HomeMy WebLinkAboutAgenda Report - August 3, 1983 (43)PUC City Clerk Reimche presented a copy of the Pacific Telephone
APPLICATIONS and Telegraph Coupany Notice of Application for Authority
to adopt intrastate access charge tariffs and Notice of
Amendment to Application for an increase in rates.
Discussion regarding this matter followed with no formal
action being taken by the Council.
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RECEIVED
1:83 JUL 1 1 AN 9 59
NOTICE OF APPLICATION ALICE M* RENNE
FOR AUTHORITY TO ADOPT INTRASTATE CITY CLERK
ACCESS CHARGE TARIFFS CITY OF LODI
AND
NOTICE OF AMENDMENT TO APPLICATION
FOR AN INCREASE IN RATES
The Pacific Telephone and Telegraph Company
("Pacific") has filed, as ;art of the consolidated proceedings
in Application No. 83-01-22 (General Rate Increase) and
No. 82-11-07 (Depreciation Offset), an Application for
authority to adopt intrastate access charge tariffs, and will
file on July 5, 1983 an Amendment to Application for an
increas; in rates. Both the Application and Amendment to
Application are necessary to comply with an order of the
California Public Utilities Commission ("CPUC"), dated April f,
1983 (Decision No. 83-04-021), requiring that they be made in
conjunction with Pacific's consolidated rate proceedings.
Tbes- filings are necessary because of substantial
changes in the telecommunications industry that are scheduled
to take effect on January 1, 1984. On that date, it is now
proposed that Pacific and all. Bell Operating Companies ("BOCs")
will be divested from the American Telephone and Telegraph
Company. After this date, Pacific's operating conditions will
be substantially changed and Pacific is required to reflect
these changes in its pending consolidated rate cases.
As part of divestiture,. Pacific will be limited to
providing telecommunications services within designated service
areas, including the provision of interstate and intrastate
exchange access to interexchange carriers. Pacific's
intrastate access charge tariffs are designed, in part, to
fully satisfy this requirement.
In addition, the Federal Communications Commission
("FCC") adopted on December 22, 1982 its ':bird Report and Order
in FCC Docket No. 78-72, which rAquires the filing of
interstate access charge tariffs to be effective January 1,
1984. Pacific's proposed intrastate access charge tariffs are
consistent with the access charge structure adopted by the FCC
to accommodate a competitive environment applicable to many
interstate and intrastate telecommunications services.
The introduction of access charges does not increase
Pacific's profits; however, Pacific's proposal will change the
amount some customers pay for monthly service.
Summary of Proposed Access Charges
There will be two types of access charges:
(1) intrastate and (2) interstate. The CPUC decides how much
the intrastate charges will be and the FCC decides the amount
of the interstate charges. Later this year, Pacific will ask
for the interstate charges after some factors are clarified by
the FCC. However, for now, we will estimate those interstate
rates so customers will know the approximate effect on their
4445A. 2
`otal bill. Final intrastate access charges will be determined
by the CPUC after public hearings.
Estimated Revenue Impact For Access Charges
*Intrastate *Interstate
(CPUC) (FCC)
Estimated Estimated
Amount Amount $ of
(Millions) (Millions) Total
Interexchange Carriers $1,001 $1,760 79
Business Customers 117 181 8
Residence Customers 171 276 13
*These dollar amounts could change due to possible
modifications by the FCC.
Based upon current information, the access line charge
rates (subject to final approval by the CPUC for intrastate and
the FCC for interstate) -applicable to business, residence
(except Lifeline) and Centrex customers are as follows:
These access line charges are in addition to the
charges for local telephone service set by the CPUC.
4445A 3
Intrastate
Interstate
Access Line
Access Line
Charge Per Line
Charge Per
Line
Service
Per Month (CPUC)
Per Month
(FCC)* Total
Residence
Access Line
Charge
$2.10
$2.00
S4.10
Business
AccessAccess Line
Charge
$4.25
$4.00
$8.25
Centrex Line
Charge
S.24 - .53
$.22 -
.50 $.46 - $1.O3
`These are minimum
charges and may
change due
to possible
modifications by
the FCC.
These access line charges are in addition to the
charges for local telephone service set by the CPUC.
4445A 3
SUMMARY OF PROPOSED CHARGES
APPLICABLE TO AMENDMENT TO APPLICATION
FOR AN INCREASE IN RATES
In 1984, Pacific will be faced with increased costs of
doing business and Pacific's separation from the Bell System.
Therefore, we have revised our request for a rate increase as
follows:
BASIC RATES
Pacific is proposing to increase the rates charged for
both residence and business service.
RESIDENCE LIFELINE SERVICE - would increase from the
current rate of $2.50 per month to $3.75. The present
allowance of 30 calls per month would not change. Each local
call beyond the allowance would cost 4 cents for the first
minute and 1 cent for each additional minute.
In areas where measured service is not currently
available, a new flat rate Lifeline service would b�- offered at
$7.10 per month until Residence Measured Lifeline Service
becomes available.
Because Lifeline is designed for eligible low income
persons, Pacific is proposing that both measured Lifeline and
the new flat rate Lifeline service be limited to qualified
households. The specific eligibility requirements should be
easy -to -follow and administered by an appropriate state agency.
RESIDENCE PREMIUM (FLAT RATE) SERVICE - would increase
from the present $7 in the Los Angeles, San Francisco - East
Bay metropolitan extended areas (or $6.70 in other areas) to $14.25.
4445A. 4
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RESIDENCE STANDARD MEASURED SERVICE - would increase
from the present $3.75 to $7.50 per month. The existing
monthly usage allowance of $3.00 for standard measured service
would be eliminated.
BUSINESS FLAT RATE SERVICE - would increase from the
present $14.55 per month to $19.
BUSINESS MEASURED SERVICE - would increase from the
present $7 per month to $11.
SERVICE CONNECTION CHARGES
Charges for establishing new telephone service or
having a telephone moved would also increase. Pacific is
proposing to implement a new charge plan for services based on
work performed. Examples of the proposed one-time charges for
establishing telephone"service, as well as the current charges,
are listed below:
Present* Proposed
Residence Access Line
o Flat $23.00 $35.00
o Measured $23.00 $25.00
Business Access Line $34.75 $53.00
Complex Access Line (and $66.40 $85.00
Trunks)
Semi -Public Coin $77.40 $189.00
Business Foreign Exchange
o Contiguous $96.20 $395.00
o Noncontiguous $143.20 $635.00
*Present charges reflect a combination of certain
existing Multi -Element Charges.
4445A 5
Other nonrecurring charges would be established which
range from $3.00 to $20.00 for residence customers, and from
$5.00 to $40.00 for business customers. Complex service
nonrecurring charges would also be established and would range
from $30.00 to $85.00. Optional customer premises work would
be billed based on time and labor charges.
LOCAL USAGE
Pacific's Zone Usage Measurement ("ZUM") plan for
billing local calls up to 16 miles in the San Francisco and
Los Angeles areas would be expanded to include the Orange
County, Sacramento and San Diego metropolitan areas.
In addition, the Los Angeles area and part of the North County
area of Sar. Diego would be affected. This proposal will either
increase or decrease the size of certain local calling areas in
the Orange County, Sacramento, and San Diego areas.
Zone 1 (calls within 8 miles) daytime calls would
increase fr.-)m 3 cents to 4 cents for the first minute.
For each additional minute :ter the call, the rate would remain
at the present level of 1 cent per minute.
Zone 2 (calls from 9 to 12 miles) - daytime calls
would increase from 6 cents to 10 cents for the first minute
and 3 cents to 5 cents for each additional minute.
Zone 3 (calls from 13 to 16 miles) - daytime calls
would increase from 8 cents to 13 cents for the first minute
and 5 cents to 7 cents for each, additional minute.
4445A 6
The current discount of.30% for calls placed during
the evening rate period (5:00 p.m. to 11:00 p.m.), and 60% for
calls placed during the night rate period (11:00 p.m. to
8:00 a.m.) and on weekends and holidays, would continue to
apply.
In all other areas that currently have measured
service, usage charges identical to those stated above for ZU M
Zone 1 would be in effect for local calls Fri example, the
present daytime rate for these areas is 5 cents for the first
5 minutes and 1 cent for each additional minute, compared to
the proposed rate of 4 cents for the first minute and 1 cent
for each additional minute.
LONG DISTANCE SERVICE
Pacific proposes to reduce certain initial -minute and
additional -minute message telephone service rates within
California. The company also seeks to apply the proposed
message telephone service rate schedule to prepaid coin calls
(requires an operator to ask that coins be deposited before the
call is placed). This change would reduce the initial period
for prepaid coin calls from 3 minutes to 1 minute.
Additionally, a service charge of 25 cents or 50 cents
(depending upon the distance of the call) would apply to all
prepaid coin telephone calls.
4445A 7
o
PUBLIC AND SEMI-PUBLIC TELEPHONE SERVICE
Pacific proposes its first increase since 1952 in the
charge for a local telephone call placed from a coin
telephone. The increase to 25 cents - from the current
10 cents - would apply only in those areas where a coin is not
needed to get dial tone to contact the operator, or to place
emergency calls. Pacific is proposing to increase the monthly
rate for semi-public telephone service from $13 to $25.
FOREIGN EXCHAN -C SERVICE
Pacific proposes to increase Business Foreign Exchange
service connection charges to equal the actual cost of the
connection. Monthly charges for mileage applicable between
adjacent exchanges would increase on the basis of a revision in
the way mileago is measured. Current and proposed Residence
and Business Foreign Exchange monthly rates are shown below:
Foreign Exchange Monthly Rates
Present Proposed
Residence Foreign Exchange
o Flat Rate Service $8.50 $31.00
o Measured Service $4.65 $22.50
Business Foreign Exchange
o Measured Service $15.50 $19.50
Pacific is recommending that Residence Foreign
Exchange Service, which has experienced a reduction in demand
during recent years, should no longer be available for new
customers, but would remain in place for existing customers.
4445A
L
OPTIONAL RESIDENCE CALLING PLANS
Pacific proposes to increase the current usage charges
for ORTS/OCMS (Optional Residence Telephone Service/Optional
Calling Measured Service) from 50 percent of the toll rate
(on toll routes) to 75 percent of the applicable toll rate.
Adjustmei.ts to certain ORTS/OCMS monthly rates and changes in
calling allowances are also proposed as are identical usage
charges for both ORIS and OCMS.
CUSTOM CALLING SERVICE
Rates for Custom Calling Service such as Call.Waiting
and Call Forwarding would be uniform for individual features
and packages that combine features. Identical rates are
proposed for both busin,,ss and residence customers.
VERIFICATION/INTERRUPT SERVICE
An increase from 25 cents to 50 cents is proposed for
Verification Service - when an operator is asked by a customer
to verify that a particular line is busy. Pacific also
requests that the rates for Interrupt Service - when an
operator interrupts a conversation at a customer's request to
Pacific proposes to increase the monthly rates charged
for most private line services which are primarily used by
large businesses and burglar alarm companies. Additionally,
Pacific proposes increases to recover the full cost of
nonrecurring charges for private line services.
DIRECTORY ASSISTANCE CHARGING
Pacific is recommending an increase in the rates
charged for business and residence users of directory
assistance. The current charge of 15 cents per call beyond the
current allowance of 20 cabs per line per month would increase
to 30 cents. Additionally, Pacific proposes to reduce the
number of unbilled calls for residence customers to 3 per month
and to eliminate the monthly allowance for business customers.
OTHER SERVICES
o Propose an increase from $2.50 to $3.00 in the surcharge
for person-to-person calls and an increase in the surcharge
for conference calls.
o Increase rates for flat rate business trunks from $21.75 to
$28.50.
4445A 10
o Prcpose a new charge of $3 per occurrence for customers who
ask for operator assistance to contact a party who has a
nonpublished number.
o Establish a late payment charge of 1.5% or $1.00, whichever
is greater, on the unpaid balance of customer bills.
o Increase the charge for a returned check from $5.25 to
$6.00.
o Increase rates for Remote Call Forwarding from $16.00 to
$iB.00.
e Propose elimination of the Vacation Rate discount.
o Increase rates for additional directory listings from
40 cents to 50 cents for residential customers and from
75 cents to $1.00 for business customers.
o Propose reduction of the present 6.668 billing surcharge
and elimination of the current 5.48 surcharge (applied to
certain terminal equipment, private line and other
services).
Specific rate increases (in dollar and percentage terms) are listed below:
Basic Exchange Services
Residence Lines..........
Business Lines...........
Multi -Party ..............
Semi -Public Coin.........
Zone (ZUM) and Measured
Local Usage ................
Local Coin Usage............
Service Connection Charges
Residence ...............)
Business ................)
Complex .................)
Premises Activity........
Foreign Exchange Service....
Private Line ................
Long Distance and
Related Services...........
Optional Calling Plar►s
(ORT5, OCAS) ..............
Custom Calling Service......
Late Payment Charge
(New Charge) ...............
Return Check Charge.........
Remote Call Forwarding......
Verification/Interrupt......
Directory Assistance........
Nonpublished Number Charge
(New Change) ...............
Vacation Rate Elimination...
Directory Listings..........
5.48 Surcharge Elimination..
Billing Surcharge Reduction.
Estimated Amount
(Millions)
Amended
Estimated
Current
Application
Average
Application for
to Reflect
% Change
1983 Operations
1984 Operations
In Revenues
$474.1
$513.5
$95.6%
109.9
112.4
57.4%
5.1
5.3
141.78
8.6
9.4
78.8%
109.6
131.0
30.6%
77.4
79.7
97.88
31.7
48.88
60.7
6.5
67.18
82.6
213.3%
0
37.4
87.78
25.8
32.9
34.28
0
314.1
174.6%
(72.0)
(71.4)
(4.88)
21.3
11.4
13.98
11.9
12.2
18.8%
0
34.8
N/A
0
0.3
14.38
0
0.8
12.58
5.3
6.1
113.9%
0
104.8
468.98
0.2
0.2
N/A
0
13.9
290.1%
0
6.2
62.01
0
(75.2)
N/A
0
(152.5)
N/A
Total .................... $837.9
$1248.0
The above amounts exclude the access charge requests of $457 million for business and
residence interstate access charges and $288 million for business and residence
(excluding Lifeline) intrastate access charges to be paid as flat monthly rates by
all customers.
12
All of the amounts shown above are estimates.
The final amounts proposed by Pacific for its intrastate access
charge tariffs are dependent upon further FCC action.
In addition, all final rate determinations applicable to
intrastate access charges and the Amendment to Application for
an increase in rates will be made by the CPUC after hearings
are ►zeld. The CPUC may grant rates different from those
requested, and the rate changes authorized may be in different
classes of service and/or higher for those classes of service
listed.
The effect of this filing is to increase the Company's
pending request for rates from $838 million to approximately
$1.3 billion. This July 5, 1983 request would increase
Pacific's total intrastate revenues by 21.9 percent. The rate
changes propoasd by the Company, would have an estimated impact
on the average residential customer's monthly bill of
approximately $7.34. These increases are, in addition to the
proposed intrastate residential access charge (excluding
Lifeline) of $2.10 and the proposed intrastate business access
charge of $4.25; and, the minimum interstate residential access
charge of $2.G0 and the minimum interstate business access
charge of $4.00.
A copy of the Application for authority to adopt
intrastate access charge tariffs and supporting exhibits may be
examined at Pacific's principal public offices or at the
4445A 13
offices of the CPUC set forth below. A copy of Pacific's
Amendment to Application for an increase in rates and
supporting exhibits will also be available at these locations.
Inquiries and comments relative to these matters, including
requests to receive notice of date, time and place of any
hearings, may be directed to the CPUC offices at:
Californ4a Public Utilities Commission
350 McAllister Street
San Francisco, CA 94102
California Public Utilities Commission
107 South Broadway
Los Angeles, CA 90012
A copy of the Application for authority to estahlish
intrastate access charges and supporting exhibits, as well as
exhibits in support of the Company's rate increase in the
consolidated proceedings, will be made available upon
submission of a written request to:
The Pacific Telephone and Telegraph Company
140 New Montgomery Stre"t, 17th Floor
San Francisco, California 94105
Attention: G. W. McBee