PacBell Proposes Residential Rate Freeze

Pacific Bell is asking state regulators to scrap much of their remaining regulatory power over phone pricing in return for a pledge by PacBell to freeze residential phone service rates for three years at the current price (about $11.25 a month for basic service). In a sweeping proposal filed this week, the state’s largest phone company argues that competition is heating up and the California Public Utilities Commission should eliminate its policy of tying rates--including rate reductions--to company profit and complex productivity formulas. A spokesman for the Utility Reform Network, a consumer group critical of PacBell, said he wasn’t impressed by the rate-freeze offer and believes the proposal assumes competition that has not materialized. Regulators will review arguments for and against the proposal, with a final decision expected by year-end.