PUC to Probe SBC Plans for Job Cuts

State regulators Thursday launched an investigation into SBC Pacific Bell’s planned job cuts in California, vowing to make sure the cutbacks don’t diminish the quality of service the phone company provides to two-thirds of the state’s homes and businesses.

The California Public Utilities Commission’s move, approved in a unanimous vote, follows an October pledge by two commissioners to look into the issue. The PUC’s action comes at an awkward time for the local phone company, which is hoping to win federal approval to begin selling long-distance phone service in California by the end of the year.

Among many other requirements, state and federal regulators must rule that SBC PacBell’s expansion into the state’s $10-billion long-distance market is in the public interest. Critics of the phone company could argue that customers will suffer if SBC PacBell expands into new markets even as it lays off workers.

The PUC’s concerns stem from a late September layoff announcement from San Antonio-based SBC Communications Inc., the parent of the California phone company. Citing regulatory and economic pressures, SBC said it would slash capital spending and cut 11,000 workers from its payroll, including about 3,000 jobs from its California operations.

In its Thursday decision, the agency cited company statements and presentations to regulators “that the layoffs and reduced capital spending place in jeopardy the quality of service received by customers” of SBC PacBell.

If the probe finds cause for concern, the PUC said, the agency “will take the necessary steps to ensure that service quality is not degraded” and that SBC PacBell “is able to meet its regulatory obligations.”

SBC PacBell spokesman John Britton said the PUC will find its concerns unfounded.

“SBC Pacific Bell is committed to providing outstanding service, and we do not expect service quality to be adversely affected by this position reduction,” Britton said.

The PUC’s investigation requires the phone company, along with sister company SBC Advanced Solutions Inc., to supply within seven days specifics of which jobs in which departments will be eliminated later this year and in early 2003. SBC ASI sells high-speed Internet connections that use digital subscriber line, or DSL, technology. The companies also must provide details about cutbacks at any units that serve Californians from outside the state.