Higher Phone Rates Loom : Utilities: PUC gets recommendations to raise basic monthly residential charges anywhere from 20% to 55% next year. But regional long-distance charges would drop.

In what is shaping up as the first major overhaul of California telephone rates in nearly a decade, the state Public Utilities Commission on Friday got formal recommendations for raising basic monthly residential rates by anywhere from 20% to 55% on Jan. 1.

The two recommendations differ widely on basic service fees but agree that regional long-distance calling should be opened to such national powerhouses as American Telephone & Telegraph, MCI and Sprint, a move expected to drive down the cost of such “local long-distance” calls by 45%.

The thrust of the recommendations was not unexpected. Like many other states, California has been moving toward opening phone service to increased competition and reducing the residential-service subsidy provided by long-distance callers.

But the two recommendations provide specifics. One proposal, from the PUC staff, calls for the basic monthly flat-rate fee for Pacific Bell residential customers to rise to $10 from $8.35. GTE subscribers now paying $11.85 a month would see those fees rise about 18% to $14.

Residential rates could rise even higher if the PUC decides to adopt an alternative recommendation on the table. In a rare display of dissent, PUC Commissioner Norman Shumway on Friday released his own rate proposal calling for Pacific Bell’s monthly charges to jump 55%, to $13 and GTE’s to rise 50% to $17.80.

Shumway said his recommendations are aimed at moving basic phone rates closer to the true cost of providing those services. At least one other commissioner, Patricia Eckert, said late Friday that she agrees with Shumway’s view.

If the PUC adopts either of the recommendations--and it is sure to adopt some plan, even if not one of these--the big winners are likely to be business customers, who make most of the local long-distance calls. Such calls are those between Los Angeles and Riverside, for example.

Basic charges for residential customers, which have risen little in 20 years when inflation is taken into account, would jump sharply.

The full commission, which has four members and one vacancy, will hold public hearings on the whole issue next month in Los Angeles and is expected to vote on the plans before the end of the year.

Because calling patterns are so complex, it is hard to gauge the effect of the proposed new rate structure on the average residential bill. For consumers making many regional calls exceeding 12 or 16 miles (depending on the plan adopted), the proposed decline in these rates would more than offset any rise in the monthly basic fees.

But some consumer groups charge that for as many as half of state residents, the net effect will be higher monthly phone bills.

“All these proposals favor businesses over residential customers,” said Audrie Krause, executive director of Toward Utility Rate Normalization, a San Francisco utility consumer group. “We still maintain that no rate increases are needed and that basic service already more than pays for itself.”

Although widely expected, release of the two thick proposals late Friday afternoon left phone company officials scrambling to fashion a response. Both Pacific Bell and GTE said they need more time to study the material.

The long-distance carriers were pleased with the general outcome.

“Sprint is obviously delighted about the deregulation that is about to take place in California, because California is a crucial market for us,” said Cardi Prinzi, vice president for Sprint’s Western Services Business Group in San Mateo.

The new rate proposals are the result of a campaign by utility regulators to allow AT&T;, MCI, Sprint and 90 other companies to offer the local long-distance phone service now provided exclusively by Pacific Bell and GTE.

While agreeing that more competition is needed, GTE and Pacific Bell have repeatedly said that the resulting lower local long-distance rates would reduce one of the major sources of revenue used to subsidize the estimated $24 a month they say it costs to provide phone service to every home in California.

Both companies asked for increases in basic monthly rates to offset that loss, and PUC commissioners have repeatedly said the rates would be rebalanced once the new competition began. The only question for the last two years has been, “How much?”

However, Shumway, a former Republican congressman from Stockton, seized the rate question to call for a more profound overhaul of the state’s telephone service to keep pace with the growing movement to deregulate and introduce competition into what has been a monopoly for much of the last century.

He said his rate increase plan is aimed at helping the local phone companies handle the effects of the new competition and should be done with a single, large hike. “Rather than prolong the agony, we should just get it over with and get on with modernizing our phone system,” Shumway said.

How Phone Rates Might Change

If state regulators adopt Friday’s staff recommendation, basic monthly residential service will rise about 20%. . .

Pacific Bell Now: $8.35 In 1994: $10.00 GTE Now: $11.85 In 1994: $14.00 . . .While charges for in-state long-distance calling will drop an average of 43%.

Pacific Bell Now: 93 cents Then: 55 cents GTE Now: 93 cents In 1994: 50 cents * Typical four-minute daytime call execeding 16 miles.

Source: California Public Utilities Commission