SBC to offer local phone service in Las Vegas

Tuesday, July 25, 2000 | 11:15 a.m.

AT&T

AT&T Corp. today said second-quarter profits improved nearly 10 percent to match Wall Street's tempered expectations, while the company's new separately traded wireless group posted an unexpected profit for the period.

Net profits totaled $1.75 billion or 53 cents a share for the April-June quarter, up from $1.59 billion or 49 cents a share in the same period in 1999 and even with the consensus forecast of industry analysts surveyed by First Call/Thomson Financial.

Second-quarter revenue totaled $16.87 billion, if adjusted to include a full quarter from the MediaOne, the cable TV company that AT&T acquired in mid-June. That represents a 4.5 percent increase from the combined second-quarter revenues generated last year by the same operations, including MediaOne and other businesses AT&T had not yet acquired and excluding other operations that have been sold over the past 12 months.

The parent company of Nevada Bell, which serves most of Nevada outside Clark County, is filing for permission to offer local phone service in Las Vegas.

SBC Telecom, a unit of San Antonio-based SBC Communications Inc., said it wants to serve both business and residential customers in Las Vegas in competition with Sprint as well as smaller local carriers.

Separately, SBC filed applications Monday to enter the long-distance markets in Nevada and Arkansas, setting up a battle with phone giant AT&T and at least one other coalition.

Nevada Bell, with lines into 375,000 homes and businesses in 13 of the 17 counties in Nevada, filed an application for long distance service with the state Public Utilities Commission. And it hopes the commission will support the application before the Federal Communications Commission.

Marsha Lindsey, president of Nevada Bell, said, "More competition in the marketplace will mean more choices, better service and better value for Nevada consumers." It will permit one-stop shopping for all telecommunication services, said Lindsey. It will cover local and long distance, wireless, high-speed Internet and video entertainment products.

The company said it has complied with the federal law to open its local market to competition, a requirement before it can enter the long-distance arena. The firm said there are more than 110 licensed competitors and there are resale agreements with 42 of them. "Our competitors have won 17 percent of the lucrative business market in our territory," Lindsey said.

But Jim Endres, assistant vice president for law and government affairs for AT&T in Reno, said Nevada Bell's application is "absurd."

"Despite the fact that Nevada Bell has had four years in which to meet the requirements of the Telecommunications Act of 1996, Northern Nevadans still have no choice when it comes to local telephone service," Endres said. "Lack of competition in the local service market is expensive for consumers -- who pay more and get less--and it is an extraordinary setback to Nevada's economic growth and diversification efforts."

Jeff Ostomel, head of Nevadans for Local Phone Competition, said "There is no competition here," in the local phone market. "There is plenty of competition in the long distance market and in cellular telephones."

For instance, he said long-distance companies offer free service for a month or free air miles to sign up customers. "When have you heard of Nevada Bell offering anything?" he asked.

His organization represents long distance carriers such at AT&T, ATG and MGC and some Reno area businesses that want competition.

But Nevada Bell said it has met the 14-point checklist required by the federal government before it can expand.

To date, only local telephone companies in New York and Texas have been approved to provide long distance service by the FCC. The Texas firm winning that right was a unit of SBC.

Lindsey said Nevada's territory is not as big but "customers will immediately benefit from Nevada Bell's entry."

The application has the backing of the Communications Workers of America, said Nevada Bell. Craig Hansen, president of Local 9413, said this opens the door for job growth and new opportunities for customers.