Phone company executives ask Nevada lawmakers to drop caps on rates

CARSON CITY — Executives from the state’s telephone companies asked Nevada lawmakers Tuesday to drop the state’s rate caps on basic phone service, saying they were outdated in the age of digital communication.

They asked the Senate Commerce and Labor Committee to pass Assembly Bill 518, a proposal to drop state price controls on basic telephone service. Under current regulations, the large “incumbent” telephone companies — AT&T Nevada in Northern Nevada, and Embarq in Southern Nevada — are obligated to provide telephone service to all customers in their territory. The state Public Utilities Commission sets the companies’ rate for basic, bare-bones telephone service — currently $10.40 per month.

AT&T and Embarq are less regulated when selling add-on telephone services. In exchange for that lighter regulation, they must compete with other companies in the market, but AT&T and Embarq are still responsible under state law for being the “provider of last resort” to all customers at the state-mandated rate.

Under the amended AB 518, AT&T and Embarq would be relieved of those rate caps in 2012. The original bill dropped the rate caps in June 2008, a deadline that PUC officials said was too soon.

The phone companies argue that over the years, the telecommunications market has gone from monopoly to highly competitive. They want to be regulated like their competitors, who don’t have rate caps.