Regulators step up probe of Nevada Bell owner

Monday, June 18, 2001 | 11:12 a.m.

SUN STAFF AND WIRE REPORTS

WASHINGTON -- U.S. regulators said they are investigating more admissions by SBC Communications Inc. that it filed false information as it sought government approval to sell long-distance phone service in Kansas and Oklahoma.

SBC owns Nevada Bell, which provides phone service in Nevada outside of the Las Vegas metro area.

Nevada Bell wants to offer long-distance service to Nevadans -- a request opposed by competitor AT&T, which claims Nevada Bell hasn't opened its local markets to competition.

SBC is also seeking permission to compete in the Las Vegas local phone market and it operates the Cingular Wireless network.

On April 13, SBC told the Federal Communications Commission it submitted incorrect information on fast Internet lines and the agency started investigating.

In a filing with the U.S. District Court of Appeals for the District of Columbia last week, the FCC cited a June 8 letter where SBC said details about computer systems rivals use also may be inaccurate. The agency said it is looking into that data.

SBC, which has sold long-distance service in Kansas and Oklahoma since March, is working with the FCC to evaluate information it provided on operations in both states, said spokesman John Emra. The company hasn't been told of an expanded review in Kansas or Oklahoma, added spokeswoman Saralee Boteler.

Depending on the FCC's findings, the second-largest U.S. local-phone company may face fines or be required to stop providing long-distance service in those states.

SBC is prohibited from selling long-distance service until it proves to U.S. regulators that local phone markets are open to rivals. It won approval to enter the $6.2 billion Texas long-distance market last June. It got permission for Kansas and Oklahoma, worth a combined $400 million a year, in January.

Separately, the FCC is studying data submitted by the San Antonio-based carrier for approval to sell long distance in Texas, where it now has more than 2 million customers, and in Missouri, the Wall Street Journal reported, citing people familiar with the matter. SBC withdrew its Missouri application June 7, a day before it told the FCC it may have provided incorrect data in the Kansas and Oklahoma proceeding.

The company is unaware of other investigations into its long-distance applications, Emra said. FCC Enforcement Bureau spokesman John Winston declined to comment.

Analysts said investigations don't signal that SBC has intentionally deceived the agency. Applications to sell the service often contain tens of thousands of pages and may have inadvertent errors.

Blake Bath, an analyst at Lehman Brothers Inc., said in a note to clients that talk about the commission pulling SBC's authority to sell long-distance service, especially in Texas, "seems incredibly far-fetched.

Competitors have urged the FCC to impose strong penalties to send a signal to the other regional carriers -- BellSouth Corp., Verizon Communications Inc. and Qwest Communications International Inc. -- that the agency requires accurate data.