This week, Pacific Bell Telephone Co. is expected to file a report with California’s Public Utilities Commission addressing concerns raised by rivals about its bid to offer long-distance service in the state. It’s the latest volley in an ongoing telecommunications battle.
An approval would bring deregulation full circle in the state,and offer a new option for businesses in Orange County and elsewhere. Pacific Bell, a unit of SBC Communications Inc., could offer everything from local phone service to data center operations here in OC.
Pacific Bell, which first applied to offer long-distance in 1998, could see regulators again shoot down its bid, according to observers. But that merely would delay the inevitable, they say. If Pacific Bell doesn’t win this time, it could next year, they say.
If it were up to Pacific Bell’s rivals in OC,who are eagerly awaiting word on the company’s bid,they’d gladly wait three more years. They argue Pacific Bell hasn’t done enough to open its network to competition, and businesses suffer because of it.
“There are numerous obstacles with Pacific Bell,” said Karen Potkul, vice president of regulatory affairs at Reston, Va.-based XO Communications Inc., which has its West Coast operations based in Santa Ana. “It has very obvious effect on our business and our end-user customer.”
But in making its case, Pacific Bell argues businesses stand to benefit. It notes that five states already have opened their long-distance markets to Baby Bells and have seen rates fall. New York customers, Pacific Bell contends, are saving more than $700 million annually after the state opened the long-distance market to Bell Atlantic, now Verizon Communications Inc.
“The standards set in California exceed those of any other state, and Pacific Bell has met those standards. Pacific Bell’s market is wide open,” said spokesman Bill Masheck. “Only a California PUC decision and (Federal Communications Commission) permission remain between California telephone consumers and the benefits of increased competition.”
But Pacific Bell’s rivals, so-called competitive local exchange carriers spawned by deregulation, argue the telecommunications power hasn’t earned its way into the long-distance market just yet.
Larger competitive carriers, such as WorldCom Inc., which employs 450 in Irvine, say Pacific Bell still has a “monopoly-style” hold on 94% of residential and business phone lines, which allows it to overcharge consumers and businesses.
“Pacific Bell is simply asking too much too soon,” said WorldCom spokeswoman Carolyn Berthelette.
The rivals all tell similar stories: Pacific Bell doesn’t provide rivals easy access to phone lines; its customer billing is tedious; and it’s difficult to set up gear in Pacific Bell facilities.
Dealing with Pacific Bell “can be a challenge,” according to Philip Clark of San Clemente-based FiberRide Inc., a local carrier.
One of the biggest grievances of rivals is that they have to give 120 days lead time to Pacific Bell to set up gear in a Pacific Bell facility.
“It’s not good for an organization that needs to grow quickly,” Clark said.
Then there are the horror stories. XO Communications, which counts some of OC’s largest companies among its customers, said a billing issue involving one of them left the unnamed company temporarily without phone service.
“They had no dial tone,” Potkul said.
Pacific Bell dismisses the charges. The company said it has been put to the test by state regulators on the issues raised by its rivals.
“Pacific Bell had a year-long, $10 million test on our order processing and billing systems by the PUC. Any part of our network they want to use, they can,” Mashek said.
Pacific Bell’s rivals say they aren’t opposed to the company offering long-distance service. They just say it’s too soon, according to Katherine Morehouse, president of CalTel, a California association of local exchange carriers.
By keeping Pacific Bell from offering long distance until it meets requirements that ensure competition, there’s an incentive to improve. Otherwise, the only thing competitive carriers could do to make Pacific Bell improve is take the company to court, Morehouse said.
“We just want some specific performance mechanisms in place,” she said. n
