CCC PPPPP U U CCC N N EEEEE W W W SSS C C P p U U C C NN N E W W W S S C P P U U C N N N E W W W S C PPPPP U U C N N N EEE W W W W SSS C P U U C N N N E WW WW S C C P U U C C N NN E W W S S CCC P UUUU CCC N N EEEEE W W SSS California Public Utilities Commission 505 Van Ness Avenue, Room 5301 San Francisco, CA 94102 CONTACT: Dianne Dienstein July 19, 1995 CPUC - 67 415-703-2423 (R.95-01-020, I.95-01-021) CPUC ISSUES PROPOSED RULES TO MAINTAIN UNIVERSAL PHONE SERVICE IN FUTURE COMPETITIVE LOCAL PHONE MARKET The California Public Utilities Commission (CPUC) today affirmed its commitment to assuring universal service - access by all Californians to basic telephone service at reasonable rates - and proposed rules to assure the continuation of affordable, high quality service in the coming competitive local phone service market. The Commission states that companies which want to compete in the local phone service market will have opportunities as well as obligations associated with universal service. Ten hearings will be held statewide in September and October to seek public comment on the proposed universal service rules. A Full Panel Hearing is scheduled for September 29 in San Francisco. Parties will file written comments and, if necessary, evidentiary hearings will be held before the Commission issues interim rules. Final rules will be issued once local phone service competition begins. Universal Service issues are fundamental to the ongoing CPUC proceeding to allow local and long distance companies to compete in providing basic local phone service by January 1, 1997, just as they already compete in providing local toll service. The Commission will continue today's meeting to July 24 at 9 a.m. to consider item 6 on its meeting agenda today regarding allowing long distance and other companies to compete with local phone companies in providing local phone service. Key Universal Service issues and Commission proposals are: - more - HOW TO KEEP RATES REASONABLE IN RURAL AND OTHER HIGH COST AREAS Support for high cost areas must be redesigned to allow customer choice and distribute the burden of serving all high cost areas in California. The Commission proposes a system that gives all providers willing to serve high cost customers access to a subsidy which would be reduced as new technology and competition drive down costs. The subsidy could be distributed through a voucher system, and available to all qualifying phone companies serving residential customers. The voucher system would replace the California High Cost Fund for local telephone companies. A customer would receive a credit voucher for a set amount of money representing the difference between the actual cost of serving that customer and a rate deemed affordable by the Commission. The customer then chooses a phone company and that company receives a subsidy from the fund on behalf of the customer. The phone company credits the subsidy amount on the customer's bill, and the customer pays the balance of the bill. The Commission seeks comment on creating objective cost studies and determining the total subsidy amount. A proposed safeguard to assure that all areas of the state are served would be that if no phone company is willing to serve a given area, the Commission or any qualified provider could initiate an auction for that area. The lowest bidder would become the subsidized carrier of last resort for that area for a set period of time. PROTECTION FOR LOW-INCOME RESIDENTIAL CUSTOMERS The Universal Lifeline Telephone Service program fulfills the legislative mandate to assure low-income consumers receive basic phone service at a reduced rate. Currently, the Commission mandates statewide Lifeline rates of $5.62 for residential flat rate service and $3 for residential measured rate service. The Commission proposes requiring all local phone companies to charge these rates to qualified customers. Companies then could be reimbursed from the Lifeline subsidy. The Lifeline program is funded by a surcharge paid by all phone customers except one-way paging customers. - more - Last year, the Commission ordered Pacific Bell and GTEC - the two largest local phone companies - to significantly improve their customer outreach and educational programs to assure they serve at least 95 percent of low-income, non-white, and non- English speaking households. Today the Commission ordered all local phone companies, current and future, to meet this same goal warning that their success, as determined by monitoring reports, may determine whether they are designated carriers of last resort. WHAT THE COMMISSION DEFINES AS BASIC PHONE SERVICE The Commission proposes basic service include: a single line, access to long distance companies, the ability to place and receive calls, touch tone dialing, free access to 911, a reduced rate for low-income customers, customer choice of flat or measured rate service, access to directory assistance and directory listing and operator assistance, access to information and 800 services, one-time free blocking for information services and one-time billing adjustment for charges incurred in error, access to phone relay service for the deaf, disabled and hearing- impaired, access to public pay phones, free access to customer service for information about universal lifeline phone service, service activation or termination and repair and bill inquiries. The Commission proposes formal review of basic service, every three years as necessary, to add other services created by new technology which become "essential" and to delete services as appropriate. The Commission believes that requiring all phone companies to provide all of these essential elements of basic service enables customers everywhere in the state to have the same service regardless of location, and promotes fair, true competition because all companies must meet the same standard. It also prevents customers from having to purchase services they don't need and makes administering universal service less burdensome. CONSUMER INFORMATION Consumers need information to make informed choices of telecommunications services and providers. The Commission - more - proposes requiring all phone companies providing basic service to provide specific information about it in a standard matrix format in any marketing information targeted to residential customers. Using a matrix form will allow consumers to easily compare providers' rates and services. HOW TO GIVE ALL CUSTOMERS ACCESS TO NEW TELECOMMUNICATIONS TECHNOLOGY One of the goals of universal service is to provide incentives to promote deployment of new telecommunications technology to all customers. The Commission did not propose a rule but rather asked for suggestions regarding funding for grant programs for this purpose or leaving development of new products and services to market forces, with checks to prevent discrimination in offering those services to customers. UNIVERSAL SERVICE PUBLIC PARTICIPATION HEARINGS The Commission will hold the following hearings to receive comment from the public about these universal service proposals and universal service issues. The hearings will be at 7 p.m. and specific locations will be publicized as they are finalized. Those interested may also find out locations by calling the CPUC Public Advisor's Office at 415-703-2074 or 213-897-3544, or accessing the Internet via gopher.cpuc.ca.gov . Los Angeles September 20 San Bernardino September 26 Barstow September 27 San Diego October 2 Fresno October 5 San Jose October 10 Sacramento October 11 Volcano October 12 Redding October 19 Eureka October 24 ###