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Just Who Is the Bully and Who Is Struggling in a Changing Telecommunications Industry?

July 02, 1989

The Times' "Bully on the Line?" story contained some oversights and unfair associations.

First, there is the implication that as regulated monopolies, GTE California and Pacific Bell have inherent advantages over smaller competitors.

We, indeed, each have franchised serving areas, with an in-place customer base. However, unlike new competitors, we must provide service to all customers in our service areas. We cannot selectively "cherry pick."

Secondly, unlike some of our competitors, GTE has not had to refund money to customers for overzealous marketing practices or "competitive abuses."

More importantly, the story implies that GTE and Pacific Bell are railing for a new means of "deregulation" to loosen Public Utilities Commission controls over local service and to cross-subsidize risky new services.

GTE and Pacific Bell have given the PUC separate plans for a new regulatory process. The plans differ substantially. However, there is one commonality:

We're not asking for deregulation. Just regulation that works. The current regulatory system was developed when local phone companies had a monopoly on most customer services. We're no longer in the long-distance business. Nor are we allowed to sell or lease phones and related equipment.

We simply want a regulatory method that is more efficient, and one that gives us pricing flexibility to meet competitive and customer demands.

Contrary to the implication of your story, GTE's plan requires that our shareholders bear all the financial burden for new services. At the same time, customers and shareholders would share earnings above PUC-set levels.

Under GTE's plan, basic service rates would remain reasonable and predictable. And a new regulatory method could save taxpayers millions of dollars and open the way for a vast offering of new telecommunications services.

LARRY COX

Thousand Oaks

The writer is the state manager of public affairs for GTE California.

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