CPUC kills phone competition, paves way for higher bills

A multi-million dollar media and lobbying campaign by SBC paid off big for the phone giant today when the California Public Utilities Commission acceded to its demand to raise wholesale phone rates.

For Immediate Release From The Utility Reform Network

SBC has been pushing for increases in the rates competitors pay for the use of the phone lines or UNEs (Unbundled Network Elements), increases that will result in windfall profits for the Texas-based company. Not only is today’s decision likely to drive many of their competitors out of business, but it could also pave the way for increases in the rates California consumers will pay for local phone service.

"The CPUC is handing SBC its monopoly back on a silver platter," said TURN executive director Bob Finkelstein. "Consumers may well see higher prices and fewer choices as a result, not only for basic service but for all services that use the telephone line." Evidence before the CPUC showed that the costs of the phone network are about half of what SBC claims and that current rates already adequately compensate SBC for the use of its lines.

The CPUC Administrative Law Judge that reviewed the evidence in the case recommended a much smaller increase, but the majority of Commissioners ignored that recommendation in favor of the higher rates SBC lobbied for.

"SBC’s windfall profits will come straight out of customers’ pockets," said Finkelstein. "SBC ran a campaign of deception, claiming that what was at stake today was investment in California, an issue that simply is not on the table. It’s shameful that the Commission bought into those claims. This is a decision that will cost the state’s consumers dearly."