Evening star., 1943-01-21
y Million a Year
Saving Expected
On New Phone Rate
A, T. & T. Agrees to Cut
In Long Distonee
Overtime Charges
By the Associated Press.

Overtime Charges
By the Associated Press
Long distance telephone users who
require more than three minutes to
complete call will save approxi-
mately s22, 10000 year, the Fed
eral Communications Commission
estimates, through new rate reduc-
tions.
The FEC announced last night
that the American Telephone g.
Telegraph Co agreed to cut its
overtime rates by making the charge
for each additional minute one
fourth of the charge for the first
three minutes instead of one third
as at present. The charge for the
first three minutes remains the same.
For example. it was said that at
present a station to station call
from Washington to Denver costs
So for three minutes, IS for five
minutes, whereas under the new
schedule the five-minute call will
cost $3.50.
United States Saves S11,9OO, 900
Total reductions in long line rev.
enues were estimated at $50, TOO 600
a year, Approximately s11 1000 900
is expected to be cut from the Gov
ernment's bill for private telephone
and telegraph lines leased from the
A. T. & T. The Government leases
43 per cent of all such lines rented
by the company.
The new rates become effective
February Is for the long lines and
March l for the associated COM
panies. The reduction in private
line telephone and telegraph and
program rates become effective
February / on the long lines and
March for the associated COM
panies' interstate service.
"All persons or organizations using
leased private lines, including news
papers and broadcasting stations"
the commission added, benefit sub
stantially from the reductions. which
are equivalent to approximately Is
per cent in private telephone lines
and IS per cent in private telegraph
lines.
Questioned about the effect OF
the agreement in specific cases,
such as costs to news associations,
FEC experts were unable to give
complete answers at this time. 1t
was indicated, however, that
there would be no reductions in
some charges which now consti-
tute q substantial part of lease
wire costs
Gn New York it was learned
from telephone sources that the
35 per cent reduction in private
telegraph lines, including those
used on lease by newspapers and
broadcasting stations. Is an over
all reduction and will not apply
equally to all classes of users.
Where rates for commercial users
have been higher than press
rates. reductions in commercial
classifications will be propor-
tionately larger)
Broadcasters' Benefit.
"The small broadcasting stations,
as the casual users of telephone
lines, will benefit from a lowering
of the initial rate per hour for line
costs by approximately so per cent.
Larger broadcast users will benefit
by reduction from So to Sc per air.
line mile" ..
The agreement also calls for can
collation. of an investigation ordered
into all charges of the long lines
department, which includes the leas-
ing of telephone and telegraph wires
and long distance telephone service
Walter S. Clifford. president of
A. T. 8, T., noted in New York that
mo reductions in basic rates are to
be made and that the reductions
agreed to were those least apt
through stimulation of business to
add further burden to the already
overloaded long distance telephone
lines"
Long Lines Excess Profit.
He said extraordinary long-dis-
tance business had resulted-prob-
ably only temporarily-in an earn
ings rate for the company's long
lines department which was "in ex-
cess of the average for the Bell
Telephone System as a whole"
Explaining the FEC had exclusive
jurisdiction over long lines rates,
Mr. Clifford said the commission had
insisted that earnings from such
rates should be considered by them
selves and had insisted that, when
so considered. they produced a re-
turn greater than could be justified.
THE reductions in rates were
agreed to by the company" Mr..
Clifford added, because of this
position of the commission which
the company believes is unsound
under present conditions, but which
the commission considers is within
its discretion, and because the COM
pany felt it important to have the
rate proceedings discontinued so
that 1t could get on with the busi-
ness of helping in the war"