Panel OKs ban on phone fees

SACRAMENTO —  California’s four biggest telephone companies Tuesday couldn’t convince a key legislative committee that they should be allowed to charge consumers for unlisted numbers.

Members of the state Senate Energy, Utilities and Communications Committee cast a bipartisan 5-0 vote for a bill by Sen. Sheila Kuehl (D-Santa Monica) that would prohibit traditional, wired phone systems from collecting fees to keep numbers out of phone books and directory assistance.

Such charges have been unregulated for the last year and run as high as $1.99 a month. About 40% of California’s 12 million, nonmobile phone users have unlisted numbers.

Privacy advocates argued that the state constitution guarantees that certain personal information be kept private. “It’s dead wrong for phone companies to profit from their constitutional right to privacy,” said Mark Toney, executive director of the Utility Reform Network, a San Francisco-based consumer group.

AT&T;, the state’s largest carrier with about 8 million residential lines, recently raised its unlisted number rates 346% to $1.25 a month from 28 cents.

“There’s every indication” that AT&T; and other companies will continue to raise prices if not prohibited by law, Kuehl said. She pointed out that all cellular phone numbers are unlisted at no charge to network subscribers.

Representatives of the four phone companies countered that lawmakers shouldn’t tinker with the prices for their services, which have been set in a competitive marketplace since the California Public Utilities Commission deregulated fixed-line companies’ rates.

“I’ve not heard any significant complaints about the current system,” Bill Devine, an AT&T; vice president, told the committee.

Passage of the Kuehl bill, SB1423, could cost AT&T; about $50 million in lost annual revenue, according to an analysis of the bill by Senate committee staff. The bill now goes to the Senate floor for consideration and, if it passes, then on to the Assembly.

Kelly Boyd, a lobbyist for SureWest Communications and Citizens Communications Co., two smaller companies that operate in parts of Northern California, said her clients depended on fees on unlisted numbers to make up for revenue lost by cutting rates for other services.

Phone companies incur costs for segregating unlisted numbers from listed ones in computerized records, Boyd said.

But state Sen. Dave Cox, a Republican from the Sacramento suburb of Fair Oaks, said the phone companies failed to “persuade me that it costs $1.75 a month for an unlisted telephone number.”

Competition, if allowed to operate unfettered, should eventually bring prices down for all services, contended Syrus Devers, a lobbyist for Verizon Communications Inc., the state’s second-largest traditional phone network. “Some companies are charging more and some less,” he said.

But, under deregulation, prices mostly seem to be going up, Kuehl said. In addition to fees for unlisted numbers, monthly charges for residential directory assistance and local toll calls have jumped substantially, the Senate committee analysis said.

Fees for basic telephone service probably will increase in January, when a legislative freeze expires. “They are only competing in an upward spiral by how much they can raise their prices,” Kuehl said.

--

marc.lifsher@latimes.com