Plans Would Reduce Price of Regional Calls : Utilities: The PUC will consider today two proposals opening the market to competition.

When it comes to telephone rates, this burgeoning edge city might as well be the other side of nowhere, the distant outback, the boonies. Sure, it’s just one rise in the freeway north of Los Angeles proper, but it costs as much to call there as to reach out all the way to New York City.

Blame it on a lack of competition.

Ten years ago, a federal judge broke up the telephone company monopoly to create competition and lower rates in what is now the $55-billion long-distance market. Since then, rates have dropped by as much as half, with companies such as MCI, Sprint and AT&T; wrangling for customers.

But the $90-billion local market, which includes so-called “local long-distance”--including calls from Los Angeles to Santa Clarita, from Van Nuys to Long Beach, from San Diego to Oceanside--has remained protected from competitive pressures. The Marines at Camp Pendleton, for instance, drop a bundle when they call 45 miles down the coast to their Navy buddies at Miramar Naval Air Station near San Diego.

Now, however, that is expected to change, to the delight of business owners and anyone else who makes many regional calls. The California Public Utilities Commission will meet today in San Francisco to consider two proposals for opening the local long-distance market to competition. The commission has vowed to revamp those rates by the end of the year, whether or not they act on the specific proposals before them today.

Santa Clarita businessman Gary Johnson can hardly contain himself.

The local long-distance calls make up most of his $300 or $400 monthly phone bill and they “drive me nuts,” said Johnson, whose company provides computer services. “They keep going up. MCI or AT&T; will call and offer me these ‘great savings’ that only add up to a buck or two and nobody is saving me money on my 818s and 714s.”

Pacific Bell charges 28 cents for the first minute of a call from Santa Clarita to Los Angeles and 19 cents for subsequent minutes. Sprint and MCI charge 24 cents per minute for calls from Santa Clarita to New York.

Representatives of Pac Bell and GTE California, the two companies that provide local phone service in California, say they use the relatively high revenues from zone calls to keep the cost of basic monthly telephone service down.

The state is divided into 11 zones known as Local Access and Transport Areas. Calls made between places within a zone that are more than 12 miles away are subject to the toll charges. Los Angeles is part of the biggest zone in the state, a zone that includes Bridgeport on the eastern Sierra, extends down to San Clemente on the south and eastward to Needles.

Within that zone, calls can cost as much as 40 cents per minute, far more than calls to almost anywhere in the U.S. outside the zone.

“We don’t like it and we know our customers certainly don’t like it,” Pacific Bell spokeswoman Kate Flynn said of the higher local toll charges. But without them, residential service fees would be about $24 per month in order for the company to recover its costs, she said.

Under the two proposals before the five-member public utilities commission today, more than 90 long-distance carriers would be allowed to offer the local long-distance service beginning Jan. 1. One proposal covers calls to places more than 12 miles away and the other covers those farther than 16 miles.

In exchange, however, the local phone companies would be allowed to hike their basic fees. One proposal, which is contained in a 600-page decision by an administrative law judge who examined the fee structures, would raise the basic Pacific Bell residential fee from $8.35 per month to about $10. The GTE monthly fee would rise from $11.85 to $14.

The other proposal, by Commissioner Norman Shumway, would increase the basic Pacific Bell rate to $13 and the GTE rate to $17.80.

The commission does not expect the proposed rate changes to significantly change the revenue for Pacific Bell or GTE California, but individual bills could increase or decrease noticeably depending upon the type and number of calls a customer makes.

The San Francisco-based Toward Utility Rate Normalization, a utility watchdog group, opposes the rate restructuring. “We see this as an opportunistic move by the telephone companies to jack up their rates,” said TURN executive director Audrie Krause.

But those who make many regional calls will definitely come out ahead, phone company and utilities commission spokesmen agree. Ed Goldbaum’s Burbank-based Area Phone Bank conducts 100,000 marketing surveys a year all over the country, and he estimates that his local toll charges could drop as much as 40% with rate restructuring, which he said would allow him to lower his rates and hire more people.

As it is now, it is cheaper for Goldbaum to conduct a marketing survey for a customer in New York City than it is to do the same survey in the South Bay, he said.

For example, Pacific Bell charges 37 cents for the first minute of a daytime call from Burbank to Riverside and 28 cents for subsequent minutes. Calling Washington, D.C., or Anchorage, Alaska, or Portland, Maine, on MCI, however, costs only 25 cents a minute. It’s a penny less to call Butte, Mont.

“It’s going to be terrific, just terrific,” Goldbaum said.

But Peter A. Howley, chairman and chief executive officer of Centex Telemanagement of San Francisco, said rate restructuring will present small and medium businesses “with a lot of choices . . . and a lot of confusion and a lot of people calling them with the latest, cheapest service ever.

“The competition is going to be great for Pacific Bell and the others to do a better job and offer new services . . . and lower prices,” he said.

Phone Rates

Comparison of California residential day rate for middle- and long-distance calls from Santa Clarita Santa Clarita to Los Angeles: 28 cents for the first minute, 19 cents each additional minute Santa Clarita to Chicago: 23 cents for the first minute Santa Clarita to New York City: 24 cents for the first minute Note: Amounts listed for long-distance carriers are for residential day rates, using basic calling plans. Savings options for long-distance carrier can reduce per-call costs by about 20%, and evening calls are cheaper still.