NARUC Willing to Discuss New Federal-State Boundaries
NASHVILLE -- NARUC’s Telecom Committee adopted 3 controversial policy resolutions on preemption, intended to send a signal to the FCC and Congress that it recognizes the possible need for preemptive national policies in some telecom areas and is willing to discuss new jurisdictional alignments in such areas. A 4th resolution in the set, specifically addressing VoIP, was tabled until the group’s winter meeting in Feb. The telecom panel’s resolutions, adopted Mon. at the NARUC annual meeting here, must be approved by NARUC’s board before becoming official policy. A board meeting was scheduled after our deadline.
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“NARUC historically has been seen as reflexively anti-preemption,” said Me. PUC Chmn. Tom Welch, who sponsored the resolutions: “This is our attempt to send a signal” that NARUC is open to the possibility of new jurisdictional alignments. Opponents of the resolutions said they feared these would be interpreted as ceding the jurisdictional field in the wake of the FCC’s VoIP preemption. But Welch said: “This isn’t raising a white flag. This advocates substantive discussion of nontraditional jurisdictional options rather than defending every inch of state turf. Being open to the possibility [of new jurisdictional lines] doesn’t necessarily mean you're going to go there.”
Some states objected that the resolutions would be seen as an indication that the states are divided on preemption and would weaken their position vs. the FCC. But Welch noted that the states indeed remain deeply divided on preemption of VoIP and it would have been counterproductive to claim a consensus that didn’t exist: “These resolutions say jurisdiction is an issue that’s now on the table along with many other things. The [policy] status quo constrains our negotiating flexibility. This would allow us more flexibility.”
The resolutions amended NARUC’s standing statement of current telecom policies. The first added language saying regulatory policy should recognize the different strengths of the FCC and states. It declared NARUC is “open to the possibility” that as evolving markets and services take on more national and international characteristics, “traditional jurisdictional principles may need to be re- evaluated.” And it adds that NARUC is willing to work with the FCC and industry “to seek a simpler and competitively neutral system of intercarrier compensation.” Finally, this resolution said states must retain authority to “protect consumers from the exercise of market power” if anticompetitive situations develop.
The 2nd preemption resolution adopted by the telecom panel said national consistency in policy across broad geographic areas may be seen as desirable, and that preemption of state authority “may be justified under some circumstances.” But before preempting, the resolution said, the FCC and Congress should consult with the states and ensure that even after preemption, states “retain sufficient authority to protect the interests of their citizens.” It said Congress and the FCC should recognize that “most consumers rely on the states to protect them from unreasonable practices” by telecom providers.
The 3rd adopted resolution added language to the standing policy on UNE pricing that declared NARUC “is open to the possibility that unbundling should be treated as a transitional approach to opening markets and that the goal should be, for most if not all areas, facilities- based competition.” It also said the states should retain “reasonable flexibility” to require additional unbundling if state conditions warrant and the added requirements don’t conflict with the Telecom Act.
The tabled VoIP resolution declared that while VoIP should be considered a telecom service, NARUC “recognizes that it may be impractical and inappropriate to seek to impose traditional regulatory structures on services that use non-traditional networks or protocols” to provide services similar to wireline voice service. This resolution ran into difficulty when states started objecting that they hadn’t had time to study the FCC order preempting state regulation of VoIP services. The opponents said that while the other resolutions addressing preemption were general in nature, this one addressed a specific service that had just been preempted by the FCC. They said they wanted to see NARUC study the issue and come back in Feb. with a comprehensive policy proposal regarding VoIP jurisdiction.
In other adopted resolutions, the Telecom Committee urged that the FCC in its Triennial Review remand reaffirm its original conclusion that local competition for small and medium sized businesses would be impaired unless CLECs can obtain DS-1 loops at cost-based rates in markets where wholesale alternatives aren’t available from 3rd parties. The telecom staff subcommittee defeated a resolution that would have amended standing policy on cross-subsidies to declare that states should have authority to prevent customers of basic telecom services from bearing risks of their carrier’s forays into competitive markets, after the states couldn’t come to agreement on whether the tools available to the states should include separate subsidiaries.