SBC calls for state deregulation

Citizens board warns consumers will pay price of plan

? The clock is ticking on what could be one of the biggest consumer battles in years in Kansas, and it has nothing to do with the price of gasoline at the pump.

SBC Communications Inc., the largest telephone company in Kansas, has asked state regulators to free the company from price controls and other regulations in Kansas City, Kan., Topeka and Wichita.

Public hearings on the proposal started Monday evening in Kansas City, and are scheduled today in Wichita and Wednesday in Topeka.

San Antonio-based SBC says it should be deregulated because the company faces big-time competition in those three markets, which would be expected to keep consumers’ bills under control. State law says former monopolies such as SBC can petition for deregulation if they can prove that local markets have become competitive, and that such competition is sustainable.

If the Kansas Corporation Commission grants SBC’s application, SBC would be allowed to price products and services without commission oversight and make “bundled” offerings of local, long distance and optional services such as caller ID and call waiting.

“All you have to do is look at the billboards, newspaper ads and in people’s mailboxes,” SBC Kansas spokesman Don Brown said of competitors’ reaching for new customers. “They are offering same or advanced technologies without pricing regulations and pulling over our customers.”

But the Citizens’ Utility Ratepayer Board, the state agency that advocates for residential and business customers, opposes SBC’s attempt.

“We do not think the market is sufficient or sustainable to discipline market prices, and consumers are going to pay the price,” said Steve Rarrick, an attorney for CURB.

SBC has nearly 1 million phone lines throughout Kansas as compared with about 600,000 for its 149 competitors combined, according to the KCC.

But the competitive landscape is changing, Brown said, as SBC faces new rivals, including cable TV, voice over Internet and wireless companies who are not regulated by the KCC.

Public hearings on SBC Communications Inc.’s proposal to be deregulated are:¢ 7 p.m. today at Wichita State University.¢ 7 p.m. Wednesday at Kansas Corporation Commission, Topeka.

“It is an entirely different world,” he said.

Rarrick said he was extremely worried about what effect deregulation would have on those who buy basic phone service, many of them elderly. There are more than 200,000 “POTS” lines, which stands for plain old telephone service, and refers to the no-frills, one line service for $15.70 per month.

Under deregulation in Ohio, Rarrick said, SBC raised rates on a variety of stand-alone services, while reducing rates on more expensive package deals.

And Rarrick said that if SBC was deregulated in the large Kansas markets, the company would seek deregulation in smaller markets, such as Lawrence.

SBC’s proposal also is opposed by AARP and several communications companies, including WorldNet LLC, a subsidiary of The World Company, which also owns the Lawrence Journal-World and Sunflower Broadband.

WorldNet operates telephone service through Sunflower’s cable lines in Lawrence, Eudora, Tonganoxie and Basehor, and has future expansion plans in the Kansas City area.

Debra Schmidt, director of telephone services for WorldNet, said it would be wrong to deregulate SBC.

“The competition is way too young to be deregulating rates, because we don’t know if the competition would be sustainable,” Schmidt said.

The decision on whether to deregulate is on a relative fast track. Once the commission receives a deregulation application, the agency has a maximum of 51 workings days to make a decision. SBC filed its application at the end of April, but last week re-filed an amended application, which started the time period over again.