TURN Consumer Advocates : Phone Deregulation: Christmas Coming Early To AT&T and Verizon

Contact: Contact: Mindy Spatt, TURN Communications Director, 415-929-8876, ext. 306

Phone Deregulation: Christmas Coming Early To AT&T and Verizon

For Immediate Release From The Utility Reform Network

Wednesday Aug. 23, San Francisco -- With the California Public Utilities Commission poised to deregulate phone service across the board, consumer advocates are warning that rapid jumps in phone rates are ahead. The CPUC is about to unveil a "Uniform Regulatory Framework" (URF), scheduled for an August 24 vote, that is a virtual wish list for mega-monopolies AT&T and Verizon, giving them the ability to raise rates at will.

The proposal would scuttle current consumer protections in favor of blind faith that the "market" will protect consumers. In addition to lifting price caps for basic service, directory assistance, white pages listing and other services, URF would eliminate current prohibitions on charging rural customers higher rates than those that live in more profitable urban areas.

"There are only two entities that will benefit from further phone deregulation - AT&T and Verizon," said TURN executive director Bob Finkelstein. "It is shameful that public officials would put Californians at risk of higher prices by allowing corporations to write the rules and regulations, but that is exactly what the CPUC has allowed AT&T and Verizon to do with URF."

The CPUC will also allow de-averaging, which enables phone companies to charge rural customers a premium for basic phone service. "De-averaging opens the door for discrimination against rural customers and other customers in hard-to-serve areas. They will pay more so that AT&T and Verizon can offer lower rates in competitive urban areas and finance their expansion into lucrative cable markets," Finkelstein said.

Finkelstein added that the CPUC "appears to be all too willing to throw consumers to the wolves. Despite evidence that the regulations URF will eliminate are essential to preventing price-gouging, the Schwarzenegger CPUC is keen on doing the phone industry's bidding." Finkelstein said a two-year cap on basic rates offered by the industry is a bone that will do little to protect consumers in the long run. "It's ironic - the name the Commission gave the proceeding is the sound consumers will make when they start to suffer the price hikes deregulation brings - URF!"

Consumer organizations urging the CPUC to reject URF include AARP, Grey Panthers California, California Retired Teachers Association, Utility Consumers Action Network, California Nevada Community Action Partnership, California Church Impact, La Union Del Pueblo Entrero (LUPE), California Mobilehome Resource & Action Association (CMRAA), Central Coast Energy Services, Inc., Southern California Forum for Energy Efficiency, Environmental and Human Service Providers and Association of California Community and Energy Providers (ACCES).

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