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November 18, 2004 |Miscellaneous

Federal regulators told the NARUC convention in Nashville Wed. jurisdiction changes arising from new technology and service concepts in telecom and energy will make it more important than ever for the federal and state govts. to cooperate. FCC Comr. Abernathy said new technologies like VoIP make adherence to old federal-state jurisdiction lines infeasible, but the states will still have a role. She said the FCC and the states “still should work in collaboration on sound public policy. The FCC can’t handle matters like [VoIP] E-911 without the cooperation of state regulators.” She said some new technologies and service concepts require a single national policy, but “details of implementation should still be worked out with the states.” She said the core question is: “What type of regulatory regime best serves to deliver value to consumers?” She said that with VoIP, federal preemption was necessary because IP-enabled packet-switched technologies don’t recognize boundaries: “IP-enabled services only superficially resemble circuit- switched voice,” she said. “But in the IP world, the old end-to-end jurisdictional analysis simply didn’t work” because IP users could call anyone from anywhere and all calls looked the same. She said the Vonage VoIP preemption order didn’t deny the states a supporting role. She said it gave state attorneys general responsibility for addressing broad matters of VoIP consumer protection. She said the FCC had to settle VoIP jurisdiction before taking up other VoIP issues. Patrick Wood, chmn. of the Federal Energy Regulatory Commission (FERC) and a former Tex. regulator, said federal-state cooperation will be crucial in development of policy for broadband over power lines (BPL), which will put the FERC, FCC and state commissions in a regulatory triangle. He said all parties involved must maintain flexible and not lose sight of the fact that they all exist to protect consumers. Hilda Legg, dir. of the Rural Utilities Service, said the states and federal agencies “have to work together and communicate. We need to be willing to listen to each other because we have a common purpose.” She said the telecom and energy infrastructures will remain the foundation of national economic growth despite all the industry changes. She said BPL may present unique circumstances for RUS as a lender. She said RUS could end up lending money to an electric utility that seeks to offer BPL in competition with a phone company that also is an RUS borrower. She said: “It is in the national interest to keep rural America connected. The whole nation benefits from a strong rural economy.” Iowa Comr. Dianne Muns, new NARUC first vp, said no one level of govt. can do all things anymore. “Our discussions need to be about who should be doing what.” She said states have been very effective at resolving wholesale contract disputes and retail consumer complaints and doing public education and information gathering, and they should retain their authority in these areas: “We need to respect each other’s strengths and try to reach agreement on what each should be doing. Both levels are important and have jobs to do.” -- HK

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Speakers at a NARUC’s political policy panel agreed that it’s highly likely the 109th Congress will attempt to rewrite the 1996 Telecom Act. The speakers at a NARUC panel on policy implications from the Nov. election Tues. said the expanded Republican majority in the next Congress would be more likely to favor scrapping large portions of the Act rather than just tweaking them, and significantly lessening regulation. They also agreed that telecom policy-makers probably wouldn’t be splitting along partisan lines, but rather along divisions like rural vs. urban. Robert Blau, BellSouth public policy vp, said: “I doubt this will take 10 years like the last act, and I think it’s more likely to be 10 pages this time, and not 110 pages.” He said he doesn’t see the House GOP majority as being sympathetic to applying telecom taxes to new technologies such as VoIP. He said he expects a new act would allow for less regulation as telecom markets continue to become more competitive. Me. PUC Chmn. Tom Welch said he expects market philosophy will strongly influence any telecom rewrite approach, allowing market forces free play until someone demonstrates monopoly power. He said VoIP “shows that the old system of government intervention based on service distinctions can’t be sustained, but its replacement is unclear.” Rick Cimmerman, NCTA state policy dir., said much of the pressure for a Telecom Act rewrite is being generated by the current messy state of affairs regarding universal service support and intercarrier compensation. He said the FCC has both issues up for resolution on its 2005 agenda, and a wholesale overhaul of the Act won’t be necessary if the FCC can provide relief to these 2 big sore spots. Jay Driscoll, govt. affairs dir. for the Western Rural Telecom Alliance, said rural incumbent telcos “stand most to lose from a Telecom Act rewrite; mistakes there could devastate our members.” He urged policymakers to “look hard at what they want to achieve” in rural America.

State consumer advocates urged Congress to include a national telecom consumer bill of rights in any legislation intended to revise or replace the current Telecom Act. The resolution, adopted by the National Assn. of State Utility Consumer Advocates (NASUCA) at its annual meeting in conjunction with the NARUC annual convention in Nashville, said there should be federal guarantees in the law that consumers will have a “safe harbor” of regulated services from a provider of last resort. In addition to enumerating consumers’ rights to adequate service, accurate bills, privacy, freedom from frauds, open access to content and other entitlements, the resolution said a national telecom consumer bill of rights should grant the states primary jurisdiction over the retail relationships between consumers and carriers. In addition, the resolution said, states should have authority to develop and enforce competitive market requirements consistent with federal law and policy. The resolution also urged the creation of a federal telecom consumer advocate to represent telecom consumer interests at the FCC. NASUCA adopted a related resolution calling for adoption by the FCC of a national code of conduct for wireless carriers, to be enforced by state and federal authorities. The code would require standardized disclosures at point of sale of all rates and fees, terms and conditions, call coverage and E911 capabilities. In other resolutions NASUCA decided to: (1) Call on the FCC to overhaul its public website and improve its usefulness by making 19 specific changes to facilitate the public’s ability to find desired dockets and ascertain their current status. (2) Urge Congress to adopt legislation to exempt the Universal Service Administrative Corp. (USAC) from the strictures of the federal Anti-Deficiency Act. The resolution said USAC ran afoul of this law only because of an accounting technicality rather than actually spending its money before appropriations are made. The resolution said failure to exempt USAC would sharply increase the universal service surcharge on phone bills. (3) Urge the FCC to renew the Consumer Advisory Committee. The resolution said the panel is particularly vital now to address consumer issues during this current period of substantial change in telecom technologies and markets.

NARUC’s board adopted a set of 3 Telecom Committee preemption regulations intended to show the FCC and Congress that NARUC is willing to negotiate new federal- state jurisdictional boundaries for new technologies and service concepts but wasn’t prepared to cede everything to the FCC. The group of resolutions (CD Nov 16 p2) are now official NARUC policy. They include: (1) NARUC’s recognition that evolving markets and services may require new jurisdictional principles. (2) Acknowledgment that federal preemption of state authority may be justified at times, provided the FCC and/or Congress consulted with the states first. (3) Acceptance of the principle that network unbundling may be a temporary bridge to full facilities-based local competition. But the resolution also said states should retain flexibility to require additional unbundling where necessary. Neb. Comr. Ann Boyle tried to persuade the board to put off the resolutions until the winter meetings in Feb. in order to work on a comprehensive new jurisdictional policy, but she failed to gain support. The NARUC board also adopted a Consumer Affairs Committee resolution urging the FCC to deny 3 telemarketing industry petitions seeking preemption of state telemarketing regulations on interstate calling that are stricter than the FCC’s regulations.

Ensuring a broadband bridge across the “digital divide” so all segments of the U.S. population can benefit from broadband during the current rollout period will require a mix of govt. and market initiatives, said speakers Tues. at a NARUC panel on broadband deployment policy. Jeff Carlisle, FCC Wireline Bureau chief, said the first principle of broadband policy should be to ensure broad availability of service at affordable prices, but without discouraging innovation. He said the FCC adopted competition among platforms as the vehicle for achieving the goals. He said unsettled issues include access to rights of way and broadband universal service support. Ind. state Sen. Jack Ford (R) said rural communities are extremely eager for broadband as a key to economic development. He said the old utility paradigm is being displaced by competitive information technologies for backbone networks. He said govt. may have to pick up some of the last-mile risk of extending broadband to individual premises. He said the “killer apps” that will drive broadband to every corner of America won’t be for person-to-person communications but rather device-to- device for a vast array of commercial and industrial command-and-control applications: “Business will provide the applications if government gives it the opportunity to thrive.” Consultant Larry Irving, NTIA dir. in the Clinton Administration, said Internet technology has seen the fastest adoption rate of any new technology in history, faster than TV. He said an enhanced VoIP service incorporating voice, video, data and graphics will be the application that drives broadband deployment. He cautioned that private enterprise has been overlooking minorities in their broadband deployment, including signs of “redlining.” Jessica Zufolo, analyst with Global Medley Advisers, said market incentives are there to get broadband out to “high-value customers” wherever they are. But she urged policy-makers to pay attention to last-mile issues. She said investors are waiting for final resolution of FCC unbundling rules before they will commit themselves. W.Va. State Consumer Advocate Bill Jack Gregg cautioned policymakers to “curb your enthusiasm for throwing public money into this unprecedented rollout of a new technology.” He said the public sector should let private capital take broadband as far as it can and introduce public funding only where market forces have failed. He cited cellphones as a “successful exercise of regulatory forbearance.”