PUC Proposes Rules to Boost State’s Phone Competition : Telecom: The broad deregulation plan meets with immediate opposition from most of the parties involved.
Aiming to speed the start of competition in local telephone service in California, the Public Utilities Commission on Wednesday issued interim rules that will bring such competition to most of the state by year-end.
The rules, part of a broad plan to deregulate the state’s telecommunications industry and thus bring greater choice and lower prices to consumers, met with immediate--if predictable--opposition from most of the parties involved, notably Pacific Bell.
Consumer groups and would-be competitors agreed that the PUC is off to a good start. But all of those involved contended, for varying reasons, that some provisions would stifle rather than encourage competition.
The proposal, which is expected to be made final in June, has its roots in the PUC’s 1993 commitment to open all of the state’s telecommunications markets to competition by Jan. 1, 1997. To date, the most important segment to see the entry of rivals has been that for so-called local long distance, or toll calls.
In that area, competitors of Pacific Bell and GTE California--mainly long-distance carriers such as MCI, AT&T; and Sprint--say they have been stymied by the PUC’s decision to require customers to first dial a five-digit code to route their calls to companies other than Pacific Bell and GTE.
In proposing interim rules for competition in the most basic of phone service--local calls--the PUC left several crucial issues unresolved. For example, the question of how much competitors would have to pay to use parts of the monopolies’ networks was not decided.
On another key issue--how to ensure that customers can keep their phone numbers if they switch from a monopoly carrier--the PUC ordered Pacific Bell and GTE to work with other companies to come up with a solution within a year.
Meanwhile, however, customers apparently could be charged a monthly fee to cover Pacific Bell’s or GTE’s costs of engineering the behind-the-scenes switching that would seamlessly shift calls to the appropriate carrier. It is too early to know how much that fee would be, but it would almost certainly be less than the $3 a month that Pacific Bell had earlier proposed charging customers who switched carriers.
Would-be rivals, including long-distance carriers and cable companies, maintain that a monthly fee would discourage customers from choosing an alternative carrier.
To ease customers’ minds, the PUC proposed consumer-protection rules designed to prevent abuses by new competitors. But consumer advocates and potential competitors sharply criticized a PUC decision to add a per-minute charge for completing local calls from one telephone company to another, noting that the provision would prevent carriers other than Pacific Bell or GTE from offering a flat rate for service.
The per-minute charge “would stifle competition rather than encourage it,” said Stephen Bowen, a spokesman for a coalition of cable and long-distance companies that want to enter the local market.
For its part, Pacific Bell reiterated that to achieve a truly level playing field, it should be allowed to offer long-distance service, a market from which it is barred by the consent decree that broke up the old Ma Bell monopoly and created regional phone companies.
The company also complained that it would be left to bear the burden of serving unprofitable residential customers.
“The market never will become competitive if some of the companies have a responsibility to provide service everywhere at the same price while others are free to pick and choose their customers,” said Lee Bauman, Pacific Bell vice president for local competition.
For now, the proposed rules cover only territories served by Pacific Bell and GTE. Local competition for small and mid-size phone companies will be addressed later, the agency said. Interested parties have until May 24 to comment.
