will cost rate-payers, nor have they released their projections about how the markets will be affected. Congress plans to eliminate much of the rate regulation of the 1992 Cable Act, let utilities and cable carriers enter the telephone market and to allow international ownership of telecommunications organizations. The deregulation will also reform radio spectrum policies and establish telecommunication interconnections. Congress plans to establish a universal service requirement, but industry insiders report that will hinder the creation of a competitive local telephone market.

Government Regulation, United States. Congress. Senate, United States. Congress. House, Business-government relations, Competition

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