Courtesy of TBE, The Big Experiment, Selkirk, NY


                        Docket No. 8387
 
Reginald A. Hirsch, et. al.       |    Before the Public
vs.                               |    Commission of
Southwestern Bell Telephone Co.   |    Texas
 
                Intervention By Bruce Scott Penny
 
To the Honorable Commissioners of the Public Utilities Commission
of Texas:
 
    Comes now, Bruce Scott Penny to file this formal intervention
in Docket Number 8387 before the Public Utilities Commission of
Texas, hereinafter referred to as "PUC".
 
                                  I.
                          Parties and Notice
 
    Intervenor, Bruce Scott Penny, is an individual formerly
operating both commercial and hobbist bulletin board systems
(BBS) in Houston, Austin and Corpus Christi, Texas.  Peak line
count approximated 60, 1MB, ESSX-30 class lines.  Intervenor has
been a party in PUC Dockets # 8037 and # 8075 dealing with SWB's
multi-line pricing policies.  Intervenor is currently the
plaintiff in a Federal DTPA suit (G-88-402) against SWB on appeal
to the 5th Circuit Court, seeking a determination of
jurisdiction. Intervenor is a stockholder in SWB Corporation.
 
    A copy of this intervention is being filed with Mr. Philip
Holder, Secretary to the PUC and Chief Hearing Officer, Public
Utilities Commission of Texas, 7800 Shoal Creek Blvd., Suite
400N, Austin, TX 78757.  A copy is also being sent to Mr. Jon Dee
Lawrence, Vice President and Assistant General Counsel for SWB,
1616 Guadalupe, Suite 600, Austin, TX 78701.  An additional copy
is being sent by U.S. Mail to Mr. Reginald Hirsch, 1980 Post Oak
Blvd., Suite 1780, Houston, TX 77056.  Notice of this
intervention will be forwarded to each of the intervenors when
names and addresses become available.
 
                                II.
                        Statement of Facts
    The following facts are limited to items relevant to Docket
8387.  Exchanges with SWB management and PUC Staff on the topic

of BBSs date to March, 1987, and comprise approximately 100
documents.
 
    In June, 1987, Intervenor submitted an informal PUC complaint
challenging SWB's selective use of off-tariff rates in multi-line
configurations.  Twenty-two days later, SWB sent notice that
Intervenor's single line, free access, hobbyist BBS would be
rerated to the commercial Information Terminal Rate (1FA).  SWB
would not consider any changes in terms or conditions of
operation as the basis for a residential classification.
However, SWB specifically refused to apply the same rate to all
other hobbist BBSs on the grounds that SWB was not equipped to
take extraordinary measures in the enforcement of their tariff.
PUC staff member, Betty Suthard, supported by the Telephone
Division Staff of the PUC, endorsed this reclassification.
Intervenor then upgraded the BBS to a multi-line configuration
and moved it to another residence, using the billing name Rande
Pate.  There, the same SWB representatives concluded that this
BBS was appropriately classed at measured residential rates
retroactively, even though no multi-line measured residential
rate existed in the tariff. Betty Suthard and the PUC Telephone
Division Staff endorsed this reclassification as well.  There
were no intervening tariff changes of relevance.
 
    In December, 1987, Mr. Jon Loehman, SWB Assistant VP, Texas
Rates and Revenues, contacted Intervenor at the request of Mr. Ed
Whitacre, Jr., Chief Financial Officer, SWB Corporation.  Mr.
Loehman's letter stated SWB's intent to move all BBSs, regardless
of commercial intent, to commercial class rates and solicited
Intervenor's support in this operation.  Mr. Loehman
"specifically and strongly" denied that this action had any
anti-competitive motive or intent.  As Mr. Loehman claimed to not
understand the anti-competitive impact, Intervenor replied with 3
letters detailing the impact and explaining the substantial
competitive advantages SWB would reap with such a
reclassification. Copies were sent to Mr. Whitacre.  Both
gentlemen declined comment.
 
    On or about June, 1988, SWB lawyers, Jose Varela and Kirk
Kridner requested that Intervenor arrange a good faith meeting
with Houston area BBS operators to discuss future telephone
pricing on BBS lines. The meeting was sanctioned by Hearings
Examiner, the Honorable Charles J. Smaistrla, in PUC Docket
#8037.  Exhibits during the meeting listed a substantial number
of BBSs operating in Houston.  SWB lawyers asked for and received
a copy of those exhibits for inclusion in their report to
management.  SWB has confirmed that those exhibits were used as
the basis for SWB's reclassification of Houston area hobbist
BBSs.
 
    At the conclusion of Docket 8037, Intervenor was informed by
Mr. Kridner that SWB would proceed with the reclassification of
all BBSs to commercial class rates, regardless of commercial
intent.  Mr. Kridner stated that if the reclassification failed,
that SWB had alternate methods at their disposal.  He did not
detail those methods.  He did assure Intervenor that SWB would
ultimately prevail in this matter.  In the meantime, Intervenor
was allowed to continue operating his hobbist BBS at measured
residential rates and was allowed to operate it under his own
name.  Two months before the general reclassification,
Intervenor's lines were rerated, increasing 4 fold.  He shut down
all lines, loaning approx. $2,000 worth of equipment and software
to another operator.  He did not reestablished service when SWB
instituted the temporary rollback several months later, persuaded
by Mr. Kridner's assurances that SWB would maintain their pattern
of conduct until successful.
 
    In October, 1988, SWB justified the hobbist reclassification
with the following wording.  SWB has authenticated this statement
as a true and correct representation of statements made by their
spokesman, Mr. Ken Brasel.
 
    Bell officials decided recently to charge bulletin board
    operators in Texas the business rate of $32.85 a month instead
    of the $13.35 residential rate after the operator of a
    for-profit board, who paid the higher rates, complained to
    the state Public Utility Commission that boards paying
    residential rates were unfair competition.
 
If SWB has provided a more substantial justification for the
reclassification of hobbist BBSs, this Intervenor is not aware of
the document.  Intervenor is also not aware of any commercial BBS
operator taking the position described.  To this intervenor's
knowledge, the complaint forming the basis for SWB's
justification either does not exist or is an intentional
misrepresentation of Intervenor's complaint.
 
    SWB's current settlement offer to Mr. Hirsch in 8387 would
render meaningless the multi-line tariff changes SWB offered in
exchange for this Intervenor's withdrawal from PUC Docket 8037.
This intervention is an attempt to reconcile differences that,
unless corrected, would lead to the reopening of 8037.
 
 
Respectfully submitted,
 
 
 
Bruce Scott Penny