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Protest by TURN

  The following is a protest by TURN that was filed last week with the
  California PUC.  I am not associated with TURN in any way.  I am posting
  this solely because I received it in the mail and I have a scanner with OCR
  software, so I am doing my part to make this proceeding very open to the
  Internet community.
  I wish you guys could see the original paper copy that I received.  It is
  printed on this weird greenish off-color recycled paper that has threads in
  it almost like the paper that money is printed on, and the toner or ink,
  whatever printing process they are using, doesn't stick very well so the
  printing is light and spotty.  I bet they spend twice as much to buy this
  paper as they would on regular copy paper just to prove they are
  ecologically correct.
                      OF THE STATE OF CALIFORNIA
  In the Matter of the Application
  of Pacific Bell for Authority to
  Increase and Restructure Certain            A.95-12-043
  Rates of its Integrated Services
  Digital Network Services-.
  Pursuant to Article 12 of the Commission's Rules of Practice and Procedure,
  Toward Utility Rate Normalization (TURN) hereby protests the Application of
  Pacific Bell for Authority to Increase and Restructure Certain Rates of its
  Integrated Services Digital Network (ISDN) Services ("Application").  On
  December 5, 1995, Pacific Bell filed an application to restructure and
  increase the rates for its ISDN services.  The Application appeared in the
  Commission's Daily Calendar on December 20, 1995.  The deadline for
  protesting the Application was extended to February 2, 199 6 by ALJ Malcom.
  The desired changes are substantial, with significant implications for
  Pacific's customers.  Pacific proposes to:
  - Increase the monthly recurring charge for Centrex ISDN by $8.00;
  - Double the price for additional minutes of use for both Home and Business
  - Eliminate the wavier of installation charges for customers who commit to a
  two year term agreement;
  - Cap currently unlimited local usage for Home ISDN at 20 hours per month;
  - Eliminate the $4.00 charge for certain optional ISDN features (Hold,
  Consultation Hold, Three-way Conferencing and Call Transfer);
  - Establish new volume and term discounts; and
  - Implement a toll discount plan designed to give large toll discounts to
  ISDN customers.
  Pacific claims that these changes are needed to assure that ISDN services
  better reflect their costs and are attractive and marketable to customers.
  The changes proposed are significant.  It is unclear to TURN, how the
  proposal to significantly increase rates and eliminate unlimited usage for
  Home ISDN (analogous to residential ISDN) will make the service more
  attractive and marketable to customers.  Moreover, there has been no
  opportunity to assess Pacific's claim that the restructured prices will
  better reflect the costs of ISDN services because the cost studies were
  filed under seal.
  When Pacific filed its Application, it also filed a companion ex-parte
  motion asking the Commission to accept its cost studies under seal.
  Administrative Law Judge Econome granted Pacific's motion on January 3. TURN
  has contacted Pacific to request the cost information and has been told that
  we may receive the information under the terms of a nondisclosure agreement
  if we are a party to the proceeding.  The need to review Pacific's cost
  information is one reason that TURN is protesting the Application and is
  obtaining party status to the proceeding.
  The proposed changes to ISDN rates have the potential to dampen the use of
  innovative telecommunications and information services.  Customers who use
  ISDN do so because they need the ability-to rapidly transfer and receive
  information.  ISDN is used to access the Internet, for various on-line
  services and for telecommunications-dependent activities such as
  telecommuting.  Companies and individuals who have subscribed to ISDN did so
  under a substantially lower set of prices than those Pacific is proposing.
  The proposed rate increases may force customers to either curtail their use
  of telecommunications and information services, or abandon ISDN altogether
  and opt to use a less expensive, although technically less desirable,
  At the present time, interim local competition rules not-withstanding,
  customers have no other options for receiving a service comparable to ISDN.
  Until there is demonstrable competition, customers desiring faster speeds.
  and more bandwidth will be held captive by Pacific.  If the proposed rate
  increases were approved, customers would have two choices: either pay the
  higher rates or use a less effective service.
  Pacific's request to significantly raise price of ISDN service is ironic
  given the company's claim in several proceeding that it is facing tremendous
  competition.  The decision to double the usage rate for ISDN service does
  not appear to be the act of a, firm that is worried about competition.  The
  possibility exists that Pacific is attempting to extract monopoly profits
  from its ISDN service as a means of leveraging its position in other markets
  or subsidizing competitive services. 
  Such anticompetitive activity would be harmful to customers because Pacific
  would be able to use its deep pockets to discourage or stifle competition.
  If this were to happen, telecommunications companies with unique and
  innovative telecommunications services would be unable to compete and such
  services might never be available to customers.
  The proposed volume discounts for ISDN services are cause for concern. From
  the public information provided to support the application, it is impossible
  to tell whether the proposed volume discounts are justified by the cost
  data.  Pacific's proposal to provide large toll discounts tied to ISDN
  service may be discriminatory.  Moreover, ISDN services are currently
  classified as Category I services.  Pacific should not be granted permission
  to flexibly price these services unless and until they are reclassified as
  Category II services.  Furthermore, such price floors should be supported by
  cost data which is examined and tested by interested parties, and the
  Pacific asserts that the proposed increases to ISDN service are necessary
  because two assumptions underlying its original ISDN tariff have proved to
  be inaccurate.  First, Pacific claims that its original studies incorrectly
  estimated the percentage of ISDN customers who would be located more than 15
  kilofeet from a central office.  Pacific asserts that this percentage proved
  to be higher than expected.  Second, Pacific claims that the price for Home
  ISDN was designed to cover costs associated with a lower level of average
  usage than exists in actual practice. (Application, p. 4-5) The Commission
  and interested parties should have the opportunity to carefully scrutinize
  these claims.
  The Commission should look carefully at Pacific's proposal to double ISDN
  rates and limit flat rate residential ISDN service at a time when the demand
  for internet access is increasing.  TURN believes that such a proposal
  should not be approved in the absence of a thorough and critical review of
  the Company's justifications for its proposed changes.  Pacific's cost data
  and proposed rates must be carefully scrutinized to ensure that customers
  are not subjected to unfair and prohibitive rate increases which could harm
  the development and provision of innovative telecommunications and
  information services.
  Dated: February 2, 1996                     
  Respectfully submitted,
  Regina Costa
  Telecommunications Analyst
  Toward Utility Rate Normalization
  625 Polk St., Ste. 403
  San Francisco, CA 94102
  (415) 929-8876