Back in 2005, you probably received the innocuous notice in the mail from SBC informing you of a nominal 98-cent monthly charge for undergrounding of power lines. Say what? Power lines?

Hundreds of thousands of customers should be asking the same thing -- aren't we already paying for this? Why should we have to pay for undergrounding phone lines? What the heck is going on?

Well, you can ask the San Diego City Council that same question. In December 2003, the Council cut an unpublicized deal with SDG&E to increase under-grounding of power lines and added a hefty 3.5% surcharge to all SDG&E customers' bills to pay for it. But the Council didn't consider -- even though UCAN warned them about it -- that all of the phone lines that share the power poles with SDG&E would be affected by it.

The City got the California Public Utilities Commission (CPUC) to bless its unholy deal with SDG&E but the regulators didn't address the question that UCAN (and Pacific Bell/SBC) asked: What about the phone lines? (Click here to read UCAN's protest to the SDG&E deal.)

Now, the City has endorsed SBC's effort to stick this new cost to all SBC customers. It cut another unheralded deal with SBC earlier this year to support a huge $125 million rate hike to pay for the undergrounding of SBC phone lines.

On April 7, 2005, UCAN filed a protest to SBC's new fee grab. (Click here for UCAN's protest). And a year later, in April 2006, we sent a memo to San Diego's new Mayor detailing the problems with the City's undergrounding policy. (UCAN's memo to be posted soon)

On April 14, 2006, UCAN filed formal testimony with the CPUC showing the inequities of the SBC/AT&T rate proposal and how it was going to result in San Diegans subsidizing AT&T's efforts to vanquish its competitors. (Click here for UCAN's testimony)

THE BOTTOM LINE....IS UGLY

The cost impacts of these surcharges upon residents are substantial. The SDG&E surcharge will cost an estimated $850 million over the 22-year build-out. SBC estimates the total cost of its efforts to comply with the City ordinance will be $125 million. The average San Diego homeowner will ultimately be charged $35 per year for SDG&E’s undergrounding and another $12 per year for SBC’s undergrounding costs. To date, the City has collected approximately $120 million in additional monies from San Diego citizens under this accelerated undergrounding program. The entire program is estimated to cost San Diegans close to $1 billion by the time the build-out is completed in 2025.

Remarkably, most customers are unaware of these surreptitious taxes. The City’s own web site declines to mention the bill surcharge amounts and, in fact, suggests that the utility is doing all undergrounding at no cost to homeowners. In its FAQ section, the City states: “the utility companies will perform this work at no cost to the property owner as long as the property owner signs an agreement to allow utility companies on to their property. “ (Click here to see the City's own explanation)

This statement is not correct, as every utility customer in San Diego (whether they have overhead utility wires in their neighborhood or not) is paying monthly surcharges for this work to be performed. If the City and SBC/AT&T have their way, residents will be paying still more soon.

UCAN believes that the San Diego public deserves to know about this almost $1 billion in City-supported utility taxes. The public will not be pleased to discover that the benefits of this program are highly questionable for most residents and that it undermines any potential for a low-cost, high-speed wireless Internet network in San Diego like the ones being developed in San Francisco, Philadelphia and other cities throughout the country. It is also notable that in the first two years of this program, the City has siphoned more than $4 million out of these surcharge monies into the City’s general fund to pay for City attorneys, engineers, and consultants – some of whom may or may not work on the undergrounding projects. When UCAN posed legal interrogatories to the City Attorney about these general fund costs, the City Attorney refused to provide an accounting.

Your voice counts too. Calls and letters to the City Council offices and CPUC, will strengthen UCAN's call for a repeal of this very questionable policy. Don't let them bury this issue!

Take Action and send emails to the City of San Diego and CPUC.