AT&T Company Long Lines Department 9 Common Carrier, Rates, Charges, see also Tariff Tariff, Rejection Of Wide Area Telephone Service (WATS) WATS Tariff F.C.C. No. 259 revisions, filed in response to deci­ sion and order (59 FCC 2d 671), rejected as it violated express findings and tariff filing requirements set forth in the prior deci­ sion. Carrier must file lawful tariff. Current tariff shall remain in effect pending suitable filing. F.C.C. 77-529 BEFORE THE FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554 In the Matter of AMERICAN TELEPHONE AND TELEGRAPH COMPANY (LONG LINES DEPARTMENT) Revisions to Tariff FCC No. 259, Wide Area Telecommunications Service (WATS), Transmittal No. 12745 MEMORANDUM OPINION AND ORDER (Adopted: July 21, 1977; Released: August 12, 1977) BY THE COMMISSION: COMMISSIONERS HOOKS AND WHITE CONCUR­ RING IN THE RESULT; COMMISSIONER FOGARTY CONCURRING AND ISSUING A SEPARATE STATEMENT. Background 1. On April 29, 1977, the American Telephone and Telegraph Com­ pany—Long Lines Department (AT&T or Bell) filed revised Wide Area Telecommunications Service (WATS) tariff schedules under AT&T Transmittal No. 12745.J According to AT&T, those revisions were filed to comply with requirements and guidelines set forth in our Final Decision and Order (Decision) in Docket No. 19989, AT&T Revi­ sions to WATS Tariff FCC No. 259, Transmittal No. 11935 (WATS), 59 FCC 2d 671 (1976). The WATS Decision directed AT&T to file tariff revisions on not less than 60 days notice to become effective 210 days after publication of the Decision in the Federal Register. By a subse­ quent Letter Order from the Commission, FCC 76-11031 dated No­ vember 30, 1976, a filing date of on or before April 30, 1977 was established. By letter dated April 15, 1977, the Chief, Common Carrier Bureau further directed that the tariff revisions be filed on not less than 90 days notice to the public. Therefore, the revisions are filed with an effective date of August 1, 1977. However, certain revised 1 Also considered herein is Hawaiian Telephone Company's (HTC) tariff filing of April 29, 1977, Transmittal No. 441, effective August 1, 1977, under which HTC Tariff FCC No. 13 would permit Hawaiian residents to make Outward WATS calls to, and receive Inward WATS calls from, the other 49 states. 66 F.C.C. 2d 10 Federal Communications Commission Reports rates and charges are filed to become effective on subsequent dates as hereinafter described. 2. AT&T introduced interstate Outward WATS service in 1961 to provide a monthly rate for interstate telephone services for subscrib­ ers having requirements for substantial amounts of communications to diverse geographical points. The Commission investigated AT&T's ini­ tial Outward WATS service offering in Docket No. 13914, AT&T Regulations and Charges for WATS, 37 FCC 688 (1964), on reconsid­ eration, 38 FCC 475 (1965). Outward WATS is a customer-dialed ser­ vice, i.e., it does not include operator-assisted calls such as person-to- person, collect, conference, credit card calls or calls charged to a third number. Interstate Inward WATS service was introduced by AT&T in 1967. Inward WATS calls are dialed by the caller but are paid for by the Inward WATS subscriber. Although both Outward and Inward WATS services utilize the same public switched network they do so in a significantly different manner. Outward WATS calls are screened and blocked (to determine whether a call is in the authorized service area or not) in the originating toll office, thus minimizing network set­ up and holding time. Such screening and blocking of Inward WATS calls presently occurs after the call has traversed the telephone net­ work, in a terminating toll office serving the Inward WATS access line. Bell's tariff requires separate access lines for originating Outward WATS and receiving Inward WATS calls. Both Outward and Inward WATS services are used in numerous computer applications, reserva­ tion services, credit verification services, store and forward message services, marketing services, etc. 3. Presently, the WATS tariff does not differentiate in charges be­ tween Outward and Inward WATS services. Outward and Inward WATS services are offered on both a Full Business Day (FBD) and Measured Time (MT) basis. In MT service the access line is continu­ ously available to the customer and the monthly initial period rate covers 10 hours of use per month with additional charges applying for each additional hour or portion thereof of use during the month. In FBD service the customer has continuous use of an access line with a flat rate for 240 hours a month, and additional period rates for usage over 240 hours which are set at a level of two thirds the equivalent hourly rate for the initial period. In both FBD and MT services, the customer has a choice of five progressively larger geographic service areas. The largest includes the entire United States, excluding Alaska and Hawaii and the customer's home state. In both monthly initial and additional periods, charges vary generally with the size of the geo­ graphical areas served. Itemized billing is not provided as part of the WATS offering and payment of monthly initial period charges is in advance. 4. AT&T describes the proposed tariff revisions, AT&T Transmittal Letter No. 12745, as follows: (1) Separate Outward WATS from Inward WATS by establish­ ing individual rate structures and rate levels which more closely reflect the costs of providing each service. Rate levels for heavy usage per access line for both Outward WATS and 66 F.C.C. 2d AT&T Company Long Lines Department 11 Inward WATS will be lower during an interim period of six months from the effective date of this filing.2 (2) Combine the Full Business Day (FBD) and Measured Time (MT) classes of service into a single rate schedule which is distinctly structured for Outward WATS and Inward WATS. The Outward WATS rate structure provides for a 10 hour initial period per access line with a tapered schedule of charges for overtime usage. The additional usage will be at progressively lower per hour rates at higher levels of usage per access line, reflecting the lower costs associated with these hours of usage. The Inward WATS rate structure pro­ vides for a monthly access line charge in addition to a tapered schedule of charges for usage. Usage charges will be progres­ sively lower per hour rates at higher levels of usage per access line, reflecting the lower costs associated with these hours of usage. The furnishing of Inward WATS will be sub­ ject to a monthly minimum period charge for ten hours usage per service group. In keeping with the goal of improving call completions and reducing network congestion, each Inward WATS service group will be required, for a period of 18 months, to consist of a minimum of two access lines in place of the present provision of two terminations for the first Inward WATS access line in a service group.3 (3) Decrease the number of service areas for the contiguous United States from 5 to 3 by combining present Service Areas 2, 3 and 4. Service Area "A-l" (present Service Area 1) will consist of approximately 10 percent of the total serving area. Service Area "A-2" (present Service Area 2, 3 and 4 combined) will consist of approximately 60 percent of the total serving area. Service Area "A-3" (present Service Area 5) will consist of the entire contiguous United States except for the state in which the access line is terminated. Consis­ tent with the reduction of the number of service areas, the number of rate steps has been reduced from 18 to 8. (4) Extend WATS to Alaska and Hawaii by introducing Service Area A-4 as an addition to the three proposed Service Areas encompassing the contiguous United States. This new Service Area includes service to the lower numbered Service Areas.4 2 For a period of six months from the effective date of the revisions embodied in this filing, AT&T states that lower rates will apply for both Outward WATS and Inward WATS usage, generally beyond 90 to 150 hours per month per access line According to AT&T, the temporary delay in the application of the higher rates for heavy usage is to allow customers the opportunity to plan for the increased charges or to adopt alternative communications solutions These higher rates are scheduled to become effective February 1, 1978 * Each Inward WATS service group is required to consist of a minimum of two billed access lines, in lieu of the additional termination for the first access line for each service group, previously furnished at no charge This requirement is an interim arrangement which expires effective January 31, 1979 AT&T indicates that studies of structural and rate alternatives will be made during the ensuing months to determine the most effective means of ensuring a high level of network call completions for Inward WATS It states that a specific plan based on the results of those studies will be submitted to the Commission prior to the expiration of the interim arrangement 4 In the past, WATS service has been limited to the contiguous 48 states See our discussion hereinafter concerning the provision of WATS services between and among Alaska, Hawaii, Puerto Rico, the U S Virgin Islands and the U S Mainland 66 FCC 2d 12 Federal Communications Commission Reports (5) Introduce a multi-element rate schedule for certain nonrecur­ ring charges. Installations, moves and conversions of the WATS access line and suspension of Outward WATS subject to charges for the elements required to perform these activi­ ties.