FCC to consider Pacific Bell’s request to provide long distance

By Anna Oberthur
Friday September 20, 2002

SAN FRANCISCO — The California Public Utilities Commission voted Thursday to forward SBC Pacific Bell’s request to enter the long distance market to the Federal Communications Commission, but found that Pac Bell does not comply with a state law designed to prevent anticompetitive behavior, Commission Jeff Brown said. 

The PUC said Pac Bell is in compliance with the federal Telecommunications Act of 1996. 

The findings will be sent to the FCC. Once Pac Bell forwards its request, the FCC will have 90 days to approve or deny it. 

Brown said because of the PUC’s conflicting findings — that it was in compliance federally and not for state law — the FCC could end up approving interstate long distance, while prohibiting the company from entering the market for calls within California. 

Pac Bell called the decision a victory. 

“We were very excited about the endorsement we received today that paves our way to offer long distance in California,” said Lora Watts, president of Pac Bell’s external affairs. 

But consumer advocates said the victory was a hollow one. 

“This is not the clean endorsement that SBC Pacific Bell would have liked,” said Regina Costa, telecommunications research director for the San-Francisco based watchdog group The Utility Reform Network. “The PUC is saying that if SBC Pacific Bell gets into long distance in California it will harm the competition here.” 

Pac Bell is the biggest service provider in California, and has spent four years trying to gain entrance into California’s $15 billion-a-year long distance market. 

Under the requirements of the Federal Telecommunications Act of 1996, the company first has to meet 14 requirements listed in the act. As of Thursday, Pac Bell had met 12. Brown said the two unmet requirements were minor. 

Watts said consumers will win if Pac Bell enters the long distance market — with lower rates sparked by a more competitive market, and with the convenience of having two bills in one. 

Consumer advocates worry that letting Pac Bell sell long distance only will cement its dominance in the state, not create cheaper rates or more options for consumers, Costa said. 

Brown said the PUC did not find Pac Bell in compliance with the state law because of cases where the company had been sued for using customer testimony to their advantage. They also could not find Pac Bell in compliance with the anticompetitive law because of the fact that as a virtually monopoly, the company would be able to take advantage of customer calls to pitch additional services.