Phone Deal Lowers Rates For Callers
FOR THE RECORD: (February 4, 1995): A Washington Utilities and Transportation action against International Pacific Inc. was undertaken before its acquisition last year by LDDS Communications Inc. An article in the Jan. 27 Spokesman-Review implied otherwise.
A settlement between Washington regulators and a Spokane provider of telephone operator services will save consumers $700,000 a year.
Tom Wilson, a telecommunications policy specialist with the Utilities and Transportation Commission, said the deal with LDDS Metromedia Communications will cut rates for operator services by almost half in some areas.
Six other companies, including Diversified Service Co. of Spokane, have agreed to abide by the terms of the settlement, he said.
LDDS, formerly International Pacific Inc., employs about 200 operators in the U.S. Bank Building and serves about 3,000 privately owned pay phones in the state.
Phones linked to providers of alternative operator services are typically owned by hotels, taverns, colleges or other property owners who get a share of proceeds from the companies. The alternative operator services have no incentive to limit charges, Wilson said.
Most of the 30,000 pay phones in Washington are owned by US West or telephone service providers. Charges for those phones have been regulated for years.
But LDDS and other similar companies that sprang up after the breakup of the Bell System were unregulated until 1991, when a cap was placed on charges.
Rates in place at that time were grandfathered, Wilson noted.
A Spokane-to-Seattle call placed through LDDS would cost $4.19, compared with $3.08 if placed through AT&T. That call will now cost $3.33.
In 1992, the UTC staff initiated a complaint against LDDS that contended the company’s rates were excessive.
Terms of the settlement will cap LDDS rates at those of AT&T, plus 25 cents. The difference, Wilson said, reflects higher costs for the smaller company. Also, LDDS will not have to lower rates at night, as AT&T does.
“We think that’s fair,” he said. “This will allow them to earn a reasonable profit.”
LDDS is the fourth-largest long-distance carrier in the United States after AT&T, MCI and Sprint.