California regulators voted last week to relax restrictions on how much the state's landline telephone companies, including AT&T and Verizon Communications, may charge customers.
The California Public Utilities Commission's vote stems from the state's first major review of telephone regulation in 18 years and the new policy is meant to allow phone companies to compete better in the voice-service market against unregulated wireless, broadband, cable and Internet companies.
"Regulation needs to recognize there is a competitive voice communications marketplace," said Michael Peevey, the commission's president. "The changes we order today will enhance competition by allowing new services to be provided sooner and eliminating unnecessary government regulation."
Tim McCallion, president for Verizon's west region, applauded the unanimous vote by the commission. "When the old regulations were introduced, the wireless industry was in its infancy and few people had heard of the Internet, let alone imagined the promise it held," McCallion said in a statement. "Much has changed in the past two decades, and these new rules reflect that reality."
The commission's decision eliminates required state approval of price changes for all other business and residential rates and services. While landline and competitive local exchange carriers will be required to provide 30-day notice to customers of proposed price increases, they may go into effect the day after notices are filed with the commission. Under the new policy, prices for basic residential telephone service will be in place until Jan. 1, 2009.
