Court Backs Phone Firms on Wiring Fees

A federal appellate court ruled Monday that the California Public Utilities Commission cannot stop Pacific Bell and General Telephone from profiting by charging customers for repairing telephone wires inside homes and businesses.

The ruling by the U.S. Court of Appeals in Washington reversed the court’s temporary order Wednesday that would have allowed the commission to consider the repair fees in setting future phone rates.

Under a Federal Communications Commission order, the cost of maintaining so-called inside wiring was shifted last week from the phone companies to their customers.

The court of appeals decision does not end the dispute, said James Quinn, a commission lawyer. The court has yet to rule on a commission petition that argues that the FCC overstepped its authority in deregulating wiring maintenance, Quinn said. In addition, the commission has asked the FCC to rehear the inside wiring issue.

“We think it’s a very important matter here, a precedent in which a function we think is definitely a part of the state regulatory field is being preempted by the federal government,” Quinn said.

Despite the appellate court action, Quinn said, the commission still requires Pacific Bell and General Telephone to set up separate accounts for revenue from repairing inside wiring. That money is to be refunded if hearings later this year determine that the charges are excessive.

Pacific Bell offers customers the option of paying 50 cents a month for each residential line or $1 a month for a single business line as an insurance policy against faulty inside wiring. General Telephone is offering a similar service for 95 cents for residential customers and $1.95 per line for small businesses.

Each company will make repairs for customers who do not pay the optional monthly fees. Pacific Bell charges $65 per service call and General Telephone charges $85 for those customers.

The commission estimated that inside wiring requires repair every 12 to 15 years.

Until the FCC deregulated wiring maintenance, phone companies took care of inside wiring at no extra charge to the customer. The commission, prodded by the San Francisco-based consumer coalition Toward Utility Rate Normalization, maintains that if the companies no longer make wiring repairs without charge, other rates should be reduced proportionately.

The commission estimated that the FCC ruling will save Pacific Bell $64 million a year, Quinn said.