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THE CUTTING EDGE | HEARD ON THE BEAT

December 16, 1996|KAREN KAPLAN

MCI Hangs Up on PacBell: Long-distance telephone companies and others that are trying to get a piece of the newly opened market for local phone service have often complained that incumbents such as Pacific Bell and GTE are trying to thwart implementation of the Telecommunications Act of 1996, which introduced competition to the historically monopolistic market.

Up to now, most of those complaints have centered on the wholesale rates that newcomers are charged for service they will resell to customers under their own brand names: New entrants want wholesale prices much lower than what Baby Bells will happily give them.

But now MCI Communications Corp. has a new gripe. On Wednesday, the Washington-based long-distance company filed a 30-page complaint with the California Public Utilities Commission charging that Pacific Bell has waged a "calculated campaign of delay and discrimination."

MCI alleges that customers who signed up for its local Home Phone Service have been told by PacBell agents that MCI has no authority to offer service in California or that the service won't be available until Jan. 1; that customers should continue to pay PacBell because it owns the local network; that MCI's local customers must also sign up for the company's long-distance plans; and that MCI's local service isn't as reliable as PacBell's.

"We've been on three-way conference calls with our customers and with a PacBell representative, and they've made some comments we consider highly discriminatory," said Julie Levine, MCI's director of local service marketing. "They've made comments like: 'Oh, MCI local service. I'm getting shivers up and down my spine.' "

The volume of complaints has been double what MCI expected, Levine said. About 20 customers lost their dial tones altogether after PacBell disconnected them from their service without installing MCI's service in its place, she said.

PacBell executives acknowledged there might be isolated problems as the company transitions from a monopoly to a competitive player. But they forcefully denied the MCI charges.

"We instruct our employees not to say things like that," said Lee Bauman, PacBell's vice president for local competition. "I know there's no widespread occurrence of employees saying anything negative about MCI."

Instead, Bauman said MCI filed the complaint in order to generate sympathy from the PUC one week before the commission decides on final prices for a variety of things, including wholesale service and network interconnection charges. MCI is also trying to smear PacBell in order to keep the Baby Bell out of the lucrative long-distance market, Bauman said, where MCI is the No. 2 player.

Sorting out the accusations could be a long process because much of the dispute centers on factual issues that need to be examined in evidentiary hearings, said Karen Jones, a senior policy analyst in the PUC's telecommunications division in San Francisco. If the allegations prove true, Jones said, Pacific Bell could be hit with fines. The only relief MCI is seeking is that PacBell take a specific series of steps to fix the problems, Levine said.

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