Lawmakers vote to lift price caps on telephone service

A key Senate panel voted Friday for a pair of proposals being pushed by the state's largest telephone and cable companies.

One proposal, SB518, would allow the state's largest telephone companies, Embarq and AT&T Nevada, to charge any rate for basic telephone service starting in 2012. Currently, those companies are obligated to provide basic phone service to all subscribers in their territory at a state-mandated rate, currently $10.40 per month.

The companies argued that wireless telephones and high-speed Internet have made the telecommunications industry highly competitive, and the state's existing regulations prevent them from quickly bringing new services to market.

The rate cap laws were designed in an era when phone companies were considered monopolies with no competition, said Embarq general manager Kristin McMillan.

After negotiations with the state consumer advocate, the companies agreed to amendments that delayed dropping the rate caps until 2012. The original bill dropped them in mid-2008. The companies also agreed to extend the Lifeline low-income telephone service to a wider range of consumers.

In 2010, the consumer advocate will submit a report on the state of Nevada's telecommunications marketplace.

The committee also voted 3-2 to pass SB526, which would allow cable companies to negotiate their franchise agreements with the secretary of state's office, rather than local governments.

The bill would pre-empt most local regulation of cable companies, but local governments would still be able to control their rights of way and collect franchise fees.

Sen. Mike Schneider, D-Las Vegas, said he opposed the bill because it could interfere with some private developers who contract for their own cable service.

Both bill were passed unanimously by the Assembly, and now need approval from the entire Senate before going on to Gov. Jim Gibbons for his signature.