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News Digest

Fortnightly Magazine - July 1 1998

TELEPHONE BILLING PRACTICES. Citing the filed-rate doctrine, which bars deviation from published tariffs, a federal appeals court affirmed the dismissal of two class action suits against AT&T Corp. that sought damages for alleged fraud. The suite arose from AT&T's failure to disclose to its residential long-distance telecommunications customers its practice of rounding charges up to the higher full minute. (The carrier had disclosed the practice in tariffs filed with the Federal Com-munications Commission, but did not include the information in any of its advertisements or marketing materials.)

While finding some merit in the argument, the court rejected a call to modify the filed-rate doctrine to allow nondisclosure claims in light of increasing competition among long-distance carriers. Strict adherence was required, it said, absent Congressional authorization or direction from the U.S. Supreme Court. Marcus v. AT&T Corp., 138 F.3d 46, Feb. 24, 1998 (2nd Cir.).

ELECTRIC RESTRUCTURING. The Arizona Supreme Court decided on April 23 not to hear an appeal filed by electric utilities that challenged the plan by the Arizona Corporation Commission to open retail electric markets to competition beginning in 1999. The supreme court's action left standing a prior ruling by Maricopa Superior Court Judge Michael Dann, upholding the commission decision. See, www.cc.state.az.us/news/pr04-23.htm.

Business Wire

MASTERCARD INTERNATIONAL introduced a merchant incentive program in the U.S. to get more customers to use its card for recurring payments. MasterCard's new Service Industries Incentive Program targets insurance, utility, telecommunications and cable television industries, which comprise more than 90 percent of the $500 billion recurring payment category, according to the company. MasterCard will offer incentive interchange rates for all merchants in those industries that begin a recurring payment program.

The Gas Research Institute released a study on U.S. oil and gas reserves and a report on the impact of air quality standards on natural gas demand. The study, Assessment and Characterization of Lower-48 Oil and Gas Reserve Growth, found that producers have replaced production with new reserve additions. It also found that most of the growth has come from existing fields rather than from new discoveries, a trend likely to continue. The report, Implications of the New Ozone and Particulate Matter Standards, summarizes new ozone and particulate matter standards, estimates compliance costs, and discusses the potential affect of National Ambient Air Quality Standards on natural gas demand. The report also evaluates the impact of these new standards on other emission sources such as motor vehicles, off-road vehicles and non-utility sources. Copies of the report are available by calling 703-526-7832.

Houston Industries Inc. and Enova Corp. broke ground on El Dorado Energy, a $280 million, 480-megawatt power plant designed to provide energy to customers throughout the western United States. The El Dorado energy project should be finished by the end of 1999, about the same time the electricity market in Nevada is expected to open to competition. The two companies claim the El Dorado Energy plant is the first large-scale merchant power facility to be financed and built in the U.S. The project has no contracts or guaranteed revenue stream; it has been financed strictly

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