PacBell Gets Closer to Long-Distance

In a carefully worded endorsement, the Justice Department on Tuesday said federal regulators should approve SBC Pacific Bell’s long-distance application, bringing California’s largest local phone company another step closer to joining in the state’s $10-billion market for long-distance service.

In a nine-page evaluation, the antitrust division of the Justice Department ruled that “available evidence suggests that generally, SBC has succeeded in opening its local telecommunications markets in California,” and thus, the Federal Communications Commission should approve the phone company’s long-distance application.

The decision leaves SBC PacBell with one, or possibly two, hurdles to clear before it can begin selling long-distance service to its nearly 10 million customers in California. The FCC already is reviewing the company’s application and has until Dec. 19 to approve or reject it.

“What we see here is a strong endorsement of our application,” said George Thompson, a spokesman for SBC Communications Inc., the phone company’s parent.

However, Justice Department officials urged the FCC “to review carefully” a reassessment by California regulators, who will set SBC PacBell’s permanent wholesale rates. Those rates determine how much rival companies have to pay SBC PacBell to use the lines and equipment they need to sell local phone service in residential areas.

Last month, the phone company won tepid approval from the state’s Public Utilities Commission, which ruled that SBC PacBell passed the relevant federal requirements but failed key state rules. If left unresolved, the PUC’s split decision could force a showdown between federal and state regulators or spark legal action from SBC PacBell.