Major Nevada telephone regulation bill advances

CARSON CITY -- Measures to lower the monthly telephone bills for an estimated 140,000 families in Nevada and to continue the drive towards deregulation of the telecommunications industry are on their way to final passage in the Senate, probably this week.

Fred Schmidt, chief deputy attorney general in charge of the state Bureau of Consumer Affairs, said Monday SB487 will require telephone companies to enroll everyone who is eligible for a $5.25 a month discount on basic service.

At present customers have to ask to be enrolled in the "lifeline" rate, which gives reduced rates to customers. The bill will require the state to send the telephone companies every six months a list of people who qualify with low incomes to be eligible.

"There are less than 10,000 enrolled statewide now," says Schmidt. That's 7 percent. "We estimate there are 150,000 eligible households in Nevada." And the largest number, he said, is in Las Vegas where less than 5 percent of those eligible are signed up.

The bill also provides reduced costs for poor people for a telephone hookup.

The money to reimburse the telephone companies will come from the federal government and Schmidt estimates that will be $6 million a year. "We want to take advantage of the money so the dollars are not just being provided to California and other states."

SB487 was approved by the Senate Commerce and Labor Committee last week. Also passed by the committee was SB440, a bill to further open the telephone industry to competition.

Committee Chairman Randolph Townsend, R-Reno, said under SB440 "Consumers will see things they have never seen before and at rates they have never seen before. There will be greater access to new products and services."

Basic rates for residential and small business customers will remain the same and still be governed by the state Public Utilities Commission until there is competition in this area. But local telephone companies will have more freedom in marketing other services like call waiting and caller identification. And it will be permitted to bundle the service as a package for possible discounts.

The committee decided to merge SB207 into SB440 to handle all of the telecommunication area.

Scott Craigie, representing Sprint, said new on the horizon is linking of telephones with ATMs at banks. They would be tied to a central clearing house and provide more services than are now available.

This merged bill, Craigie added, will ease the entry of outside companies to come into the local markets to compete. He said alternative carriers have tapped into 7 percent of Sprint's business in Las Vegas. And he said these "aggressive" companies probably will siphon some more customers.

But Sprint, by the same token, could move into the Reno market, now dominated by Nevada Bell.

James Endres, representing AT&T, said the combined bill "strikes a balance" in moving towards competitive markets. The bill allows the public utilities to adopt rules to encourage competition in the local telephone markets and the state agency has the power to impose fines if a local company refuses to grant equal access to the lines for an outside firm.

The PUC is working on regulations now to further open up the local markets. And the local companies have authority to enter the long-distance business when they allow open competition.

"We're trying to achieve parity in the local markets," Endres said.

But he said, "Until there is effective local competition, you can't totally abandon regulation," referring to the continued control by the PUC over basic telephone rates.

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