Cox Challenges Okla. Ruling On Rival SBC

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Cox Communications Inc. has filed a state Supreme Court challenge in Oklahoma, alleging the state’s utility regulators violated their own rules in a proceeding late last month that gave landline pricing flexibility to SBC Communications Inc.

The operator also petitioned the Oklahoma Corporation Commission on Aug. 4 to reconsider its own order.

The OCC voted 2-1 on July 28 on the SBC pricing flexibility request. In return for diminished regulation, SBC was ordered to extend digital-subscriber line access to 68 rural communities. If completed, this will extend DSL to all of SBC’s switching facilities.

Cox and the state’s cable lobby opposed the move, arguing there is insufficient competition to justify deregulation.

Dave Bialis, Cox’s state vice president and region manager, noted that SBC controls 99% of local exchanges and 60% of cellular customers, after Cingular Wireless’s acquisition of AT&T Wireless. [SBC and BellSouth Corp. are partners in Cingular.]

But commissioners believe the order will promote broadband deployment and competitive pricing. Commissioner Denise Bode stressed that the OCC’s action is not deregulation, for the commission continues to exercise oversight.

The Cox legal challenge, filed Aug. 4, claims commission rules dictate the OCC examine the cost of their decisions. “They need to show that information so the floor will be known,” Bialis said of SBC’s pricing structure. As it stands, he said, competitors have no idea what an appropriate interconnection charge would be, for instance.

Cox has offered telephone service for about 10 years in Oklahoma City and launched it in Tulsa about six months ago. Bialis said Cox will continue to deploy bundled services even though it’s worried about anti-competitive behavior from the dominant market player.

Per state policy, the OCC order is stayed, pending action on the appeal by the state Supreme Court. The OCC has scheduled a reconsideration hearing for Sept. 7.

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