PUC Seeking to Eliminate Most Barriers : Telecommunications: Cutting back on regulations would open the state to the development of myriad new services.

The California Public Utilities Commission late Wednesday proposed throwing open the state’s monopolistic local telephone markets to competition within three years as part of a sweeping strategy to thrust the state aggressively into the Information Age.

“This report lays out a strategy for taking advantage of new telecommunications technology and bringing that information highway into the classrooms and homes of California,” Gov. Pete Wilson said of the 86-page PUC report outlining the agency’s proposals.

By opening markets to competition, PUC Commissioner P. Gregory Conlon said, California would stimulate private-sector development of new telecommunications services, potentially creating thousands of jobs.

As these services come on line, students in Fresno could learn calculus from teachers in Los Angeles via two-way video links, employees could save gasoline by telecommuting, heart specialists could care for patients hundreds of miles away, and families could watch favorite movies and television shows whenever they wanted.

Within three years, the PUC proposes to open all California telecommunications markets to all competitors and find new ways to assure universal access to telecommunications services. To speed up the process, the agency also plans in 1994 to cut back on its regulation of the industry.

“We’re encouraged by it,” said Rex Mitchell, regulatory vice president at Pacific Bell, the state’s biggest phone company. He said the company was heartened at the prospect of reduced regulation and, potentially, new sources of funding for universal access.

In his State of the State address in January, Wilson outlined a 15-step plan to improve recession-weakened California’s stature as a global competitor. In addition to urging legislative reform of workers’ compensation and corporate tax laws, he charged the PUC with devising a strategy to take advantage of fiber optics, a relatively new technology that improves the speed and quality of telecommunications.

California’s plan to substitute competition for the monopolies enjoyed by Pacific Bell and GTE also means the state would be swimming in the direction of the tide. Across the country, companies are challenging regulatory barriers and in many cases circumventing them in the scramble to provide a range of telecommunications services almost unthinkable a generation ago.

Already, for example, a number of cable TV companies are hoping to deliver phone service, and Ameritech Corp., a Bell phone company operating in the Midwest, is seeking permission to enter the long-distance business and have more flexibility in setting prices for services in exchange for opening up its phone network to competition. Rochester Telephone Co. has a proposal before New York state regulators that would allow local phone competition similar to that available for long-distance calling.

But Conlon said he believes that California’s proposal is the first of its kind to come from a state regulatory body, and he said although changes in federal telecommunications rules would be helpful, they aren’t crucial. The California blueprint grew out of three hearings held over the summer, where the PUC heard from phone companies, would-be competitors and consumer groups.

“I think (consumers) are the winners,” Conlon said. “The presumption is that companies would offer more services at lower cost.”

He noted that the PUC will have to grapple with many issues as it holds hearings on the proposed strategy. A key concern will be how to ensure that existing and new services will be universally available, even in California’s remote forest towns, deserts, farmlands and among the poor.

To help the state’s schools and libraries benefit from advanced telecommunications, the commissioners urged the establishment of a grant program to provide as much as $150 million annually for planning, training and equipment.

Instituting the proposals, the PUC noted, will require the cooperation of regulators, legislators, business and consumers.

Some of the proposals, if passed by the PUC, could require legislative approval.