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Assembly Passes Bill on Phone Regulation

July 08, 2002

You are right in calling AB 2958 a shameful outrage, but you glossed over another disturbing fact ("Pull In Phone Monopoly... ," editorial, July 1). When it came time for the Assembly to vote, only one member, Rod Pacheco (R-Riverside), wondered about the validity of a bill that is backed by SBC Communications--which, we found, underreported its net income by $2 billion between 1997 and 1999 alone (that translates to $350 million due to customers under profit-sharing)--and is opposed by numerous consumer groups throughout the state.

My office has opposed the bill because we think it is too expensive for telephone customers in this state to lose regulatory protection for essential services. But what also worries me is a lack of common sense and willingness to take a closer look at who will be helped or hurt by this proposed legislation.

Regina A. Birdsell

Director, Office of Ratepayer

Advocates, Calif. Public Utilities

Commission, San Francisco


Re your editorial: Consumers are not exposed by this bill to any rate-gouging because the text of the bill states: "In regulating telephone corporations under this section, the commission shall maintain its authority to regulate prices for all services subject to its jurisdiction and shall continue to have authority to move service between all pricing categories." This refutes any suggestion that the consumer would face any exposure to rate increases, unless the California PUC raised rates.

AB 2958 actually codifies a decision by the PUC in October 1998 in which commissioners, not the Legislature, voted to suspend both profit-sharing and the price adjustment formula, because they concluded, as have more than 35 other states, that they were counterproductive.

The chosen method to reconcile costs with rates is to lower the rates. This is the way previous commissioners have dealt with this matter, resulting in Californians having among the lowest basic telephone rates in the country.

AB 2958 would preserve the system that has served California well during the last 10 years. During the time this system has been in place, consumers have been the beneficiaries of a roll-out of new services, which have in fact added to the profit of Pacific Bell.

This was the agreement; it would have the opportunity to earn more if it provided more. The safeguard from its earning too much is the ability of the PUC to lower the rates.

The Chamber of Commerce, the Urban League, the Manufacturers Assn. and the California Small Business Assn., which all use telephones and pay for service, have endorsed AB 2958. Why? Because most people would rather have the certainty of lower rates and newer features, thus keeping their money in their pockets.

AB 2958 will give California consumers the assurance that they will continue to have high-quality service at just and reasonable rates.

Roderick D. Wright

Chair, Assembly Committee

on Utilities and Commerce


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