FCC'S ATTWOOD SEES DECISION ‘SOON’ ON CLEC ACCESS CHARGES
FCC hopes to take action on CLEC access charges “in the very near future,” Common Carrier Bureau Chief Dorothy Attwood told rural telephone executives attending National Telephone Cooperative Assn.’s annual Legislative Conference Wed. Issue has been “incredibly hard” for FCC, she said. On one hand, CLECs depend on that revenue to finance expansion, she said, and on other hand, long distance companies can’t afford to pay high rates because competition is driving down their end-user rates. “The worst answer is not to resolve [it],” she told group, saying she was aware that some NTCA members had CLEC operations that could be affected by FCC decision.
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Long distance companies have urged FCC to clamp down on high fees charged by CLECs for access, fees that are much higher than those charged by incumbent LECs. AT&T recently proposed reducing those charges to ILEC level within one year, move that raised objections from CLECs that supported more phased-in approach proposed by ALTS. Kevin Joseph, Allegiance vp-govt. affairs, told us he questioned AT&T’s motives in seeking speedy reduction in access charges, which AT&T pays, compared with company’s requests for more phased-in reduction in reciprocal compensation, which it collects. Allegiance and other CLECs just want “equal treatment,” he said. If reciprocal compensation is reduced through stepped approach, so should CLEC access rates be, he said. FCC has always taken phased-in approach in making such major changes, he said. Joseph also noted that NewSouth is only CLEC that has endorsed AT&T plan.
As she has promised before, Attwood told NTCA that reciprocal compensation issue was close to decision. Two pricing issues are related and FCC also is considering broader proceeding to take “unified approach” to disparate pricing regimes. In answer to question, she said it was important for FCC to review 2 rural reform plans -- Multi-Assn. Group (MAG) access charge reform plan and universal service reform proposal by Rural Task Force -- at same time because they were interconnected. However, she said she wouldn’t rule out “staged approach,” such as implementing universal service and access charge reforms at different stages.
FCC Enforcement Bureau Chief David Solomon said he expected agency to make more decisions through enforcement of complaints -- setting “precedents” -- rather than through rulemakings, in keeping with Chmn. Powell’s view that regulation wasn’t only way to approach issues. NARUC Gen. Counsel Brad Ramsay said he doubted reciprocal compensation bill could clear Congress, even if House passed it. He also said NARUC remained opposed to data LATA bill supported by Bell companies, saying it could be introduced as soon as next week. He said state regulators also had serious concerns about bill easing regulations on 2% telcos -- those that serve less than 2% of nation’s access lines.
Also on NTCA panel, Warren Hight, CEO of SRT Communications in N.D., said rural companies needed 3 things from FCC: (1) Adoption of MAG plan to give companies predictability. (2) “Consistent policies to encourage investment in rural areas.” (3) Opportunity for rural companies to adopt wireless technology, such as allowing them to participate in auction process.
At NTCA-sponsored news conference, aide to Sen. Burns (R- Mont.), said comment by Senate Appropriations Committee Chmn. Stevens’ (R-Alaska) to FCC Chmn. Powell that market alone couldn’t sufficiently address communications needs of rural resident was “hugely significant” development in debate over govt. role in facilitating telecom network deployment in rural America. Michael Rawson, Burns’s communications policy adviser, said Burns and Stevens “completely agree” on need for full funding of universal service program. He also said Powell was “sensitive to the need” for maintaining universal service program and expected him to “be open to carrying out the will of Congress.”
The Telecom Act’s twin goals of creating competitive local exchange market and govt. support mechanism for universal service aren’t, as critics say, “impossible to address” simultaneously, NTCA Board Pres. Earl Owens said. “They are in the law and they need to be addressed -- both of them, not one of them,” and it’s up to FCC to accomplish those tasks, he said. He blasted President Bush’s budget proposal to eliminate funding for Rural Utilities Service (RUS) loans through Rural Telephone Bank, program with “sterling record.” He said that in 51-year history of RUS “there has never been a default,” and 6 million customers over 35% of the geographic U.S. currently are served by RUS- financed borrowers, which last fiscal year benefitted from $175 million in loan authorizations. Owens said ensuring adequate debt capital sources was one of biggest challenges for rural telco network deployment and upgrade of communications infrastructure. “And that capital source is the Rural Utility Service program,” he said.
“What do you think the price of local phone service would be without universal service,” Rawson asked Owens, who responded that “there wouldn’t be local service” in some rural areas or at the least it “would be hundreds of dollars” monthly for rural phone consumers.