Telecoms square off on Nevada phone line regulation changes

Phone service and cable companies lined up in opposition Thursday to a bill backed by telecom giant SBC Communications to revamp phone line rules and prevent Nevada from regulating broadband services such as high-speed Internet.

A contentious, 4-hour hearing on SB400, also backed by Sprint, included gripes from long-distance carriers like AT&T and DSL providers such as MPower Communications.

The measure, similar to legislation introduced in several other states, would require the Nevada Public Utilities Commission to use an SBC-backed method for setting rates that former monopolies such as SBC, or Nevada Bell, charge competitors for leasing their local phone lines.

It also would clearly define the level of competition needed before the state can regulate residential and business line rates -- a matter now handled through commission hearings.

SBC says the bill would level the playing field for local service and protect company jobs, in part by allowing it to charge more reasonable prices for leasing its lines.

But Richard Severy, a public policy director for Worldcom, called the bill a "direct frontal attack on the consumers of Nevada."

"This bill is not about providing a level playing field," Severy told the Senate Commerce and Labor Committee. "The goal here is to level competition."

Severy and others said the bill would result in near-instant deregulation of residential and business phone service, though state PUC Chairman Don Soderberg refuted that.

"It has been drafted to clearly preserve the commission's role in protecting basic rates" for phone services, Soderberg said, adding that SBC and Sprint had consulted extensively with the commission while drafting the legislation. He worried that the PUC was now "micromanaging" competition.

Most members of the Senate panel were clearly confused by language in the bill and nuances of telecom regulation. "I need to go back to college," said Sen. Warren Hardy, R-Las Vegas.

Commerce and Labor Chairman Sen. Randolph Townsend, R-Reno, expressed full support for the measure. "I don't think this bill goes remotely far enough," Townsend told telecom representatives opposing the change.

"I don't think the debate belongs at the PUC. I think the debate belongs at the marketplace, to unleash your companies to meet that demand."

Townsend said a deregulated market would jolt competition and eventually get consumers a better deal.

But Tim Hay, consumer advocate for Nevada utility customers, warned that the bill contains "a series of trap doors, in a very complicated subject matter" that would reinforce SBC's monopoly on phone service in northern Nevada and Sprint's dominance in the Las Vegas area.

Hay noted that under the legislation's current language, the PUC could declare the Reno area a "competitive market" with SBC controlling 99 percent of all phone service.

"You'd be hard pressed to find an economist who says that's a competitive market."

Similar legislation has been adopted in Oklahoma. It was introduced but not passed by Legislatures in Kansas, Missouri and Connecticut. Other bills are pending before lawmakers in Indiana and Texas.

The committee took no action on the bill.