III. Commission Decision Eliminating
Regulation of SBC Retail Prices

On August 30, 2006, the Commission adopted Decision (D.) 06-08-030 which substantially changed rate regulation for California's largest incumbent local exchange carriers, including SBC, by adopting a Uniform Regulatory Framework. With the objective of symmetrically regulating all providers of local exchange service, the decision eliminated all retail price regulations for all business services. Retail price regulation for residential service, with the exception of basic service, was also eliminated. The existing price caps on basic residential service will remain in place until January 1, 2009, after which SBC will have unlimited authority to set prices for basic residential service. Geographically averaged residential basic service rates will no longer be required. The Commission's decision also recognized two on-going proceedings that will address basic residential service provided pursuant to the Commission's low income program, Lifeline, and California High Cost Fund B subsidized service.

The decision also relaxed the procedural requirements for the largest incumbent local exchange carriers when offering new services and filing tariffs. SBC can now provide new services with full pricing flexibility with an advice letter effective one day after filing. The carriers were also authorized to allow all tariffs to go into effect on a one-day filing, but any tariffs that impose price increases or service restrictions require a 30-day advance notice to all affected customers.