NARUC Notebook...

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Brian Adkins, NARUC’s telecom legislative dir, said it’s increasingly unlikely Congress will take on a comprehensive rewrite of the Telecom Act this year - but it may go for “low-hanging fruit” with bills targeting popular issues such as consumer phone record privacy. He told NARUC’s Consumer Affairs Committee that another possible telecom target area for Congress this year is extending the Universal Service Fund’s exemption from federal Anti-Deficiency Act provisions that would act to increase the program’s complexity and cost because money for subsidies would have to be in the bank before any commitments to funding are made. He said Congress may also tackle video franchising, network neutrality and possibly municipal broadband services.

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Wireless industry representatives speaking on a NARUC Consumer Affairs Committee panel Sun. split on whether the FCC needs to impose an automatic roaming mandate on wireless providers. Tim Ostrowski, Leap Wireless vp-business development, said his company’s Cricket wireless service has suffered from very limited wholesale choice and hasn’t been offered wholesale roaming minutes at fair and nondiscriminatory rates and terms. He said market forces haven’t helped Cricket get roaming agreements for its low- cost, no-frills wireless service for “underserved” populations. He proposed that in markets with 3 or fewer carriers the FCC cap wholesale roaming charges at the average retail roaming rate, currently around 7 a minute. He said larger carriers have charged Cricket up to 28 for roaming, or about 4 times the retail rate, and said this demonstrates market power that requires regulatory intervention. But Francis Malnati, Verizon Wireless exec. dir.-regulatory affairs, said there’s no proof of a market failure that would justify FCC intervention. He said wholesale competition the past 10 years has driven down roaming fees. He said Verizon’s roaming charges to Cricket were “nowhere near” retail roaming rates, and said “they don’t pass along the lower rates we give them now.” Michelle Thomas, T-Mobile USA senior regulatory counsel, agreed that there’s no need for more FCC roaming regulation. She said the FCC instead should lift the manual roaming obligation it currently imposes. She said T-Mobile has successfully negotiated fair and reasonable roaming rates with small and large carriers.

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NCTA Pres. Kyle McSlarrow told NARUC’s Telecom Committee that any efforts to overhaul the 1996 federal Telecom Act need to keep the parts that worked for video and Internet services. “It’s appropriate to take a fresh look at the ‘96 act from the principles of minimizing regulation, ensuring all providers fulfil their social responsibility, and treating like services alike.” He said the Act “wasn’t perfect but encouraged today’s wide variety of services and providers.” He said Congress in 1996 “got it right” by deregulating cable and allowing telephone companies into video services. McSlarrow said Congress shouldn’t be quick to scrap local video franchising: “Local franchising is not a barrier to video entry.” He said any overhaul of the rules governing local franchising “should end up the same for everyone… Someone has to decide, and it should be the municipalities.” He said state legislation like the Tex. law that shifted franchising authority to the state “gives us massive heartburn.” McSlarrow said the industry prefers legislation like the Va. bill that preserves municipal franchising but requires fast action on applications and gives video providers franchise opt-in rights. He said the decisions in the 1996 act to refrain from Internet regulation and compel interconnection also were right. He said the network neutrality issue for broadband Internet access has “morphed” from barring providers’ blocking access to content into a drive to dismantle invisible barriers that could deter entrepreneurs from innovation in Internet applications.

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Speakers at a Sun. NARUC network neutrality panel warned against trying to regulate open access to Internet content until there actually is a content blocking problem. Market forces will ensure network neutrality, Link Hoewing, Verizon asst. vp-Internet services, said: “Consumer demand drives us to provide full Internet connectivity. They want what they want, when they want it.” Hoewing called it premature to go for regulatory solutions since there hasn’t been a problem with blocking access to content. Network neutrality laws and rules would be premature, Dan Brenner, NCTA senior vp-law & policy, agreed: “It’s a solution in search of a problem.” Network management is needed to keep Internet traffic flowing, he said. But Brenner distinguished between managing traffic and controlling consumers’ access to content: “If network providers start blocking access based on price or other factors, innovation will die. But we should be careful about inserting government into this area. Wait for problems to take shape first.” Network neutrality principles shouldn’t be interpreted as barring network providers from offering optional extra-cost services, he said. Debra Berlyn, AARP federal legislative representative, called open access to Internet content vital for older Americans. All providers should commit to open access without blocking of any content -- but the biggest barriers to broader Internet use by older Americans don’t involve content blocking, she said, turning the spotlight on affordability and availability, especially of broadband access. Neutrality problems may arise when network providers also provide competitive content, she said. John Sumpter, PacWest Telecom regulatory vp, agrees network neutrality and open access to Internet content are essential, he said: “But how to we ensure it?” Network neutrality exists in the circuit- switched public telephone network, which came about because of govt. mandates in 1913, 1968, 1984 and 1996 to stop monopoly abuses, Sumpter said. He said as long as telecom competition has free rein, innovation and openness will prevail. But if network operators restrict competition and access, govt. intervention will be needed. -- HK

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FCC Wireline Bureau Chief Tom Navin told NARUC’s Telecom Committee that his top priorities for the bureau this year will be to complete a comprehensive management review of federal universal service programs and reform the contributions system into something that’s easy to understand and competitively neutral. He said Chmn. Martin favors a contribution formula based on phone numbers, not revenue. Navin said the bureau also wants to move on intercarrier compensation reform that will blend all the systems into one regime that treats all traffic the same. He also said the bureau this year intends to decide on 8 pending forbearance petitions. The first of these is due for decision March 17. In it, Verizon seeks forbearance from Title II regulation of high-speed packet switched services and ultra high-speed SONET services for retail enterprise markets and wholesale markets.