Pa. PUC proposed rescinding April order to require that Verizon create functionally separate wholesale and retail divisions within current operating company as it finalized proposed rules to provide comprehensive set of competition safeguards. Rules are intended to ensure that Verizon and other incumbent telcos don’t use their local market power to unfairly favor or promote their own retail services over those of competitors through wholesale discrimination, cross- subsidies, other abuses. PUC said functional separation no longer was needed because Verizon in its successful Sec. 271 long distance case proved to PUC and FCC that it was providing nondiscriminatory wholesale service to its competitors. Proposed rules would explicitly prohibit cross- subsidizing competitive services with revenue from noncompetitive services and bar telco technicians repairing service on behalf of CLEC from telling customer that problem would have been fixed faster had user stayed with incumbent. Rules would bar employees of telcos’ wholesale service divisions from sharing with retail marketing division proprietary customer information they received when accepting service change orders from CLECs, to ensure against launch of win-back efforts by incumbent even before carrier changeover was made. Rules would prohibit one telecom provider from claiming its services were superior to those of another unless claim was supported by fact. Comments on proposed rules will be due 30 days after their official publication in Pa. Bulletin. PUC agreed unanimously to put proposed rules out for comment. Agency disregarded call by CLEC interests to have PUC Vice Chmn. Robert Bloom recuse himself from proceeding for allegedly violating state sunshine laws by sending memo to other PUC members proposing changes such as rescinding functional separation that CLECs said would greatly weaken rules.
Notable CROSS rulings
House Rules Committee is engaging in continuing consultative process that could determine whether previously rejected line-sharing amendment to data deregulation bill could be revived. Amendment, which would have modified broadband legislation (HR-1542) by House Commerce Committee Chmn. Tauzin (R-La.) and ranking Democrat Dingell (D-Mich.), was introduced by Reps. Luther (D-Minn.) and Wilson (R-N.M.) in Commerce markup earlier this year but died. Luther-Wilson amendment, which is supported by CLEC industry, would strip Tauzin-Dingell language that could block CLEC access to ILEC unbundled network elements (UNEs), Luther’s Senior Legislative Asst. Christian Fjeld said Wed. at ALTS conference in Arlington, Va. However, Staff Dir.-Technology Don Green said it was “too early to speak authoritatively” as to when -- or whether -- Rules Committee would act formally on Tauzin-Dingell. Rules Committee “at some point” may consider whether to send to House floor HR-1542 or competing version of bill that received unfavorable referral by House Judiciary Committee.
Center for Digital Democracy said it had begun letter- writing campaign in attempt to put an end to FCC efforts that it said “threaten to weaken or end key public interest safeguards” in agency’s current TV and cable ownership restrictions. Center said letters would be sent to President Bush and congressional leaders urging opposition to relaxation of ban on newspaper-broadcast cross-ownership and ownership limits on cable MSOs -- both of which currently are under review by FCC. “Critical public interest safeguards designed to promote meaningful diversity or perspectives are likely to be eliminated” under FCC Chmn. Powell, Center Exec. Dir. Jeffrey Chester said: “Without these and other rules, a handful of already powerful media companies will be able to further dominate communications in the U.S… Journalism will be the victim of any new deregulatory policies, weakening that vital institution precisely at the time we need it to provide more information and critical analysis.”
Mo. PSC staff reversed its Oct. recommendation on amount of regulation that should be put on SBC’s long distance services in state and said it now recommended that Southwestern Bell Long Distance and SBC Long Distance be minimally regulated as competitive long distance carriers. Staff also recommended PSC grant intrastate certificates to SBC units and approve their initial long distance tariffs. Staff in Oct. had recommended SBC units be classed as noncompetitive carriers because they had “opportunities” for potential cross-subsidization of their long distance rates. SBC objected strongly, saying hobbling its units with lengthy tariff reviews and cost-support requirements would thwart their ability to compete against minimally regulated rivals. SBC said there was no factual basis for singling its long distance units out for “disparate” regulatory treatment. Upon further review, PSC staff concluded FCC affiliate rules plus PSC’s ability to suspend and review tariffs upon staff or competitor complaint would be adequate safeguard against below-cost pricing. Long distance units propose residential rates of 6-12 cents per min. and business rates of 8.5-12 cents, depending on calling plans or contract terms. With intrastate access charges at 5.5 cents per minute, PSC staff said proposed rates weren’t below cost. Agency said it would rule on units’ certification and tariffs soon after Nov. 26 effective date of FCC order allowing SBC to provide long distance in Mo. and Ark. PSC had hoped to conclude matter before Thanksgiving, but its review was delayed while it looked into AT&T complaint that proposed rates would constitute predatory pricing. AT&T subsequently withdrew complaint, saying PSC procedural schedule was too compressed to provide adequate opportunity to be heard.
One favorable result of structural regulations imposed on broadcasting has been diversity of media voices, FCC Chmn. Powell told Media Institute symposium in Washington Fri. But, he said, “I have no idea” how many such voices there should be for any given market. He said he perceived “a slow movement away” from structural regulations by govt. and “it’s time to say I want proof now” that regulations still were necessary.
PHILADELPHIA -- State regulators meeting here Mon. advanced policy resolutions addressing future of unbundled network element platforms (UNE-P), national wholesale performance standards, accounting, subscriber line charges and several other issues at NARUC annual convention.
FCC voted 3-1 at Thurs. meeting to repeal wireless spectrum cap Jan. 1, 2003, and raise it to 55 MHz in all markets during transition period. Comr. Copps delivered impassioned dissent, arguing that “in almost every market in the country, companies have not reached the cap.” Both Bush Administration and CTIA had urged Commission not to implement transition period but to remove restrictions immediately. But FCC said “orderly” transition is needed to allow it to consider what guidelines are required to move from bright- line approach of cap to case-by-case review of wireless license transfers. To assure FCC that Justice Dept. will continue to review such mergers for anticompetitive behavior on case-by-case basis, Asst. Attorney Gen. for Antitrust Charles James wrote to Chmn. Powell Wed.: “The department will continue to safeguard competition through its enforcement activities in the industry and does not believe removal of the spectrum cap rules will diminish its ability to do so.” FCC also eliminated cellular cross-interest rule in urban markets, but kept restriction in place for rural service areas. Spectrum cap has been 45 MHz, except in rural areas, where FCC raised it to 55 MHz in 1999. Interim period raises it to 55 MHz everywhere.
With FCC vote on wireless spectrum cap set for today (Thurs.), Commission has seen flurry of ex parte filings, including letter from Senate Commerce Committee Chmn. Hollings (D-S.C.) urging that 45 MHz ceiling be retained. “Since none of the current license holders are using all of the spectrum they already possess, we see no pressing need to make changes to the spectrum cap,” said letter to FCC Chmn. Powell Tues. from Hollings, Sen. Inouye (D-Hawaii) and Rep. Markey (D-Mass.). “Relaxation or elimination of the cap is likely to encourage unnecessary consolidation, relieve pressure on companies to innovate and pose a significant risk to consumers in the form of higher prices and fewer choices. This is the very result the cap was put in place to avoid.” Letter from Democrats appeared to be only public dissent from Capitol Hill on issue this year. FCC is expected to approve lifting cap to 55 MHz for 12-18 months, after which it would sunset completely.
Mass. Dept of Telecom & Energy (DTE) ruled that Verizon interstate special access service provisioning data could be used to supplement intrastate data in evaluating quality of Verizon’s intrastate special access services. DTE in Case 01-34 said number of purely intrastate Verizon dedicated access circuits was so small that data on only those circuits might not give accurate picture of overall Verizon special access service quality. DTE said interstate service data provided valid cross-check for intrastate data because Verizon used same provisioning process for both interstate and intrastate special access. DTE said use of interstate data as cross-check on intrastate data wasn’t intended in any way to impinge upon FCC’s exclusive jurisdiction over interstate service quality.
Bush Administration weighed in for first time on wireless spectrum cap Wed., with NTIA Dir. Nancy Victory urging FCC Chmn. Powell to enact “full and immediate repeal.” In detailed letter, she told Powell that retention of limits wouldn’t preserve competition but would “more likely result in consumer harm.” Letter came as FCC was set to review continued need for wireless spectrum cap by year-end, with issue expected to be on agenda for Nov. 8 Commission meeting. Cap for commercial mobile radio service (CMRS) operators now is set at 45 MHz for most markets and 55 MHz in rural areas. Administration also urged Commission to do away with cellular cross-interest rules. “Given the current vigorous level of competition in the CMRS marketplace, the existence of other mechanisms to safeguard against anticompetitive activity and detrimental consolidation, and the potential consumer harms if the rules are left in place, prompt repeal is not only warranted but required,” Victory said.