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Pac Bell ISDN rates in court

California regulators could order the telco to lower rates for its ISDN customers based on complaints that the service is not up to par.

California regulators could order Pacific Bell to lower rates for its ISDN customers based on complaints heard today that the service is not up to par.

The California Public Utilities Commission (CPUC) held hearings during the past two days regarding Pacific Bell's ISDN (integrated services digital network) rates. The company was allowed to raise the rates by up to 30 percent last March--but only on the condition that its service meet minimum customer satisfaction standards.

Pacific Bell said its customer service is improving.

But consumer watchdog groups, which contested the fee hike, told the commission today that Pac Bell's ISDN installation service and subsequent performance rates have fallen well below the set marker. If the CPUC agrees, it could suspend collection of Pac Bell's new rates or impose new service guarantees and penalties.

"The service got out of control in the middle of the year. Pac Bell had a month when almost half of its customers said its service was 'poor' or 'terrible.' That is unacceptable," said Bob Larribeau, president of the California ISDN Users' Group. Larribeau testified before the CPUC yesterday.

Administrative law judge Kim Malcolm, who is overseeing the proceedings, said a ruling on the issue can be expected by spring, but she would not speculate about the outcome.

The ISDN service benchmarks set by utility officials stated that each time the phone carrier misses an ISDN installation appointment, it must credit the customer $25. In addition, the company must reduce its installation charge by 10 percent for each day after ten business days it fails to install the service. The charge must be waived entirely if service is not installed within 15 business days.

The CPUC also made clear that "if more than 10 percent [of Pac Bell's customers] characterize any aspect of ISDN service as 'inadequate' or 'poor,' we will consider whether to take further steps as necessary."

Whether this guideline has been met is the focus of this week's hearings.

In October, the Utility Consumers' Action Network (UCAN) filed a complaint with the CPUC, stating that in May and June of last year, Pac Bell's ISDN service was rated "poor" or "terrible" by up to 27 percent of home users and 22 percent of business customers, according to the telco's own survey. Maintenance was given low marks for that time period as well. In June, for example, 29 percent of business users and 30 percent of home users said maintenance was inadequate.

Pac Bell's struggle to deliver quality ISDN service comes as other providers are pushing higher-performance Net access technologies, such as DSL (digital subscriber line). Last month, industry heavyweights Intel, Microsoft, and Compaq unveiled a plan for installing and implementing DSL technology, along with some of the nation's largest telephone providers, including US West and SBC Communications. (See related story)

The drive for DSL is underscored by the fact that both Intel and Compaq led the more than year-long dispute against Pac Bell's petition for an ISDN rate increase, on grounds that the local carrier took too long to install and repair its ISDN service.

Both DSL and ISDN use phone lines to deliver voice and data traffic faster than modems. But the so-called Universal or DSL-lite technology is gaining popularity because it delivers information significantly faster. DSL also doesn't require the installation of additional equipment at the user's location--which has been the cornerstone of complaints about Pac Bell's ISDN service.

"It's not a good sign that Pac Bell is having so much trouble with this," Larribeau said. "It shows a big difference in the way computing companies and telcos deploy their products. Every time Pac Bell reaches another level of growth they seem to fall on their face."

Pacific Bell defended its service before the CPUC, stating that it was continuing to strive toward better performance and that its numbers have improved. The telco argued that more current survey results show an increase in customer satisfaction. However, the company would not comment on the proceedings today.

"The most important finding in my analysis of this data is that customer perception of overall ISDN service quality is improving," stated Peter Cartwright, senior research analyst for Pacific Bell, in his written testimony. "The last three months showed statistically significant gains in business and residential installation, and also in business repair. Residence repair has also improved, but to a lesser extent."

Still, Pac Bell's November study shows that 16 percent of residential ISDN customers and 12 percent of business users rated provisioning as "poor" or "terrible." Eleven percent of business and home users gave the same rating for maintenance.

"We're suggesting that the CPUC require Pac Bell to require monthly reports reflecting the number of installations missed, and other objectives. We're also suggesting that we be funded to continue monitoring this on our own by polling ISDN users," Larribeau said. "And any line that is not up when the installer leaves, we recommend that Pac Bell be required to refund the installation fee and give the first three months of service at no charge."

UCAN is calling for more drastic measures. "We're going to ask the judge to suspend the rate increase until Pac Bell can show at least three months of compliance for what the judge has benchmarked as satisfactory service for ISDN," Barry Fraser, staff counsel for UCAN, said today.

"Were not even talking about 'good' service," he added. "We're just asking for an acceptable level of service."