PacBell Wants to Ease Regs

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Sacramento, Calif. -- State regulators should ease their
oversight of the profits and revenues of the state's largest local phone company,
Pacific Bell argued.

The telco cited the number of licenses granted to potential
telecommunications competitors in California in its filing to the state's Public
Utilities Commission.

SBC Communications Inc.-owned PacBell asked the regulators
to drop a formula called the 'productivity factor.' That scheme allows the PUC
to order PacBell to cut the utility's profits gained from technological efficiencies.

The utility needs the regulatory freedom to compete with
the 125 companies, including Cox Communications Inc., that are moving into local
telephony, executives said.

PacBell also wants to keep productivity gains that it makes
totaling between 11.5 percent and 15 percent. Currently, it must write rebates to
customers if the gains hit that level.

But competitors noted that only about 250,000 customers, or
1.5 percent of the telco's customer base, have migrated to other companies. Critics
fear that less oversight may allow the telco to cross-subsidize ancillary businesses, such
as its wireless cable venture in Southern California.

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