PUC to Fight Order for Phone Wire Repair Fee

The California Public Utilities Commission decided Wednesday to challenge a federal order that would require consumers, rather than telephone companies, to bear financial responsibility for repairs to telephone wiring inside homes.

The commissioners voted to ask the Federal Communications Commission to delay implementation of its inside-wiring order, which will take effect Jan. 1. If necessary, the PUC will seek federal court action, commission President Donald Vial said.

In its action, the PUC did not challenge the FCC’s decision to have consumers pay directly for the maintenance of inside wiring after Jan. 1. But it ordered its staff to make sure that profits from the charges are used to lower phone rates rather than increase company earnings.

Repair and maintenance of the wires have always been the responsibility of local phone companies, whose costs have been covered in the monthly service bills paid by all customers rather than through the special charges due to begin next month.

The commission instructed its staff to reduce utility rates “as soon as possible” if the companies are found to be profiting from the deregulated maintenance service. In this way, Vial explained, the commission is trying to assure utility customers that if they choose to sign up for the maintenance plans currently offered by Pacific Bell and General Telephone, the result will be lower rates for customers.

Vial added that the phone companies have not expressed any great enthusiasm for the FCC order.

“It is not a business they sought to get into,” he said.

The chief reason the FCC cited earlier this year for its inside-wiring order was to let repair companies compete with phone companies in repairing and maintaining the wiring--the theory being that competition would drive down costs. But, Vial said, it will cost consumers $1.5 billion to convert “protector” boxes, which now can be opened only by the phone companies, to enable competitors to determine the source of a malfunction, whether inside the building or outside.

“We cannot permit this kind of cost to be imposed on ratepayers simply because the FCC wants to create entrepreneurial opportunities for services that can be provided more cost effectively by the network,” Vial said.

In its action, the PUC rejected a petition filed by the San Francisco-based consumer coalition Toward Utility Rate Normalization, or TURN, which proposed that the commission take immediate court action to block the shift in ownership of the wires. TURN said that a cease-and-desist order was necessary to protect consumers and that if repair costs are no longer covered by the basic monthly service charge, rates should drop.

But the commission decided that seeking court action to scrap the entire federal order would “create more confusion” and possibly harm consumers if the PUC’s court bid failed, Vial said.

“We don’t want to add to the problems,” Vial said. “We’re doing what we think we can do: prevent profiteering and take whatever the utility gets as revenues and use that to reduce rates.”

Pacific Bell is offering a maintenance plan that adds 50 cents to its residential customers’ monthly bills. General Telephone’s similar option costs its customers 95 cents monthly.

Both companies will also provide inside-wiring repairs for a one-time charge to customers who choose not to sign up for the maintenance plans. Pacific charges from $65 to $90 for the work, and General charges a minimum of $85 and an extra $60 an hour after the first hour.

The commission estimates that inside wiring requires repair once in 12 to 15 years.

Outside firms are also offering maintenance plans and one-time repair services--some of them far more comprehensive than those of the phone companies. One of these, the Extension Connection, based in San Anselmo, Calif., complained to the PUC last month that the federal deregulation order gives an unfair advantage to the phone companies.