Dear Mr. Berko:

I was told by a respected phone company consultant (lobbyist) that BellSouth and SBC Communications might take Cingular Wireless public next year at either $20 per share or $17.50. Please give me your opinion of Cingular and if you would recommend the stock on the initial public offering. I would like to own $10,000 of the stock.

My second question concerns a charge on my BellSouth monthly bill. The company charges me $6.50 a month for an “FCC Charge for Network Access.” Can you tell me what this means? This $6.50 charge amounts to 30 percent of my phone bill, and it sticks out like a sore thumb. Does any of this money go to the Federal Communications Commission? How much of this money is kept by BellSouth?

W.O., Delray Beach, Fla.

Dear W.O.:

BellSouth Corp. (BLS-$27.84), one of the Bell spinoffs from American Telephone & Telegraph, and SBC Communications Inc. (SBC-$25.08), another AT&T spinoff, jointly own Cingular Wireless. I haven’t heard a word from either company that they might take Cingular public in 2006 via an IPO at $20 a share. Nor do I know of their intent to take Cingular public at $17.50 or $15 or $12.50 or even $10 a share. Frankly, I doubt that investors would be dumb enough to invest money in a money-losing wireless company whose customers are running to competitors because Cingular service is so poor.

A close acquaintance, whose cell phone has become a body part, recently returned from a trip to Japan. He told me that his cell phone worked on a subway train traveling at 70 mph, in tunnels, over bridges, in basements, driving over mountains and on country roads well outside the city. And poor, fractured, broken, disconnected Cingular can’t hold a connection for 60 seconds in downtown Delray Beach without going on the fritz.

So far this year, Cingular, which acquired AT&T Wireless in October 2004, tops the cell phone complaint list. Monthly bills are inaccurate, area coverage is spotty, voice quality is poor, customer service is an oxymoron, connections don’t connect, receptions don’t recept, its information service gives out wrong numbers and on and on and on.

A list of Cingular complaints and more is available on www.consumerreports.org, which also notes that Cingular, with 49 million customers, had four times more complaints than Verizon, which has 44 million cell phone users. Cingular is a huge mess, and many Cingular employees lack the ability to learn the skills that can “unmess” the company.

However, Cingular should have good long-term potential if BLS and SBC can find intelligent workers with experience and commitment to make the technology work. Sadly, competent technical employees are becoming an endangered species in this country. So there may be little improvement in Cingular’s operations.

But you might consider investing that $10,000 in 400 shares of SBC Communications, which owns two other Bell spinoffs, has 51 million service lines, pays a swell dividend that has been raised in each of the past 20 years and yields a smart 5.7 percent.

I never really pondered that $6.50 FCC authorized charge for network access. I concluded that it was the usual bureaucratic panoply of mindless government mumbo-jumbo that was sneaked onto our monthly bills by phone company lobbyists who covertly enrich myriad congressional bank accounts.

And by golly, that’s just what it is. This monthly largesse is a fee that the Federal Communications Commission allows phone companies to charge their customers to compensate themselves for part of the cost of providing local connections for long-distance calls. What a load of tommyrot! Those costs have been recovered many times over.

The FCC does not require BellSouth to charge this fee, and not a penny, farthing or pfennig of that money accrues to the FCC. Every nickel, dime and quarter is banked by BellSouth. BLS has 13.1 million access lines from which it squeezes $6.50 every month. That’s $85 million a month and a tad over $1 billion each year. This charge has been on phone bills for at least eight years. At $1 billion annually, BLS has collected $8 billion so far.

So in early July I wrote Bill Nelson and Mel Martinez, both U.S. senators from Florida, and quite nicely asked them for an explanation of this charge. Neither Bill nor Mel answered my letter. And that’s one of the reasons I define “politics” as: (1) poli: a large number and (2) tics: blood-sucking parasites.

Anyhow, that annual lucre of $1 billion contributes 55 cents a share to BLS’s earnings. It’s my understanding that the FCC may authorize the phone companies to increase this fee from $6.50 to $7.75 in 2007, and BLS (thanks to the lobbyists) will keep every penny of that increase, too.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net.

© Copley News Service