A New Reason to Hate the Phone Company

If Pacific Bell is allowed to expand its offering to long distance, it will likely extend its loathsome practices as well.

By year’s end, regulators in California could give Pacific Bell the green light to offer long-distance phone service. PacBell has been trying for years to get such approval, which appears inevitable and a bit lamentable. Regulators should give PacBell the OK to offer long distance, if only to give the public more reasons to loathe the Baby Bell.

The company already is notorious for cramming, the practice of adding costly services such as caller ID and call waiting to bills without customer authorization. With its return to the long-distance market, customers are virtually guaranteed to see an upswing in slamming, an already common and unlawful practice of switching long-distance providers without customer approval.

To date, Pacific Bell has failed to convince the powers that be in Sacramento, Calif., that it has opened its networks to competition for local phone service–a requirement the company must fulfill before it can offer long distance. Five years after the Telecommunications Act of 1996, PacBell still controls 98 percent of the local phone market. Officials at SBC, PacBell’s parent, say it’s not a monopoly and point to providers such as Cox Communications (COX, info) as proof that there’s competition.

AT&T and Sprint (FON, info) have tried and failed to offer local phone service in certain California markets. PacBell owns most of the local phone lines in the state, making it tough for would-be competitors to turn a profit. In all fairness to PacBell, many of those residential lines were installed years ago, when the nation had only one phone company, Ma Bell. As the failings of the Telecom Act illustrate, dismantling that monopoly and redistributing the phone lines has been easier said than done.

Bell Atlantic, now part of Verizon (VZ, info), secured federal approval to offer long-distance service for New York customers last year. SBC’s Southwestern Bell soon after got the nod to do the same in Texas. Consumers in those markets have one more choice when it comes to selecting their long distance providers. California consumers should be allowed the same option. In the end, the market will determine whether PacBell has what it takes to go the long distance.

Posted by on June 19, 2001