PUC Fights Wiring Order as Favoring Phone Firms

The president of the California Public Utilities Commission said Tuesday that the PUC is likely to challenge a Federal Communications Commission order under which telephone wiring inside homes will become the property--and financial responsibility--of phone customers, effective New Year’s Day.

Repair and maintenance of these wires have always been the responsibility of local phone companies, whose costs are included in the monthly service charges paid by all customers.

“We’re looking at our options,” PUC President Donald Vial said in a telephone interview, but he added: “I think we are going to be . . . confronting the FCC.”

The FCC last week approved a request by New York state to delay implementation of the deregulation order, Vial noted.

Vial charged that the FCC’s zeal for deregulation had led it to turn over the inside telephone wiring to customers without adequately considering “all the impacts” on them. “We are not going to allow the telephone companies to profit on the basis of bungling by the FCC,” he said.

For example, he said, if a customer has equipment trouble and reports it to the local phone company, the company now sends out a worker to determine the source of trouble by opening the sealed “protector” box where a home’s wire meets the phone company’s outside line.

Under the FCC order, he said, there will still be no specific charge levied for that inspection. But if the trouble proves to be inside the home, the customer will have a choice: make the repair himself, hire a firm to make the repair, or pay the phone company to do it.

If the FCC intended to create a competitive marketplace for making the repairs, Vial said, it stacked the cards heavily in favor of the phone companies. After all, he explained, the cost of sending a phone company worker to a customer’s home will continue to be paid by all rate-payers--a subsidy not received by competing repairers.

In addition, he said, the phone companies have been using their billing envelopes to ask customers to sign up for new monthly maintenance plans they will offer effective Jan. 1--another advantage not enjoyed by competitors in the fledgling market.

Finally, Vial said, replacing the protector boxes with a more sophisticated connection device accessible to any repairer would cost an estimated $1 billion.

“It’s a terrible mess,” he concluded.

Under the FCC order, whatever profit the companies make from repairing inside wires will benefit their shareholders. The PUC should seek to insure that whatever revenues are generated offset the cost of making repairs, thus holding down rates, Vial said.

Initially, the California commission agreed to the FCC order, although it bridled over what the commissioners considered an infringement of their regulatory domain. Last month, after a protest was filed by the San Francisco-based consumer group Toward Utility Rate Normalization, the PUC ordered its staff to review the implications of the order.

On Monday, TURN urged the PUC to challenge the FCC directly to withdraw the deregulation order.

Besides Vial, PUC Commissioner Stanley W. Hulett has expressed concern over the impending deregulation. Three votes are needed for approval; one seat on the five-member commission is vacant.

“We think it’s going to create some havoc in the marketplace, particularly with the residential consumer,” Hulett told the Associated Press Monday. “The basic question is: Is there going to be a major new competitive industry formed here? Is the consumer going to be served well by all this?”

Pacific Bell and General Telephone are both offering their customers the maintenance service contracts--for 50 cents a month for Pacific’s customers and 95 cents for General’s--if they wish to have the companies maintain the inside lines after Jan. 1. If the customer chooses not to take the service contract, the companies will offer to make the repair for a one-time charge--$65 for Pacific Bell and $85 for General.

The contracts do not cover anything but the wire running from the protector box to the inside jacks into which telephones are plugged. These wires need servicing on an average of once every 12 to 15 years, Vial said.

Telephones, computer modems, answering machines and other inside equipment are not covered under the monthly maintenance plans.