Pacific Bell Asks Rate Hike of $935 Million

Many of Pacific Bell’s residential customers would pay $16 a month next year for unlimited local calling that now costs $8.25 under a proposal the company filed Monday with the state Public Utilities Commission.

The rate schedule also includes a $10 charge that would cover 130 local calls a month, with additional calls costing 10 cents each.

Under the company’s proposed schedule, directory assistance would cost 35 cents a call, up from 25 cents, but with a continuation of the current five free calls a month.

The proposed rate schedule shows how Pacific Bell would raise $935 million in increased revenue, a 20% hike being considered by the PUC. The company has rarely--and perhaps never--obtained all that it has sought, however, and its chances this time are considered slimmer than usual.

That is because the PUC’s public staff, which represents all telecommunications users, has recommended that Pacific’s rates be slashed $480 million on the grounds that the company overestimated labor and equipment costs and underestimated revenue from new customers. This puts the two sides more than $1.4 billion apart as the five commissioners begin hearing public testimony on Pacific Bell’s $935-million rate package.

The PUC has said it will first decide how much Pacific’s revenue should be increased or decreased and levy a surcharge or credit effective Jan. 1, 1986. The adjustment will stay in effect until the commission draws up a detailed rate schedule to replace it.

Pacific Bell’s proposal offers several basic monthly service levels, each with its own rate structure. In parts of California, however, some of the options may not be available. The options are:

- Unlimited service. For $16 a month, residential customers could make an unlimited number of local calls of any length, just as they now do for $8.25. The plan aims at 15% of Pacific customers who make more than 200 local calls a month, Pacific said. However, most residential customers today subscribe to the $8.25 service.

- Call-allowance plan. For $10 a month, residential customers could make up to 130 untimed local calls a month, paying 10 cents each for additional calls. About 60% of the company’s residential customers make fewer than 130 local calls a month, the company said. No similar plan exists now.

- Economy service. For $6 a month, a residential customer would get $2 worth of local calls billed at 5 cents for the first minute and a penny for each additional minute. Under the plan, Pacific estimated, a customer who made two five-minute calls a day would pay $9.40 a month. It said that 20% of its customers would pay the same as or less than they now do under economy service, which currently costs $4.45, with a $3 calling allowance.

- Lifeline. Under this minimal service for households with annual income of $11,500 or less, customers would pay $2.25 for 30 untimed local calls, up from $1.48. In areas where Pacific Bell cannot measure local calls--generally, these are less densely inhabited areas--unlimited lifeline service would cost $7.25, up from $3.48. The service is subsidized by a tax on intrastate revenues of long-distance telephone companies.

In a related action, the Assembly Ways and Means Committee is scheduled today to consider legislation by Gwen Moore (D-Los Angeles) that would force the PUC to rescind a $140-million shift in “access charges” paid by long-distance carriers to the bills of residential customers. Moore’s Assembly Bill 550 would prohibit the PUC from establishing any such charges before Jan. 1, 1988, and would direct it to study the effect of a federally required $1-a-month access charge that will begin appearing on local bills this month.