PUC Votes 2nd Pacific Bell Rate Cut This Month; GTE Gets Hike

The California Public Utilities Commission voted Monday to trim Pacific Bell’s local phone rates by another 4.1%, effective New Year’s Day. Much of the effect of the decision will be short-lived, however.

Coupled with another PUC reduction ordered Dec. 9, the average residential bill of $26will drop by $3.54 from Jan. 1 through April 30. In May, however, some phone charges will go back up. The result: For the last eight months of 1989, the average monthly bill will be $1.08 less than it is today.

Pacific Bell said the reductions will appear on bills in the form of credits that will vary according to each customer’s use of local telephone services.

For Pacific Bell, the credits will reduce the company’s annual revenue by $726 million. Thecommission said the cut is in keeping with the company’s lower business costs as a result of low inflation and reduced expenses to pay for debt.

The PUC also adjusted the rates of GTE California, the state’s second-largest phone company. The average monthly bill, now $26, will be $1.62 higher during the first four months of 1989. As of May 1, however, the average monthly bill will be nine cents higher than the current level.

In other action, the commission took a small but pioneering step in loosening its regulatory hold on American Telephone & Telegraph’s toll call service within the state. It gave AT&T; increased flexibility in setting its own rates in order to meet competitors’ prices, particularly when they are lower than AT&T;’s. AT&T; is the only long-distance telephone company that must obtain PUC approval before changing its prices, a process that can take months.

The commission said it would monitor AT&T;’s pricing and give it yet more flexibility in rate-setting if consumers appear to benefit.