New Firms Eager to Repair Phone Lines in Homes : Subscribers Will Be Responsible for Providing Maintenance as of Jan. 1

Dennis Love expects the small business he founded in Marin County 18 months ago to install and repair telephone lines inside homes and businesses to mushroom over the next year. From Extension Connection’s present three trucks and nine employees, he foresees a nationwide fleet of 1,500 trucks and “who knows how many” employees.

Love’s optimism in the future of his fledgling firm is not just an expression of what he calls his “American entrepreneurial spirit.” It also stems from a federal decision earlier this year to deregulate the telephone wiring inside customers’ premises on New Year’s Day, 1987.

“Come January,” he declared, “this industry is born! I think we’ll see a real revolution in the phone industry because of this decision.”

Such optimism may puzzle consumers made wary by New Year’s Day, 1984, when the Bell System was broken up. That act, undertaken to settle an antitrust suit against American Telephone & Telegraph, split the once-integrated networks between independent local phone companies and AT&T;’s long-distance service.

Even before that, consumers had to get used to the idea of owning phones they traditionally leased from Ma Bell, which repaired or replaced them as necessary.

“There is customer confusion,” acknowledged Bert Frydman, who is supervising the program under which Pacific Bell will transfer ownership of its more than $1.4 billion in telephone wiring within the homes and small businesses of more than 10 million phone customers. “But,” he predicted, “the confusion can be managed.”

Customers won’t be billed for the existing wiring, which they have already paid for over the years through the basic monthly telephone service charge.

Pacific Bell has begun its attempt to “manage” consumer confusion by slipping word of the impending change into this month’s phone bills. The notice includes a special, toll-free hot line (1-800-843-1941).

In November and December, the company plans to invite its residential customers to sign up for a maintenance service contract. Under such a contract, PacBell will continue to care for inside wiring--but at a charge, at least initially, of 50 cents a month for each residential line and $1 each for up to two business lines. (Larger business networks have been deregulated already.)

“If you sign up for that contract--and you’ll have to make a choice if you want it--you will continue to call 611 for repairs.” Frydman said. “It will require you to make a positive choice.”

Residential customers who choose not to accept the contract--and thus avoid the additional monthly charge--will be free to make repairs themselves, to hire someone like Dennis Love to fix what’s wrong or to have PacBell do the job for a proposed one-time charge of $65. (Small businesses will be charged $65 for the first hour, up to a maximum of $90.

(The question of who owns the inside wiring in a rental building appears to be somewhat vague. But a PacBell spokesman said the phone company intends to bill its customers for inside repairs, whether the customer is a renter or a landlord.)

Whether the monthly contract is a good idea depends on how often a customer expects to need repair. Pacific Bell estimates that inside wiring repairs occur on average only once every 12 years, so an average customer would pay $72 in monthly contract charges at Pacific Bell’s contemplated price before needing service.

The 2.3 million customers of General Telephone Co. of California will find heftier charges for the same options, spokesman Tom Leweck said: 95 cents a month per residential line and $1.95 for a single business line, or $85 minimum for a one-shot repair, plus $60 an hour after the first 60 minutes.

The Thousand Oaks-based company has yet to decide whether to ask customers to make a positive choice as PacBell intends or simply to sign them up unless they ask specifically not to pay the monthly fee, Leweck said, explaining: “We certainly don’t want to leave any of our customers without maintenance service if they want it.”

Monthly Contracts

Willard A. Dodge Jr., a telecommunications engineer for the California Public Utilities Commission who has been following the issue, saw virtue in the monthly contracts, reasoning: “Some people, such as lifeline customers, don’t have $60 or $70 for a repair. For them, a maintenance plan may be valuable--if the price is fairly set.”

After Jan. 1, however, it will be competition and not the PUC that will determine fairness.

Love said he founded Extension Connection 18 months ago after the phone company charged him, he said, $170 to install one phone jack. “I wanted to prove a point--that one small company can be profitable at a price very much less than the phone company charges.” His current rate is $40 an hour, he said.

But Love believes that phone companies should not be granted carte blanche to move into the brave new world of unregulated inside wiring, given its ready access to all of the customers in the impending industry. To do so, he said, flies in the face of the FCC’s intent in deregulating the wiring to provide competition that should reduce costs and improve service.

“We’ve got an electric company that seems to do very well in this country without getting into repairs of appliances,” he said. “We’re in the same kind of situation with the phone utility company.” He said he intends to go to court over the antitrust issue.

Love and about 25 other inside-wiring contractors plan to meet Nov. 5 in St. Louis to give birth to a trade association, the International Telecommunication Contractors Assn., which will be based in Chicago and headed by David E. Szymanski. Its aim will be to set service standards and certify its members as competent to handle telephone installations and repairs.

(Szymanski is general manager of one of the earliest repair companies, CrossCom National Inc.--a company that came into being to handle inside telephone wiring for Walgreen Co., which operates a nationwide chain of drugstores from headquarters in the Chicago suburb of Northbrook. One of CrossCom’s subcontractors was Dennis Love, Szymanski said.)

Love thinks that he may have at least one ace up his sleeve as he attempts to tilt with the phone company for the inside-wiring repair business: a device he has developed--called a station release breaker--that will enable customers to isolate the defective area of the wire. The device, similar to household electrical circuit-breaker panels, will enable other phones in the home to work until a repair can be made, Love said.

For their part, the phone companies, under urging by the PUC, intends to replace their present “network protectors,” which are installed outside homes where inside wiring connects to outside wiring, with a device called a standard network interface.

Finding the Trouble

Frydman said the device will enable customers who lose the dial tone to plug their phones directly into the outside line to determine on which side of their wall the trouble--and repair responsibility--resides. Until these boxes are installed, however, the phone company will continue to isolate the source of trouble at no charge to its customers, he said.

The PUC, which endorsed deregulation of inside wiring, may yet determine some ground rules, such as whether the phone companies may offer a positive choice, such as PacBell intends, or a “negative option,” such as General Telephone is considering.

“The commission is concerned that customers’ confusion be minimized and that they be able to make an informed choice,” said Rufus G. Thayer Jr., an attorney with the PUC’s public staff, which represents utility customers.

But come New Year’s Day, the PUC will lose its jurisdiction over who does inside wiring and for what price.