Neal questions benefits of Nevada phone deregulation

Friday, Oct. 2, 1998 | 11:49 a.m.

A legislator is questioning whether residential telephone customers are reaping the benefits of deregulation in Nevada.

Sen. Joe Neal, D-North Las Vegas, said based on his own experience with local telephone service, the benefits of deregulation in the telecommunications industry have passed by common people.

"I don't think every citizen is seeing the benefits the big resorts and the hotels are seeing," Neal said in a legislative utility oversight committee meeting on Thursday.

Lawmakers received a quarterly update from members of the Public Utilities Commission of Nevada on electric industry restructuring and telecommunications deregulation.

Commissioner Tim Hay told the panel that Southern Nevada has one of the nation's highest percentages of consumers who have switched from existing monopolies to their competitors for local telephone service.

In Sprint's coverage area, about 7.5 percent of business lines and 2 percent of residential lines have made the switch to a competitor. Hay said the rate in most regions is a fraction of 1 percent.

Of the approximately 550,000 residential lines in Southern Nevada, about 7,800 have been picked up by competitors, Hay said. He attributed the larger-than-usual rate in the Las Vegas area to aggressive marketing by Sprint's two biggest rivals, MGC Communications and Nextlink.

Hay acknowledged that large business customers have benefitted the most from the competitive environment and that some of those advantages "have yet to emerge in the residential market."

Hay said "some patience may be in order" as more competitors offer different alternatives to customers.

"The big thing is that consumers now have a choice," said Lou Emmert, general manager of Sprint's Nevada operations. "They can compare and choose what best meets their needs. The rates have come down for long-distance service and it's just a matter of time before that happens on a local basis."

Hay said it's too early to determine the effect of a new development -- Sprint's "one-stop shopping" for local and long-distance service. Commissioners allowed the local operation to market long-distance service earlier this year for the first time.

That had been forbidden while Sprint was the monopoly serving Southern Nevada. The company was authorized to offer both services in May. MGC also offers both local and long distance, but Sprint was delayed from being able to sell long distance because regulators felt the company had a large competitive advantage as the local monopoly.

Choice and shopping for service was an issue that concerned legislators in the electrical industry.

With the state less than 15 months away from restructuring to a competitive marketplace for electrical utilities, legislators said they have received the most feedback on how consumers are supposed to choose an electricity provider if they are satisified with the service they have.

According to rules under consideration, consumers would have to choose a provider. If they don't, a company would be selected for them.

"There's nothing in place for people who just want to keep the provider they already have," said Sen. Ann O'Connell, R-Las Vegas. "In the public appearances I've made, consumers are asking, 'What do I do if I'm happy with the service I'm getting?' "

Commissioner Judy Sheldrew said the PUC is attempting to provide a competitive environment that isn't biased toward any particular provider.

A related matter that upset some lawmakers is that although the rule-making process hasn't been completed on the issue of the PUC selecting a provider for a consumer that doesn't make a choice, a brochure published by the commission says the agency will.

Legislators warned that if the PUC changes direction on the plan, it would cost twice as much to correct misinformation that already has been distributed.