PUC to mull telephone CLASS proposals.

Controversy swirls around use of Caller ID technology

A host of new telephone services that promise time-saving benefits to small businesses in California, but also augur some disturbing side effects, faces a possible vote by state regulators this week.

The services were proposed by local telephone companies for residents, small businesses and professional firms that use from one to five phone lines. They aim to boost one's ability to manage incoming calls, especially in blocking abusive callers and favoring the most desirable. They might also shackle some business people, such as bill collectors who might find their calls stymied by debtors they're trying to reach.

"These services are going to change basic telephone interaction as we know it today, either subtly or dramatically," predicted M.J. Purcell, a regulatory analyst with the state Public Utilities Commission.

Telephone innovations are keenly watched in decentralized Los Angeles County, where the phone -- not the computer -- is king among business people who often are too far apart from one another to swing face-to-face meetings. Significantly, L.A. is the car-phone capital of California.

Nevertheless, in a region that sprouts entrepreneurs, most small businesses are largely ignorant of the pros and cons of the proposed Custom Local Access Signaling Services, or CLASS, said industry experts interviewed last week. That's because one of the services, dubbed Caller ID, has grabbed all the attention.

During 20 days of recent public hearings on CLASS conducted by state regulators around the state, Caller ID whipped up a torrent of critical attention. It totally overshadowed 15 other CLASS proposals that are perhaps more important to commerce.

(Caller ID is a technology that displays a caller's phone number to the receiving party before he or she answers the line. It was broadly attacked by consumer advocates for possibly infringing on a caller's privacy and encouraging anyone to sell a caller's number to voracious telemarketers.)

The Public Utilities Commission in San Francisco has scheduled a Feb. 20 discussion of all the CLASS issues, from pricing schemes to privacy qualms. CLASS is so significant, said PUC staff members, that several days of discussion are likely before a final vote.

CLASS was first proposed by the local telephone monopolies in 1990 as the next generation to 1980s' innovations like call forwarding, whereby a call is automatically routed to a second location's telephone.

"People want more control over the instrument," said Pacific Bell Product Manager Ethan Thorman. "If there's some person who's determined to sell you engraved pencils, for instance, you now would have the option to block his call."

With a green light from the PUC, proposers Pacific Bell and GTE California could begin offering the new systems in L.A. County as soon as springtime.

A PUC administrative-law judge who studied the legality of CLASS has advised against Caller ID but supported all the other services. His recommendation is not binding on the PUC.

Several other states have authorized CLASS-type add-ons, but the judge's analysis of them focused largely on reactions to Caller ID.

As for the other services, their names nearly explain their functions: Automatic Busy Redial, VIP Alert, and so forth.

One service, Call Return, allows the subscriber to identify the number of the last person who called. But state law mandates that callers be given technology to deny their number to the called party.

Nevertheless, a recipient might form a negative opinion about a caller who chooses to hide his phone number, said some industry sources. Such a "chilling effect" on communication might happen occasionally with Call Return, speculated the PUC's Purcell. "There's a flip side" to CLASS's beneficial effects touted by PacBell and GTE, she said, while declining to estimate a net positive or negative effect on users. Pacific Bell's Thorman too admitted there is a downside to CLASS, which he professed was outweighed by the pluses.

Sigrid Hawkes, director of the Los Angeles office of a consumer advocate group TURN (Toward Utility Rate Normalization) condemns Caller ID but generally supports the rest of CLASS. She predicted mom-and-pop businesses are the most likely subscribers to the latter services, which are promoted at $3.50 to $10 each per month, with discounts for ordering more than one.

Hawkes pointed to Priority Ringing, which would allow subscribers to give selected callers a code number that would trigger a special ring, alerting recipients to a treasured call. "For a sales person who's waiting for a confirmation on a very large order, he or she wants to make sure the customer at the other end gets through with the Big Sale of Your Life," said Hawkes.

Two trade groups made formal protests to the CLASS proceeding: Telephone Answering Services of California and California Bankers Clearing House Association. The first group, which represents independent services like voice mail, struck an agreement with the phone monopolies over technical access issues and then dropped its objection, according to its attorney. The bankers' group objected primarily to the pricing scheme, according to Pacific Bell's Thorman.