FCC’s Martin Tells NARUC States Are ‘More Than Enforcers’

“But we in government must ensure that the regulatory environment we create doesn’t get in the way of market forces. And our blueprints for change should also allow new technologies to flourish.” Martin, in his first address to NARUC since becoming the FCC’s head, said intermodal competition and new technologies are eroding legacy universal service and intercarrier compensation regimes, while regulatory uncertainties are slowing broadband deployment. Addressing these breakdowns, he said, will require flexible federal and state policies that are technology-neutral and apply evenly to all providers of particular services.

To reform universal service support, Martin said he still likes the idea of basing universal service contributions on phone numbers, not revenues, because this method is easy to administer and is within existing FCC authority. He said it would apply to any service that uses phone numbers, regardless of technology, would be easy for carriers and consumers to understand, and would promote number conservation.

Martin said he thinks intercarrier compensation reform should go in the direction of a single unitary rate for all types of traffic, which would minimize distortions and opportunities for arbitrage. He said the bill-&-keep approach isn’t viable because it would shift carrier revenue needs to the universal service subsidy system. He said NARUC and the states can offer the most help on addressing the impacts of compensation reform on rural areas and in developing consensus approaches offering the most relief with the least disruption.

Rapid expansion of broadband service is sparking an explosion of new applications and services for 34 million broadband connections now in place, Martin said. He said the Brand X decision upholding FCC authority to deregulate cable broadband as an information service dispels much uncertainty. He said the FCC now can weigh regulatory parity for telecom broadband and cable broadband providers. He said an eventual broadband policy “must treat all providers in the same manner.”

Martin said that in the wake of Brand X, the FCC can put more stress on broadband policy issues relating to universal service support, law enforcement surveillance, E-911 compatibility and disabled persons’ needs. “We can address these for broadband consumers and suppliers while keeping a light regulatory hand.” He said the issue of VoIP and E-911 is the one that is “most important and critical.” He said the FCC “took on the [VoIP E-911] burden so it was critical that we act on an appropriate answer.” He said appointments would be made soon to the new federal-state VoIP E-911 task force. Calling regulation an evolving process, Martin said the FCC originally opposed expanding video relay services to include Spanish-speaking populations, but reconsidered and reversed itself. He said IP television has raised the controversial question of whether local franchising impedes new video service entrants. He said multiple providers generally are a good thing for consumers so govt. policies should encourage entry.

In a similar vein, FCC Comr. Adelstein later told NARUC’s Telecom Committee “We need your guidance, your insights, your inputs as we move through these things. We seek similar goals for our constituencies.” He said work by NARUC’s Intercarrier Compensation Task Force “has been an invaluable aid in working toward a consensus.

FCC and NARUC Announce Lifeline Program

Meanwhile, the FCC and NARUC Tues. jointly announced an initiative to “drive Lifeline across America” by boosting Lifeline and Link-Up enrollment among eligible low-income populations through increased awareness. FCC Comr. Adelstein said the new “Connect America” campaign represents “renewal of our commitment to Lifeline and to making eligible populations aware of these programs.” NARUC Consumer Affairs Committee Chmn. Jorge Bauermeister said the FCC and states are launching this national drive “to ensure that everyone who wants a phone can afford one.” He said experience has shown “when people find out about these programs, they use them and get phones.” SBC Senior vp Jim Smith said coordinated efforts by industry and federal and state interests are the best way to ensure customers who will benefit from Lifeline know about it.

The campaign will work through a best-practices working group of FCC and state representatives that will collect and disseminate information from states, cities, telecom providers and tribal and consumer interests on what approaches have worked to up Lifeline and Link-Up enrollment. Another group will distribute joint outreach materials to consumers in English and Spanish with fact sheets, enrollment information and other marketing materials. This group plans to work with state and local social service agencies and community groups to maximize outreach efforts to eligible consumers. This program will include “train-the-trainer” efforts with state and local agencies to create cadres that can spread the word on the programs, eligibility and procedures. Finally, both the FCC and NARUC plan improvements to their respective Web sites to highlight the programs and provide information in a consumer-friendly manner.

Speakers emphasized that the initiative puts the FCC and states on the same page at the same time regarding the need to expand Lifeline and Link-Up participation. They didn’t specify an enrollment goal, but Bauermeister said “we'd love to see 100% enrollment.” During a question session, Russell Chapman of the Tex. Legal Services Center, asked SBC’s Smith about what he said were problems encountered by low-income people trying to enroll in Lifeline, including being steered to buy optional services by SBC representatives, and lack of Lifeline enrollment information on SBC’s Web site. Smith said SBC “trains its representatives to be sensitive to the needs of Lifeline customers.” He said he will have to look into the Web site information situation.

The NARUC Telecom Committee adopted a resolution on telecom reform urging Congress, in any rewrite or replacement of the Telecom Act, to include “a strong consumer-focused role” for the states. The resolution referenced a legislative task force white paper, Federalism and Telecom, as expressing the states’ position on how a new national law should operate. “We want to take these documents and use them as talking points with Congress when they consider telecom legislative reform,” said William Flynn, N.Y. PSC chmn. The resolution said regulatory jurisdiction no longer should be based on whether a call terminates within or outside a state but on regulatory function assigned on the basis of particular expertise and interests. The resolution suggests that states, given their strong interest in retail services, consumer protection, public safety and universal service, should have primary jurisdiction in those areas regardless of the technology used to deliver service.

The resolution suggests the state role should be to provide local venues for resolving inter-carrier and consumer-carrier disputes, maintaining basic consumer protections and meeting special consumer needs through relay services, Lifeline and similar programs. The attached white paper laid out a regulatory jurisdiction matrix in which the FCC would set national regulatory policy floors, enforced by the states through their own authority or by federally delegated power. States would determine how best to enforce national policies and would have authority in certain areas to exceed national standards. The white paper also urges that regulation be technology-neutral, with the degree of regulation applied dependent on the market power of services and all providers of a service regulated the same. It urges that states be free to forbear from regulation where competitive conditions exist but retain “backstop authority” to intervene in cases of clear market failure. The panel had 3 more resolutions to address late Tues.