California PUC relaxes regulations

The California Public Utilities Commission acted yesterday to remove many regulatory requirements on its largest incumbent telephone companies, enabling greater pricing flexibility for AT&T, Frontier, SureWest and Verizon.

Under a proceeding known as the Uniform Regulatory Framework (URF), the regulatory commission conducted an extensive review of telecom market conditions and concluded that there is enough competition to curb incumbents’ pricing power, although it also imposed a freeze on residential phone rates until 2009. Incumbents will no longer have to get PUC approval of fare changes, which can be implemented after 30 days notice to customers, immediately upon being filed with the PUC.

The PUC also aligned its reporting requirements with those of the Federal Communications Commission.

“Regulation needs to recognize there is a competitive voice communications marketplace,” stated PUC President Michael R. Peevey. “The changes we order today will enhance competition by allowing new services to be provided sooner and eliminating unnecessary government regulation.”

Verizon applauded the changes, saying the changes would benefit consumers by encouraging investment and job growth in California, aong with more competition.

“These are new rules for a new era,” said West Region President Tim McCallion, in a prepared statement. “The new rules reflect the realities of the 21st century. The biggest winners, by far, will be consumers, who will see more choices for communications and entertainment.”