Assembly OKs PacBell Bid for Long-Distance Service in State

Despite opposition from such unlikely bedfellows as AT&T; and major consumer groups, the Assembly voted 60 to 1 Thursday to let Pacific Bell offer long-distance telephone service within California.

The measure, which now goes to the Senate, was sold as hastening free competition in the phone business and favoring California jobs by empowering a home state company to compete against such “national companies” as long-distance powers AT&T;, MCI and Sprint.

“It puts the state of California on the side of open competition,” said the bill’s sponsor, Assemblyman Jim Costa (D-Fresno).

But critics, including the California Public Utilities Commission, called it a special-interest bill that would run afoul of federal directives and enable Pacific Bell to grab long-distance business before it faced real local competition.

“It’s an attempt by a monopoly to position itself to remain a monopoly,” said Audrie Krause, executive director of Toward Utility Rate Normalization, a consumer watchdog group.

Even if the bill is adopted, nothing will change immediately. The bill itself says Pacific Bell would not be able to offer in-state long-distance service until federal action permitted it. In fact, Congress is working on legislation to open up the long-distance and local phone markets to competition nationwide.

At issue is whether Pacific Bell can offer phone service between California’s 10 phone regions. The 1982 court-ordered breakup of AT&T; barred PacBell from entering the long-distance business.

TURN, like the long-distance firms, notes that PacBell still controls the switches that give access to long-distance lines. Thus, to critics, PacBell would be positioned to undermine competitors.