AT&T, local phone companies in $38M fight

AT&T is trying to get Minnesota to slash the cost of one of the last vestiges of a bygone telecommunications era, a move some argue could raise phone rates for rural consumers by as much as 50 percent as rural phone companies try to recoup the revenue.

At issue is an estimated $38 million in so-called access charges that firms such as AT&T pay to the local telephone networks to deliver their long-distance calls within Minnesota. The charges were devised by the federal government during the 1980s breakup of the AT&T telephone monopoly as a way to subsidize rural phone companies and their presumed higher operating costs with their relatively few customers spread out over a wide area. But, AT&T says, most rural phone companies don't need the subsidy today and cutting access charges will lower its long-distance rates for consumers. It also argues that, as phone calls shift from land lines to wireless and the Internet, companies such as Sprint and Skype, which pay much cheaper charges, should shoulder more of the burden.