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AT&T Communications of California Inc. is accusing Pacific Bell Telephone Co. of overcharging for access to its local telephone infrastructure to keep competition at bay, according to suit filed Monday in U.S. District Court. 

The suit is a high-stakes dispute in the aftermath of the 1996 Telecommunications Act, a law Congress adopted to open monopolistic phone services to competitors to cut consumer costs. It allowed competitors to build their own infrastructure, buy phone time from their competitors to resell, or lease a competitor’s infrastructure to offer a competing phone service. 

AT&T, along with MCI Worldcom Network Services Inc., allege that San Francisco-based Pac Bell, which controls about 75 percent of California’s residential telephone market, is unlawfully making it too expensive to compete in an area that Congress required opened to competition. 

Pac Bell, a unit of San Antonio-based SBC Communications, the nation’s second-largest local phone company, said the lawsuit’s motive was an effort to thwart or stall Pac Bell’s entrance into California’s $16 billion annual long-distance market. AT&T, MCI and Sprint carry 80 percent of California long-distance phone service. 

“It’s clearly an effort by them to stall our entry,” said Bill Mashek, a Pac Bell spokesman.  

“The rates that we charge our competitors to use our network were set by the Public Utilities Commission here in San Francisco.” 

The suit came nearly a week after Pac Bell asked regulators to allow it to move into the state’s long-distance market. 

Regulators, using a carrot-and-stick-approach, said that Pac Bell could only sign up long-distance customers if it convinces state and federal officials that its local phone market is truly competitive. One provision is that competitors have access to phone lines and other technology to provide their services. 

The suit also contends that the state’s Public Utilities Commission has unlawfully allowed the alleged lofty prices for the competitors to use Pac Bell’s infrastructure.  

AT&T and MCI said that the PUC authorized Pac Bell to charge $1 billion in overhead costs to lease local telephone systems, a figure that is more than double what AT&T and MCI said is necessary. 

An AT&T vice president told The Associated Press that California’s local residential telephone market, which is virtually controlled by Pac Bell, could never be opened to competitors if the courts do not alter the pricing arrangements that the state Public Utilities Commission approved in 1999. AT&T said Pac Bell is authorized to charge more for AT&T to lease equipment than it could recover from residential customers. 

“We have no plans to enter the market ... if prices remain the same,” Rose Johnson, an AT&T vice president, said. “This is not a threat. This is a fact.” 

AT&T, a subsidiary of AT&T Co. of New York, is separately challenging the PUC’s approval of non-overhead costs of leasing the equipment from Pac Bell necessary to offer local phone service. The PUC is reviewing those costs. 

Commission spokesman Armando Rendon said regulators have not seen the suit and could not comment. 

AT&T’s Johnson acknowledged that she hoped the suit could thwart Pac Bell’s application into the long-distance arena until it reduces leasing prices. 

“If they’re allowed into the long distance marketplace while they have these conditions, they will very quickly monopolize,” Johnson said. 

On Wednesday, Pac Bell submitted a 3,000-page application with the PUC in a bid to provide long-distance service in California. The PUC said that it would not make a recommendation to federal regulators for at least two months.