In a decision that could tangibly shrink the globe for US consumers - or touch off a war with overseas telephone companies - the Federal Communications Commission approved a plan Thursday to slash US consumers' international phone rates by as much as 80 percent.
The order, adopted by a 4-0 vote, will lower the benchmark charge for completing calls that originate in the United States from the current 88 cents a minute to between 15 and 23 cents a minute, depending on the economic status of the foreign country involved.
The order, which the agency predicts will save consumers as much as $5 billion a year, will occur in stages between 1998 and 2003.
"Eighty-eight cents a minute makes international telephone calls prohibitively expensive for many, many Americans," Federal Communications Commission chairman Reed Hundt said after the vote. "This is a nation of immigrants. People ought to be able to phone home, and they shouldn't have to be E. T. to do that," Hundt said.
The commission noted that its consideration of the issue "has generated significant interest nationally" and has drawn more than 90 comments filings from foreign governments and firms. Despite warnings that the decision will spark retaliation, the agency said it was moving ahead in anticipation of a recently concluded World Trade Organization telecom pact to lower global barriers to competition beginning next year.
US telcos, including Sprint, AT&T, and MCI, praised the decision. Reuters contributed to this report.
