The State : Pact Calls for Phone Bill Cut

Pacific Bell’s residential customers would win an average reduction of about 25 cents on their monthly bills--much less than originally proposed--under a tentative settlement to resolve a dispute over allegations of wasteful spending by the phone company. The agreement, which still must receive final approval from the California Public Utilities Commission, calls for Pacific Bell to reduce rates over a four-year period by $36 million a year, or $144 million in all. Last August, however, PUC staffers recommended that rates be slashed by $700 million, or 10%, because of construction spending they termed unnecessary. Pacific Bell agreed to the plan to partly avoid the possibility of a lengthy and expensive legal fight, according to George Schmitt, the company’s vice president for regulatory affairs.