Cox Fights Okla. SBC Pricing Ruling

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Cox Communications Inc. has filed a state Supreme Court challenge in Oklahoma, alleging that 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 Oklahoma Corporation Commission voted 2-1 July 28 on SBC’s pricing-flexibility request. In return for diminished regulation, SBC was ordered to extend digital-subscriber-line access to 68 rural communities. If completed, this would extend DSL to all of the regional Bell operating company’s switching facilities.

Cox and the state’s cable lobby opposed the move, arguing that 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, as well as 60% of cellular customers, due to its acquisition of AT&T Wireless.

But commissioners believe the order will promote broadband deployment and competitive pricing. Commissioner Denise Bode, in a statement issued following the ruling, stressed that the OCC’s action is not deregulation, as the commission continues to exercise oversight.

The Cox challenge, filed Aug. 4, argued that commission rules dictate that 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, 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 the MSO launched the product in Tulsa about six months ago. Bialis said Cox will continue to deploy bundled services even though the company is worried about anti-competitive behavior from the dominant market player.

According to state policy, the OCC order is stayed, pending action on the appeal by the state Supreme Court.