Public, rivals to have say on Sprint rate hike

Malcolm Hall

Thursday, Feb. 7, 2002 | 10:52 a.m.

Competing telephone providers and consumers of Sprint Corp. services will receive plenty of opportunity to comment on the company's request to increase rates in the Las Vegas area by nearly $90 million a year.

Unlike the contentious Nevada Power Co. electric rate cases that are pending, some local Las Vegas phone service providers, like Pittsford, N.Y.-based Mpower Communications Corp., generally support Sprint's request for more money from ratepayers. Others are critical or less committal.

Mpower, Cox Communications Inc., WorldCom, Pac-West Telecomm and AT&T Nevada received Public Utilities Commission of Nevada permission to intervene in the case during a pre-hearing conference on the case Wednesday.

Sprint filed with regulators on Dec. 30 to increase Southern Nevada rates by $89.8 million to recover a portion of what it says is an annual revenue deficiency of $100.3 million.

Citing serious financial problems, Sprint said the increase is necessary for it to receive a fair rate of return, continue making capital investments and pay expenses needed to operate its telephone network in Southern Nevada.

Marilyn Ash, counsel for Mpower, said the company leases from Sprint "last mile" services -- the actual wires that connect the provider to homes and businesses. Ash said Mpower is concerned that Sprint's rates cover the company's costs of service.

"We compete with them so our rates are not likely to be higher, but if their rates don't cover their costs it makes it harder for us," she said in a later interview. "In general, we would be inclined to support their rate increase, certainly a rate increase, not because we're anti-consumer but because competition offers customers so many more choices."

Cox Communications, meanwhile, is taking a wait-and-see approach to the rate case and has yet to take a position, said Steve Schorr, vice president of public affairs.

"We're in a competitive marketplace with them with a number of competitive products, including high-speed data," he said "But we want to make sure they're not seeking to increase their position in competing products on the backs of the everyday ratepayer. We'll take a look at their case before we decide to do anything."

Other interested parties generally say any changes in Sprint's rate structure would affect their own rates as well since they buy or lease various services from Sprint.

In its petition to intervene, WorldCom Inc. said it has a substantial interest in the case because Sprint is proposing increases to long distance and intrastate access charges, as well as special access fees.

"These services are among those proposed for increase in Sprint's filing and will directly affect petitioner and petitioner's cost of doing business with its own customers," WorldCom said.

WorldCom spokeswoman Carolyn Berthelette said Sprint's intent to increase access charges is counter to industry trends.

"As regulators across the country have begun to aggressively ratchet down access charges, it seems out of step that Sprint wants to raise them," she said. "Reducing access charges will result in lower long-distance rates and thus create clear consumer benefits. We are reviewing Sprint's filing now and will formulate our full response in reply comments."

Long distance provider AT&T Corp. said it "would be affected by decisions in this matter relating to increases in retail rates or access charges."

Similarly, Stockton, Calif.-based Pac-West Telecomm said the proposed increases to its retail services "will therefore directly impact petitioner's resale of such services."

During Wednesday's conference, Commissioner Adrianna Escobar-Chanos established a series of consumer sessions in the case, telling Sprint representatives she would prefer more sessions rather than fewer and that they be held over a broader area of the Valley.

Sprint had proposed two sessions on March 21, one in the morning at the Clark County Government Center and the other in the afternoon at the Winchester Community Center.

But Escobar-Chanos quickly nixed that idea, saying recent consumer sessions on Nevada Power's rate case had been very helpful to the commission and that she would rather err on the side of involving more of the public in the process.

"My concern is that many people can't make it during the day," she said. "Also, this city is spreading out like a metropolis and so we need evening sessions in Summerlin, at Winchester and in Henderson and North Las Vegas."

Sessions will take place in those areas from 6 p.m. to 8:30 p.m. on four consecutive days March 18-21. Exact locations will be announced later in bill inserts and newspaper ads.

Under Sprint's proposal, residential basic services would increase $6.90 to $15.95 per month over the current price of $9.05. With federal and local taxes included, it would total $22.27.

The company also wants to raise prices for business basic services by $4.70 per month to $22.95, and to increase rates for other services such as custom calling features, the Lifeline local service credit and interstate calling.

If approved, the new prices would take effect July 1 and remain in effect at least three years.

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