1983-07-20 Public Hearings and Regular Meeting

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f� 0 • equipment. The 22 Bell companies will be reorganized into seven regional companies. Of the 22, only St. Louis - based Southwestern. Bell will re- tain its present area, which in- cludes Texas, Arkansas, Oklahoma, Missouri and Kansas. Its estimated $14.8 billion, in assets will rank sixth among the seven companies but still in the top 10 of U.S. utili- ties. Competition, with its expected lower prices, will. apply •only..4o equipment and long -distance. -serv- ice. Local rates will remain, a mo- nopoly service ofthe the Bell compa- nies. All sides agree the -local rates are on thew' ay up.' For .*eaTs, Bell officials have. ar- gued that artificially high long-dis- tance sates :have subsidized local rates � that ; are 'too low. _.Now, stripped of most long-distance prof- its once shared _with AT&T, Bell companies insist local rates must go up to pay Bell's full cost of pro- viding that'service. One important voice continues to rebut the .' idea of inevitably higher local rates. Federal'Judge Harold Greene, the man with the fi- nal say on details of the breakup, wrote in .an April opinion: "The fostering. of competition in the telecommunications field need not and should not be the cause of in- creases in local telephone rates." Greene said he is angry about an FCC order requiring an "access charge," averaging about $4 monthly, that is intended to subsi- dize Bell for losing its share of AT&T interstate long-distance prof- its. Southwestern Bell is asking the PUC to approve a separate charge, also about $4 per monthly bill, to make up for lost intrastate long-dis- tance revenues. He complained that all Bell cus- tomers will have to pay the charge even if they never make a long-dis- tance call. By inflating local rates, he said, the FCC access charge "runs directly counter" to his goal of accomplishing divestiture without disrupting the 50-year trad- ition of affordable phones. Greene argued that AT&T, MCI and other long-distance providers should pay, the access charges as a cost of doing business — plugging into Bell's network. Under the FCC order, those companies will pay ac- cess cnarges but only until 1989. In the meantime, ratepayers' charges will rise. until they pay the entire subsidy. ' He disputed .both assumptions behind the access charge -scheme.. one, that long-distance rates. haVo. subsidized low local rates and, .two; that "bypass" will result if AT&T, MCI and Ithe others have to pay ac. cess charges. -.Bell's "bypass" theory holds that if long-distance rates are too high, major businesses will install .their'. own communications "systems, whether by satellite or other avail- able technology, and bypass the Bell network. The lost revenues; Bell officials contend, would have to be made up in local rates. Higher local rates are only one likely result of divestiture for the Bell customer. Other changes that lie ahead: ■ Ordering service & equip- ment. As before, call the local Bell business office to order an "access line" to your premises. But Bell will no longer lease, sell, install or repair phones For equipment, -you cWIlease.;'from . AT&T's ii'mited stock at - Amaican Bell stores. or buy.froni one of the many retailers entering` lie market. ■ Repairs. Bell will fix: pk0ne- 4ine probletns, but its responsibil- ity ends, at the customers` premises. If equipment is leased; calLAT&T's outlet: If a set is owned, the respon- sibility for :repairs is" the cus- tomer's. ■ Long-distance. Bell will link calls within new geographic boundaries called Local Access and Transport Areas, or LATAs, but not out- side those areas. For calls between, LATAs — from Dallas to El Paso, for example — or between states, the customer must choose another provider, such as AT&T, MCI or Sprint. . By 1981, theafoft aling codes.heeded to.,. use MCI: and other.. companies will. be to 4ssociated Press dueed•to'four digits so that AT&'T, _ with, its. simple 1-plus-area=code' system, will not have a competitive advantage: ■ Billing. Th6-dae.,sionthly bill from Bell could be replaced 'by tip to three: -one from Bell' for local service,: a':second froni'.AT&T if.the customer rents _ qnB and a third_ from the supplier of long-distance service. But one bill still is possible because AT&T and its iongdistance rivals could contract withAe11 to provide billing services. � :r The PUC will continue to regu-, late intrastate long-distance rates for Bell and AT&T. Other long-dis- tance companies, because they share only about 5 percent of the market, are unregulated. The FCC will continue to regulate AT&T in- terstate rates, although the com- mission could forfeit the job if ri- _ vat. namptigies.evei capture enough busi4ess.4Q. pzpefe squarely with 'Alftg. itt} bypass, LAVA will, enter At'-dh>lencaz} jgrgon afteirst itui a"'Most simply;" as GrebfiOL fin ed:rt; "a'IATA�karks the:6otind caries beyond id-1 ich a Bell'b`per'tA,' = :`.ng company . may no carry telephonocalls,".'-.: r't .,..Bell and-alfe Justice Departinobi proposgd; thdjdea;. which :Greene-, has' accepted, largely as a way fo. . Bell to earn some long-distance ...: I—. .-revenues. ;Natioiiwide, 161 LATAs .S#ere drawn by-Belj and AT&T; in .rTexas,'there are 1S. :Though Bell wants to have a mo- nopoly on long-distance service within each LATA, Greene has said that competition should be al- lowed. But his opinion is not bind- ing on the Texas PUC because the state regulates intrastate service. To date, divestiture has been a Washington, D.C., story: the Justice Department, the federal corm, the FCC and technological advances hav6.0` fined fhe future: Now the 50 state iitiiity cpiumissions enter the - 9ontroversy es t?Sey, tryto set local tea.t:eflectia a.revolution about.:: •which' the public i9 largely una .,The .carman of ' Washington sSate's cpiitmigsion, a participant in �Ib .receat $an: Francisco seminar, laid he is4esigned to the wrath of 'theatePayers "Lpniy hope; `he said, that they, .on ntaIioot the. messenger before we ha' tsh'the:explanation."