November 7, 2002 PUC: 106

Media Contact: PUC Press Office, 415.703.1366, news@cpuc.ca.gov

PUC OPENS INVESTIGATION INTO WHETHER SBC JOB AND SPENDING CUTS WILL HARM CUSTOMER SERVICE

The California Public Utilities Commission (PUC) today opened an investigation into the impacts on California consumers of the recent announcement by SBC Communications, Inc. (SBC), parent of SBC Pacific Bell, that it will be laying off 11,000 employees nationwide and considerably cutting capital expenditures.

SBC has publicly stated that 9,000 of its planned job cuts will take place in the final quarter of 2002, with the remainder to occur in early 2003, with approximately 3,000 jobs eliminated in California. Statements by SBC representatives to the media, as well as to the Commission and other regulatory agencies, indicate that the layoffs and reduced capital spending may jeopardize the quality of service received by the customers of Pacific Bell.

The investigation will focus on gathering information to determine:

· The basis for the statements by SBC and Pacific Bell to the effect that the cutbacks may or will harm service quality;

· Whether the cutbacks are likely to lead to diminished service quality in California in either the short- or long-term; and

· Whether the cutbacks are likely to diminish the ability of Pacific Bell and its affiliates to meet their obligations to furnish timely information to the Commission, such as in the context of audits, general information requests, service quality data, and other monitoring reports.

The Commission will require Pacific Bell and SBC Advanced Solutions, Inc., which provides Digital Subscriber Line (DSL) service, to respond to requests for information within seven days from today, and will solicit comments from any parties who choose to participate in this proceeding within 17 days from today.

After having obtained the necessary information and obtaining comments from all parties, the Commission will have a formal record to determine what, if any, steps are appropriate.

The Public Utilities Code requires that the Commission ensure that public utilities furnish high quality telecommunications service in California.

Pacific Bell is California's largest incumbent carrier, serving over two-thirds of all households and businesses in the state. The order states that, when Pacific Bell itself "announces that measures of its own choosing may jeopardize service quality, the Commission has a responsibility to the state's residents and businesses to investigate whether and how service quality will be affected."

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