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PacBell Gets OK to Offer Service That Rejects Anonymous Calls

June 22, 1998

Raising the stakes in the privacy battle over caller ID in California, state regulators have given Pacific Bell the green light to offer a service that allows customers to reject calls from someone who has blocked transmission of their phone number.

The California Public Utilities Commission voted unanimously to allow PacBell to offer "anonymous call rejection," or ACR, to customers. The service is designed to work with caller ID, which allows consumers to screen incoming calls using a phone or a small box with a digital display that shows the number, and sometimes the name, of the calling party.

The phones of ACR subscribers will automatically reject calls from someone who has blocked their own number from being displayed by caller ID. The rejected call will be directed to a recording that tells the caller they can get through if they unblock their phone line by pressing *82, or if they switch phones or place the call through an operator. Customers will not be charged for a rejected call.

The PUC ruling is part of an effort by consumer groups and regulators to balance the rights of caller and the party being called. Those rights came into sharp focus in the debate surrounding the introduction of caller ID in the state two years ago.

A dispute between phone company officials and regulators escalated when regulators required the companies to offer consumers the option of blocking their phone number all the time--known as complete blocking--or to block it on a call-by-call basis--known as select blocking.

"People are pretty passionate about ACR and complete blocking and select blocking," said Charles Carbone, a consumer advocate for the Utility Consumers Action Network. "I get people who call up and say, 'I consider complete blocking a critical issue and one that protects my privacy,' and from people who say, 'It's my right to know who's calling me and I don't want to take a call from someone who doesn't want to tell me who they are.' "

PacBell wants to offer ACR, which will become available in the next two months, to boost sales of its $6.50-a-month caller ID service, which has received a lukewarm reception because many privacy-conscious Californians want to protect their unlisted phone numbers.

The service has been a moneymaker in other states. PacBell plans to offer free ACR service until the end of the year. After that, it plans to charge 50 cents monthly for those with caller ID and $2 a month for those without.

At least 53% of Californians have signed up for complete blocking, diluting the effectiveness of caller ID. Only about 7.5% of PacBell's customers have caller ID, compared with about 25% of consumers nationwide. GTE has offered ACR to its California customers for about a year.

PacBell's parent company, San Antonio-based SBC Communications Inc., has been successful in selling caller ID to its customers in Texas, but it has been frustrated in efforts to sell the service in California.

PacBell's efforts to boost caller ID sales backfired when the PUC's Office of Ratepayer Advocates found that the company misled customers and violated state sales and privacy rules. At issue were scripts given to PacBell customer service representatives that required them to try to persuade customers to drop complete blocking from their menu of services.

In approving ACR last week, the commission ordered PacBell "to be neutral about caller ID on all public contacts and information resources regarding ACR." That was done to ensure that the company does not "push the service" on customers, said Armando Rendon, a PUC spokesman.

The commission's ruling also requires PacBell to insert notices in phone bills that advise customers of the new service and explain how it works. PacBell is also required during a two-year trial period to report monthly to the commission the number of subscribers to ACR, the number of complaints about the service and the number of rejected calls.

ACR is not yet widely available in the U.S., analysts say. Only about 5.7% of consumers nationwide have the service, according to a survey by the Yankee Group, a Boston-based market research firm. And only a small percentage of consumers say they would sign up for it if it were available, said Fred Voit, a Yankee Group analyst.

According to the group's survey, about 9.8% of PacBell customers said they would sign up for the service if they could. While that appears to be a low number, it still represents a significant revenue opportunity, Voit said.

"Privacy-conscious people such as Californians will embrace this product," Voit said. "It is an excellent opportunity to send a message to people calling you that, 'If you call me and block your number, I won't accept the call.' "

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