Business Notes Telecommunications

When local telephone companies ask their customers to choose a long-distance service, many budget-conscious consumers quickly ask for such cut-rate services as MCI and GTE Sprint. But as many as 70% of them never bother to respond. Under current federal communications rules, those customers who do not speak up are automatically assigned to American Telephone and Telegraph, even if they are already using a competing service. MCI Chairman William McGowan, GTE's Theodore Brophy and other AT&T rivals claim that this gives the already dominant company a highly unfair advantage. Last week the Justice Department recommended that the Federal Communications Commission change its so-called equal access rule to give AT&T's competitors a boost.

The proposal would require local telephone companies to ask customers several times which long-distance carrier they would prefer. If the consumers still do not make up their minds, they would go into a pool to be divided among long- distance companies according to the proportions of customers who have already decided. That way everyone would get a share of the default business.