Such calls will be charged at the caller's prevailing long-distance rates.

The company maintains a central data base of long-distance rates.

As with all services, calls outside the local area are billed at long-distance rates.

"Consumers will ultimately be able to see a drop in these rates, just like they did with long-distance rates."

The company says its long-distance rates dropped by $462 million during the first 12 months after it came under price caps on July 1, 1989.

If we were to fund at the full $2.25 billion rate," he said, "there would probably be some upward pressure on long-distance rates.

While local costs would rise, long-distance rates would fall equally.

The cost of local telephone service has risen substantially, although long-distance rates have fallen.

A price war has ensued and long-distance rates are now half of what they were in 1985.

When access charges declined from 1984 to 1991, long-distance rates fell, too.