TELEPHONES: Not as Good As It Sounds

Not as Good As It Sounds

At first glance, AT&T appeared to be offering consumers a big break. The telephone giant proposed to slash its long-distance rates by an average of 3.6%. As good as it sounds, though, the move will not ultimately make much of a dent in home phone bills. AT&T said it would carry out the rate cut only if it receives reductions in the "access charges" it pays regional phone companies. These fees give AT&T the right to connect its long-distance lines to local phone systems.

But if the regional companies get less money from access charges, they could ask regulators to raise...

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