NARUC Notebook...
The NARUC Telecom Committee unanimously adopted 2 major policy resolutions. The first was an intercarrier compensation (ICC) resolution that urged the FCC in its new ICC reform docket to “carefully consider” the most recent version of an ICC reform proposal developed by NARUC’s ICC Task Force (CD Feb 14 p3). The panel voted approval after hearing a presentation outlining the main points of the ICC Task Force proposal, intended to send a signal to the FCC that the states are serious about obtaining prompt action to fix a collapsing ICC system. N.Y. Comr. Tom Dunleavy said the task force proposal “represents a Herculean effort by a large number of people to establish a solid starting point to move forward from.” N.D. Comr. Tony Clark said the task force proposal “isn’t a perfect plan, but there is no such thing as a perfect plan. This is a good plan and one that keeps the states’ foot in the door” as the FCC tackles ICC issues. In essence, the task force proposed a default compensation plan that would be used only when carriers are unable to negotiate other arrangements. It essentially would eliminate technology-based traffic distinctions and would transition compensation to flat monthly port charges over a 5-year period. It also would reform universal service by shifting contributions to a connection-based system. Secondly, the Telecom Committee unanimously adopted a resolution outlining state policy positions NARUC’s legislative task force should discuss as Congress considers a Telecom Act rewrite. The resolution specified 8 general policy principles which in essence held that any new or revised telecom act should be technology-neutral, reflect the relative interests and abilities of the state and federal jurisdictions, ensure timely resolution of policy issues by the appropriate jurisdiction, protect the multiple interests of telecom customers, and put regulatory focus on situations where markets have failed. Brian Adkins, NARUC legislative dir., said “the burden on states is to re-justify everything we do. Congressional perception of state commissions’ role will matter a lot.” The resolution included an attached list of 33 issues intended to serve as talking points for further refinement of the states’ position as Congress debates a new telecom statute. It was this list that raised concerns by several states who wondered whether it was binding the states to these specific positions. N.Y. Comr. William Flynn, chmn. of the legislative task force, said that wasn’t the intent. He said this resolution and its issues list didn’t represent NARUC’s final position on what a new telecom act should contain for the states. He said it was a way of putting everything on the table so it all could be discussed, refined and prioritized in coming weeks as Congress turns its attention to the Telecom Act.
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Top executives of rural telecom providers, one incumbent and one competitive, told a NARUC audience Mon. that sensible national policies on universal service support contributions and intercarrier compensation are mandatory if rural service providers are to continue to grow and thrive. Peter Nixon, COO of rural telco holding company FairPoint, said: “We need to broaden the universal service support base so that any provider who uses the network is paying for it.” Nixon said the 26 rural incumbents his company owns in 17 states have made broadband service available to 77% of their customer base. He said only 36% of the customer base also has access to cable modem service: “For the 74% of our market that lacks cable modem service, we are the only one our customers can look to for broadband service” that enables such things as VoIP. “Rural communities depend on wireline companies,” he said: “I have to find ways to marry my legacy network to IP technology.” He said rural telcos depend on revenue streams from universal service subsidies and intercarrier compensation as well as end users to maintain the financial stability that allows them to attract investment capital for their networks. Ron Duncan, CEO of Alaskan competitive carrier GCI, said if Congress and state lawmakers address new telecom statutes, they need to keep in mind that “deregulation isn’t no regulation.” Network access and interconnection are essential for competition to occur, and regulatory guidance will continue to be needed because “monopoly incumbents won’t share willingly.” He said policy-makers must rationalize intercarrier compensation to eliminate arbitrage opportunities, and must reform universal service so the burden is spread uniformly. He said he sees lawmakers and regulators drifting toward technology-based regulation: “This isn’t in the public interest. People buy services. They don’t care what technology is used to deliver them.” Duncan also said smaller carriers need policy stability in order to compete: “It’s clear that we need regulation to manage the transition from monopoly to competition, but when the rules change every year or so, it’s difficult to build your business.”