Embarq Corp., the land-line phone company spun off by Sprint Nextel Corp., thinks the answer is yes. AT&T, the dominant phone service for Pahrump and Northern Nevada, agrees.

Embarq officials point to an array of telephone-service competitors that have emerged in recent years -- cell phone services, voice over Internet protocol phone companies such as Vonage, competitive local exchange companies such as XO Communications, and cable television company Cox Communications.

But state Consumer Advocate Eric Witkoski, who said Nevada has been regulating land-line telephone companies since the 1930s or earlier, questions whether it is time to let former monopoly companies set their own rates for basic phone service.

Witkoski argues that the Public Utilities Commission or the state Legislature needs to study telephone market data to reach a sound conclusion about the level of competition.

"(If land-line telephone service is deregulated) we need to have some regulatory oversight for that transition and some safeguards to make sure that consumers are benefited and protected," Witkoski said.

Then, the Legislature or regulators should monitor the telecommunications market to make sure major competitors don't drop out of the market, giving Embarq and AT&T too much market power, he said.

Analysts question whether Vonage can survive, because Verizon in March won a patent infringement judgment for $58 million and 5.5 percent royalties on Vonage sales.

However, Embarq says it is trying to compete with regulatory handcuffs while its competitors can move quickly and with no regulatory oversight of their products and services or rates.

The local phone company must obtain approval from the utilities commission before offering new services, giving its competitors the opportunity to beat Embarq to market with similar offerings, Embarq Vice President and General Manager Kristin McMillan said.

"We're trying to establish a more fair and equitable level of regulation," McMillan said.

Nevada's Public Utilities Commission regulates telephone service. The Assembly Commerce and Labor Committee, directed by Assemblyman John Oceguera, D-Las Vegas, introduced the bill that will be considered today.

Former Consumer Advocate Fred Schmidt, who represents Embarq, said competition eliminates the need for regulation.

"Consumers are better off with competition," Schmidt said. "The purpose of rate regulation is when you have a pure monopoly, and (regulation) is a substitute for competition."

McMillan argues that because of current regulatory oversight rules, Embarq is losing market share locally.

The company's annual report shows that its residential telephone service penetration dropped to 73 percent in 2005 from 97 percent in 1997. The total of residential accounts went up every year except one. In 2005, the number of residential accounts in rapidly growing Southern Nevada dropped to 486,000 from 497,000 in the prior year, Embarq said.

Yet Embarq needs to keep much of its market share data confidential because it would be hurt if competitors had the information, McMillan said.

Embarq could solve that problem by taking evidence of market share loss to the utilities commission with requirements that the information be kept confidential. If Embarq proved to the commission that it lost 15 percent or more market share for a service, the commission could declare the service competitive and lift rate regulations on that service, Witkoski said.

Given that option, the consumer advocate wondered why the phone companies are going to the Legislature for regulatory relief.

Embarq has no guarantee that it will get a favorable decision from the commission, McMillan said. Competitors who intervene in the case could obtain access to confidential information about the company's market share, the Embarq executive said.

Embarq managers point to a utilities commission finding in May 2006 that called for ending regulation of local exchange companies such as AT&T and Embarq.

"Traditional rate cases for large telecommunications carriers have become relics of the past," the document says. "Rate cases are not practical for large integrated telecommunications companies providing services and products in a competitive marketplace." The state consumer advocate said commission Chairman Don Soderberg unfairly injected that conclusion into an unrelated utilities commission study. The study reviewed methods of calculating rates, primarily for electric and natural gas utilities, not telephone deregulation, Witkoski said.

AT&T made a surprise appearance in a hearing, arguing for telephone deregulation, Witkoski said.

Participants in the case weren't notified that telecommunications deregulation would be discussed, Witkoski said. Nor did the commission obtain data to support the conclusion that telephone companies should be deregulated, he said.

"It's not fair to rely on that (case) as a finding that the telecommunications land-line business is competitive," Witkoski said.

The consumer advocate also said Sprint Nextel Corp. promised the commission in December 2005 that phone rates would not be changed until 2010.

Sprint Nextel made the promise in its successful effort to win utilities commission approval to spin off Embarq, the local land-line company now serving the Las Vegas area.

McMillan said the agreement contains a provision that states changes in federal or state law could invalidate that provision.