Van de Kamp Assails Phone Wiring Deregulation

The Federal Communications Commission’s decision to deregulate the cost of repairs for interior telephone wiring would actually create a monopoly, California Atty. Gen. John K. Van de Kamp said Wednesday.

“Deregulation will cost Californians millions in additional repair costs,” Van de Kamp said, “and it will do nothing to improve upon the repair service they now receive.”

The FCC decision to deregulate telephone repair costs is scheduled to take effect Jan. 1. Van de Kamp filed a friend-of-the-court brief supporting an earlier petition to the FCC from the California Public Utilities Commission asking the federal agency to delay deregulation pending legal review.

“The FCC has characterized this deregulation as a boon to California on the grounds that free competition would result in lower costs to the consumer,” the attorney general said. “Such a characterization is directly contrary to a study by the PUC this year that concluded deregulation would have the effect of establishing a virtual monopoly for Pacific Bell and General Telephone and would do nothing to open the market up to other companies.”

Van de Kamp also pointed out that a U.S. Supreme Court ruling in Louisiana declared in an almost identical case that the FCC had no jurisdiction to interfere with state regulation of repair rates. “We believe that the same decision that prevented the FCC from intervening in Louisiana should be applied to California,” he said.

California consumers have already received solicitations from Pacific Bell and General Telephone, the two companies that dominate the phone market in California. Once deregulation goes into effect, telephone customers have a choice: They can pay a monthly repair service fee--the rate for General Telephone is 95 cents a month per line, $1.95 for businesses; Pacific Bell’s rate is 50 cents a month per line, $1 for businesses--and then pay nothing in the event repairs are needed. Or, they can waive the monthly fee, in which case they will have to pay a minimum fee of $85 for General Telephone or $65 for Pacific Bell to have the utilities repairs any inside lines.

Because the PUC would no longer be regulating fees, the cost could easily run higher, Van de Kamp said.

Another factor noted by the attorney general is a $65-to-$85 “inspection charge.” This is the fee telephone users will have to pay to be eligible to make the monthly payment if they do not choose to do so during the first few months of 1987 (the only time the monthly payment option will be available free of charge).

The inspection fee encourages people to sign up for the monthly fee and thus reduces the market for outside competition, Van de Kamp said.