Phone decision not likely to immediately affect rates

Tuesday, June 15, 2004 | 10:37 a.m.

SUN STAFF AND WIRE REPORTS

The decision by the Bush administration last week to side with the regional Bell companies in their legal fight over the access fees they charge others to lease their phone lines has set off alarm bells among consumer groups, long-distance providers and state utility commissions.

The groups say that an appeals court decision to remove the cap on these access fees, which goes into effect today, will give the Bells a free hand to raise the prices they charge AT&T, MCI and hundreds of other companies trying to get into the local phone market. It will also push many smaller phone companies out of business, they say, and ultimately lead to higher phone rates for consumers.

But some evidence suggests that scrapping the limits on access fees may not immediately translate into more expensive local phone service. For starters, long-distance carriers have not said how much of the higher fees, if any, they will pass on to consumers.

In Las Vegas, competitive telephone providers, such as XO Communications, Mpower Communications and Nevada Telephone, all own their own switches. Some of those companies also own their own phone lines. That means those companies have limited need to lease equipment from Sprint Corp., the dominant local service provider, and can also lease equipment to other carriers.

Sprint spokeswoman Detra Page said such competition could help keep local prices down. She added that line leasing rates to those companies that own their own switches will not change.

Sprint will have rate discussions with companies that do not own their own equipment in the near future, Page said. She emphasized that no decision has been on when, if or by how much rates will increase for those companies.

Ironically, while Sprint is the dominant local provider in Las Vegas, the company is a competitive provider in most markets nationally and issued a corporate statement lamenting the Bush administration decision.