PUC Rejects PacBell’s Bid to Join Long-Distance Market

Pacific Bell, the largest phone company in California, hasn’t fully opened its local market to competition and should be prevented from offering long-distance service to its California customers for now, state regulators said Thursday.

The California Public Utilities Commission found that Pacific Bell, owned by SBC Communications Inc., had failed to meet 10 of the 14 market-opening steps required by law before being allowed into long-distance. The agency directed PacBell to refile its application by June 1.

The commission told PacBell “how to open its local market to competitors in exchange for a quick entry ticket to the coveted long-distance market,” Managing Commissioner Jessie Knight Jr. said in a statement.

The 1996 Telecommunications Act requires the Baby Bells to prove to the Federal Communications Commission that they’ve opened their local market and are facing real competition before being allowed to offer long-distance service in their region. The agency must take into account the recommendations of the state regulators and the Justice Department.

California regulators are considered by analysts to be among the toughest in the country, and their opinion will carry substantial weight at the FCC.

“It’s good news for Pacific Bell in the sense they’ve given us a very clear blueprint for what we need to do” to get into long-distance, said Bill Mashek, a PacBell spokesman.

MCI WorldCom Inc. and other local phone rivals are opposing Pacific Bell’s efforts to break into the long-distance market on the grounds that it hasn’t met the requirements of the law.

Pacific Bell “has fought competitors, ignored its legal obligations and tried to lobby and litigate its way around the act’s requirements,” MCI WorldCom spokesman Richard Severy said. “Hopefully, PacBell now realizes those tactics don’t work.”

Shares of San Antonio-based SBC fell 44 cents to close at $49.19 on the New York Stock Exchange.