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California Regulators Decree Monopoly End, But Timing in Doubt

July 24, 1995

SAN FRANCISCO (AP) _ California regulators ordered an end to local telephone monopolies Monday, but it was unclear how long residents would have to wait for full competition.

Formally, rival providers with their own wires and switches can seek to offer local service next January under the order by the Public Utilities Commission. Two months later, long-distance carriers can buy local service from Pacific Bell or GTE-California and offer it for resale.

Practically, the timetable will be longer by at least a year, in the view of almost everyone involved. The notable exception is Pacific Bell, which wants compensation for its expected losses.

``I think competition will start immediately, in a big way, on Jan. 1 ... with our biggest customers,″ John Gueldner, Pacific Bell’s vice president for regulatory affairs, told reporters. After March 1, he said, ``I think that full competition will be in place.″

The state’s largest phone company, with 10 million customers, wants to be compensated by competitors for loss of its monopoly in much of California, the biggest single telephone market in the country.

Pacific Bell also wants the utility commission to repeal some restrictions on its rates. The commission has promised an accelerated review and decision by year-end.

The commission opened local toll call service to competition at the start of this year. Pacific Bell and GTE-California, the dominant local carriers, hope to enter the long-distance market by 1997 but need federal as well as state approval.

Monday’s vote was 4-0. All the PUC members were appointed by Gov. Pete Wilson, who called for phone industry competition in 1993.

While commissioners hailed their latest step toward a free market, some would-be competitors and a consumer group warned of pitfalls.

By sometime in 1997, 70 percent of Californians will have a chance to buy competitive local service if PUC members ``don’t cave in to obvious pressure″ from the current monopolies, said Alan J. Gardner of the California Cable Television Association.

He said cable companies planned to spend $8 billion on California telephone networks in the next two or three years.

But Gardner said Pacific Bell and GTE have enormous influence because linkage with their networks is essential before cable companies can offer phone service.

The commission must also decide how much AT&T and other long-distance carriers should pay for phone services they will resell. Pacific Bell says it spends about $25 for basic service that costs residential customers $11.35 a month.

Another unresolved issue is the ability of customers to keep their phone numbers when they change companies.

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