A federal court ruled Wednesday in Washington that the California Public Utilities Commission can retain control of money that Pacific Bell and General Telephone collect from their customers for repairing telephone wiring inside homes and small businesses.
The action by the U.S. Court of Appeals represented at least a temporary victory for the state regulatory body, which has sought to ensure that local phone companies do not profit from a Federal Communications Commission ruling that responsibility for the so-called inside wiring be turned over to phone customers.
The FCC order, which otherwise took effect today, allows phone companies to charge for repairs on the wiring extending from a connection box outside the premises to the jacks in which phones are plugged. But the ruling gives the PUC authority over any revenue generated from the service, PUC lawyer Jim Quinn told United Press International in San Francisco.
Slash Rates by $64 Million
PUC officials estimate that Pacific Bell would have to slash rates by $64 million annually to offset revenues from the inside wiring charge, he said.
Until today, the inside wiring has always been the responsibility of the telephone company, repaired as needed at no extra charge to the customer. Quinn said he filed an emergency request with the court early Wednesday, asking that the money that phone companies collect for inside repairs come under PUC jurisdiction.
The court agreed, ruling that the money should temporarily be considered subject to commission regulation. The stay is temporary, however, until a final ruling is issued, possibly next week, Quinn said.
The PUC and the state attorney general have filed petitions questioning the legality of the FCC order, which applies nationwide, seeking a review and modifications. But the federal agency has not yet responded, leading to the court move, Quinn said.
Quinn said the commission hopes that the FCC order will eventually be reversed entirely.
Pacific Bell is now offering customers the option of paying 50 cents a month for residential lines or $1 a month for business lines as an insurance policy. General Telephone offers a similar service for 95 cents for residential customers and $1.95 per line for small businesses.
A customer without this "insurance" has the option of personally fixing the wiring, having it fixed by some other repair service or paying $65 to Pacific or $85 to General to fix it.
Dennis Love, president of the Extension Connection, based in the Marin County town of San Anselmo, said his firm offers a 25-cent monthly line charge for such coverage. He said his company, whose stock began trading publicly in the over-the-counter market this week, expects to expand statewide this year and, eventually, nationally. Other such companies are expected to develop in response to the new national market.