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SBC Communications Inc. (SBC) Message Board

  • windyfrostt windyfrostt Sep 28, 2002 3:11 AM Flag

    Regulators dodging bullets

    Regulators say they are not part of SBC's problems
    Sep 27, 2002 (Knight Ridder Newspapers - Knight Ridder/Tribune News Service via COMTEX) -- Texas' top telephone regulator denied Friday that state regulations were a cause of the troubles that led SBC .......
    Whitacre complained that state regulators have set wholesale rates, which competing phone companies pay to gain access to SBC's network and enter the Texas local service market, excessively low to promote competition. The result has been weak revenues that have robbed SBC of profits, Whitacre said.
    But Rebecca Klein, chairwoman of the Texas Public Utility Commission, said, "It is likely that the company's decision is a result of economic and competitive factors, and not the result of wholesale phone rates.
    "The Texas PUC has always been objective in our review of wholesale phone rates," she said.
    Whitacre said that "in some cases, wholesale rates have been set by state regulators up to 60 percent below retail rates."
    That, Whitacre said, allowed competitors to access the Southwestern Bell network, which SBC owns, at a deep discount and then undercut SBC's rates.
    "Instead of subsidizing prices for average consumers, we now subsidize competitors who in turn siphon revenues out of the market," Whitacre said..........
    SBC's second-quarter profit of $1.8 billion, or 55 cents per share of common stock, was down from $2.1 billion, or 61 cents per share, in the same quarter last year. Revenues fell 3.9 percent to $13.05 billion.
    "There's just been no revenue growth in the telecom business," Ajay Mehra of Columbia Management Group told Bloomberg News.
    Under the 1996 federal deregulation law, local service carriers can access SBC's lines by paying lease charges. Those rates are set by state regulators.........