TAUZIN TO COMPLY WITH FCC REQUEST FOR EXPANDED ENFORCEMENT POWER
House Commerce Committee Chmn. Tauzin (R-La.) isn’t going to rely on good-faith efforts of ILECs to comply with Telecom Act and in May 9 markup of broadband deregulatory bill will act on repeated calls to bolster FCC’s enforcement authority, spokesman Ken Johnson said. “Chairman Tauzin supports beefing up enforcement of the Telecom Act and he intends to address the issue at Wednesday’s markup,” he said. “We are going to give the FCC expanded authority to enforce the Act.” Move follows FCC Chmn. Powell’s recent recommendation that Congress raise level of fines imposed on carriers for violating Telecom Act’s local competition requirements.
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In May 4 letter to Congress, Powell suggested raising forfeiture level to “at least $10 million” from present $1.2 million per violation. He also recommended longer statute of limitations, now set at one year, for FCC investigations of local competition violations and asked for Commission authority to award punitive damages in formal complaint cases. Competitive LECs have been urging Congress to increase agency’s enforcement powers so competitors can have more leverage in interconnection disputes with incumbent LECs. Given “the vast resources” of ILECs, current forfeiture level “is insufficient to punish and to deter violations in many instances,” Powell wrote. He said he thought difficulties facing CLECs were caused by variety of conditions but “in some cases, CLECs may have been stymied by practices of incumbent local exchange carriers that appear designed to slow the development of local competition.”
House Telecom Subcommittee Chmn. Upton (R-Mich.) recently made similar proposal. Although he submitted and then withdrew proposal during subcommittee markup (CD April 27 p1), staffer said Upton intended today (May 8) to introduce proposal as standalone bill.
Despite Tauzin’s responsiveness to Powell’s request to increase FCC’s enforcement authority, markup of broadband relief bill (HR-1254) by Tauzin and ranking Democrat John Dingell that seeks to promote high-speed Internet deployment by reducing regulatory constraints on Bell companies, generally isn’t expected to go smoothly. Additional concerns raised by committee members that bill would unleash Bells at expense of CLECs haven’t been resolved thus far, and members at May 9 markup intend to reintroduce flurry of amendments that didn’t make cut at subcommittee level. “Don’t expect a Partridge Family reunion,” Johnson said of full committee markup. He declined to comment on specific member amendments: “We have made a good-faith effort to reach a compromise on several key issues. But it’s pretty clear that people’s positions are set in stone at this point.”
Rep. Eshoo (D-Cal.) intends to introduce amendment that would require FCC to preserve current reporting requirements for LECs, staffer said. Johnson said it was possible that Tauzin could incorporate Eshoo proposal into manager’s amendment, but wasn’t hopeful that that would occur. He reiterated that Eshoo was “strong opponent of bill” and that it “is not good for competition.”
Congressional staffer said Rep. Pickering (R-Miss.), also opponent of Tauzin-Dingell, remains concerned with line-sharing issue. Sec. 4 of bill would remove FCC rules requiring incumbent LECs to make partial lines available to data LECs that seek to provide only DSL service and not voice. Without those rules, data LECs would have to purchase entire line, including voice component they're not using, thereby increasing costs. Committee is seeking consensus on that issue, but Pickering still has problems with basic tenet of bill that would provide Bells with in-region interLATA relief. “Even if they deleted Section 4, it would not be enough,” Pickering staffer said.
Aide to Rep. Markey (D-Mass.) confirmed that several issues had yet to be resolved, but said it’s “not atypical” to schedule markup despite absence of breakthrough on amendments. “Sometimes setting a deadline helps people to move toward a resolution,” he said.
Meanwhile, Bell company legal counsel predicted that counterlegislation last week introduced by House Judiciary Committee ranking Democrat Conyers (Mich.) and Rep. Cannon (R- Utah) wouldn’t pass congressional muster, particularly since it would affect federal case law on telecom antitrust issues. Two bills, Cannon-Conyers (HR-1698) and Conyers-Cannon (HR-1697), would overturn Goldwasser v. Ameritech case (CD May 4 p1), in which 7th U.S. Appeals Court, Chicago, ruled that Telecom Act took precedence over antitrust in telecom-specific matters.
“I don’t think a law that would make such a fundamental change in antitrust is going to pass,” Bell attorney said. He said interconnection agreements already provided CLECs with ability to address interconnection disputes under Telecom Act. In addition, interconnection contracts between ILECs and competitors typically contain component providing for penalties for contractual violations. “It’s a bad idea to have states and the FCC and civil juries to second-guess interconnection agreements,” he said.
However, Covad regulatory spokesman Jason Oxman said Goldwasser “shuts off the courts as an available resource” for CLECs. He said court incorrectly read Telecom Act’s “savings clause,” which said that “nothing in the Act shall be construed to modify, impair or supersede the applicability of any of the antitrust laws. “The 7th Circuit misinterpreted that provision,” Oxman said.
Goldwasser case removed important tool from CLEC industry’s ability to challenge anticompetitive behavior of incumbents, said attorney Martin Stern. Bottom line of Cannon-Conyers is that it “puts back in place one additional avenue to challenge conditions that competitors believe are egregious,” Stern said.