California PUC lowers UNE rates

The California Public Utility Commission (PUC), by a 3-2 vote, lowered the rates SBC subsidiary Pacific Bell can charge competitors for unbundled loops and unbundled local and tandem switching from the current statewide average of $22.94 to $13.97.

The PUC called the rates “interim” and said they were necessary due to delays in a rate proceeding caused by “inadequacies in Pacific Bell’s cost study filing” and the need to examine competing cost models. The proceeding will remain open and the interim rates will remain in effect until the final rates are adopted. In the meantime, the interim rates are subject to revision, according to a PUC spokeswoman.

AT&T General Counsel Jim Cicconi, said the decision gives California competitors a “fighting chance of ending SBC’s stranglehold” on local phone service in the state.

“[The decision] will allow AT&T to enter the local market, and that is exactly what we plan to do,” Cicconi said in a statement.

A spokesman for SBC said its price for a local loop in California is already among the lowest in the nation, ranking 42nd among the 48 contiguous states, and alleged that the PUC ignored five years worth of research in making its determination. He said the new loop rate is 15% lower than the previous rate and that non-loop rates had been slashed by 70%.

“We don’t believe the lower rates are justified, reasonable or supported by the data,” the spokesman said.

He added that the rates are now so low that SBC would have to make some “serious financial decisions” going forward, while AT&T and MCI enjoys a “sweetheart of a deal.”

“This poses a real threat to us in terms of maintaining the type of robust telecommunications network that our customers will expect from us for the next century,” the spokesman said. “I guess this is what it takes to get them to come into the market.”

--Glenn Bischoff, Senior News Writer