New competition looks likely for long-distance calls: state regulators set to rule on new toll-call fee structure.

By the end of 1992 the California Public Utilities Commission will decide whether to let long-distance telephone companies compete against Pacific Bell and GTE California for Southern California regional calls.

The major carrier of toll calls in California is Pacific Bell, said Jim Land, a telecommunications industry analyst for the Federal Communications Commission. He said Pacific Bell collected $1.72 billion in toll fees throughout California in 1990.

At least $1 million of that business was within the FCC-designated Southern California local access transport area that includes Los Angeles, Santa Barbara, Ventura, Orange, Riverside and San Bernardino counties, Land said. If the state PUC approves competition for toll calls within California's regions, long-distance companies -- such as AT&T, MCI and US Sprint -- will compete with Pacific Bell and GTE for toll calls in the regions.

However, the PUC will not approve the plan any sooner than 1993, said Richard Purkey, San Francisco-based US Sprint staff director of regulatory affairs. At that time, toll calls from designated prefixes will be routed through carriers such as MCI or Sprint just as long-distance calls have been since 1984. They still would be barred from local service.

As with long-distance service, telephone customers will be able to shop all the carriers for price.

Indeed, if toll call service is deregulated, a telephone customer could get as many as four separate bills: one for equipment rental, one for local service, one for toll service within the region and one for long-distance service, said GTE Manager of Public Affairs Larry Cox.

Unlike Pacific Bell officials who say they are still grappling with California PUC officials on a new rate structure, Cox said, "We welcome the deregulation."

For regulators and some phone companies, the reasoning is that competition will cut toll-service costs but that should encourage greater customer use. Thus, Pacific Bell and GTE -- rather than losing business to new rivals -- would be able to expand sales because the total market "pie" would be bigger.

The FCC ruled in 1984 that all carriers could provide long-distance service, said AT&T Vice President of Public Affairs Dick Bromley. AT&T is based in New York but Bromley works from the company's San Francisco office.

Since 1984, AT&T, US Sprint, MCI and other long-distance providers have competed for customers. However, they could not compete with Pacific Bell and GTE for toll calls within FCC-designated regions, such as Southern California.

"Competition will bring more innovation into the toll service and make it easier for companies of all types to do business in California," Bromley said.

Pacific Bell provides about 90 percent of the toll call service within Southern California. San Francisco and Sacramento, for instance, are located in a separate access area. Therefore, a call from Los Angeles to San Francisco is a long-distance rather than a toll call.

Pacific Bell is drafting a new toll call fee structure with the PUC so the phone company can better cope with deregulation, said Orange-based Pacific Bell spokeswoman Linda Bonniksen. She said Pacific Bell wants to raise basic service fees an additional $2 to $5. However, customers will save 25 percent to 40 percent on their toll calls, she said.

Former PUC chairman turned private consultant Mitch Wilk said opening the toll call service to competition will help businesses and many residential customers cut costs. He said businesses presently pay more for long-distance and toll calls than do residential customers.

The higher basic service rates GTE and Pacific Bell charge will help them make up for toll fee income lost to competitors, Wilk explained.

"AT&T, MCI and Sprint will be the big winners initially. But if pricing is properly revised, the changes will be good because it will cut the cost of business telephone service," Wilk said.

Business and residential customers who make lots of toll calls will save enough on the telephone bills to compensate for the higher basic service fees. Pacific Bell officials contend that if the toll market is opened to competition it will have to raise basic service rates. At the same time, Pacific Bell will drop its toll rates within local access areas. In the Southern California access areas, that would be between the following area codes: 213, 714, 818, 805, 310 and a small portion of 619.