States’ rights emerge as issue in Sprint case

Grace Leong

Tuesday, Nov. 16, 1999 | 11:48 a.m.

The Nevada Public Utilities Commission says recent U.S. Supreme Court rulings block challenges to its authority to regulate the rates that Sprint charges its competitors for leasing its lines in Las Vegas.

The PUC filed a motion in U.S. District Court Monday asking that it be dismissed as a defendant in a suit filed by Sprint in which Sprint is seeking phone line lease rates that are higher than those approved by the PUC.

The PUC said the 11th Amendment to the U.S. Constitution gives it immunity from lawsuits over the issue.

The 11th Amendment blocks suits in federal courts against states by citizens of another state or by citizens of foreign nations.

In its motion, the PUC argued its primary aim is to protect consumers and to ensure state-regulated monopolies in Southern Nevada -- including Sprint -- provide reasonably priced local telephone services.

The PUC said it has achieved this by approving what it believes to be fair and final "loop access" rates to be used in Sprint's 50 leasing agreements with its competitors in Nevada. It said these prices will be incorporated into existing leasing agreements and future arbitrated ones.

A loop is the line that connects Sprint's switch or local telephone exchange with customers' premises.

"In June 1999, the Supreme Court came out with several decisions that define state immunity under the 11th Amendment, and since then a few district courts have agreed with state commission arguments on the 11th Amendment immunity," said the PUC's assistant general counsel, David Noble.

But Sprint disputed the state's argument.

"Congress clearly intended for the federal courts to have jurisdiction in legal matters related to the Telecommunications Act. We remain confident that our case ... will be heard on the federal level," said Sprint spokesman Rob McCoy.

"The PUC is saying federal court can't have jurisdiction over the state. But we're saying when Congress wrote the Telecommunications Act, it clearly intended for federal courts to have jurisdiction relating to that act," McCoy said.

Sprint, which disputed the PUC's information used to calculate lease costs, sued the state and five potential Las Vegas competitors on Oct. 4.

Sprint said the PUC had "without rational explanation or justification" cut the loop access rate from $13.89 to $10.83 per month, a rate it says does not allow it to recover the costs of building and maintaining the loops.

Under the Telecommunications Act of 1996, which is designed to foster competition in the local telephone service markets, existing telecommunications providers like Sprint must offer the use of their lines to competitors to help them reduce their costs of market entry and operations.

Sprint named as defendants in its Oct. 4 suit the PUC, Commissioners Don Soderberg, Judy Sheldrew and Michael Pitlock; AT&T Communications of Nevada Inc., Nevada Bell, Nextlink Nevada, MGC Communications Inc., the Nevada State Cable Television Association, Cox Communications Las Vegas Inc., the Office of the Attorney General, the Bureau of Consumer Protection and the Utilities Consumers' Advocate.