NARUC Told Transparency in Policy Making is Only Option

Clarke told NARUC the information age’s emphasis today “is on speed, not accuracy. In that environment, transparency works to your advantage.” She said policy makers should include more people in their decision making processes. When mistakes occur, she said, transparency will help everyone get past them. “When you make a mistake, clean up your mess on the spot. Admit to your mistake and then move on… Willingness to admit mistakes is a powerful thing.” Those who try to control the information environment so they can hide their mistakes “always get run over,” she said.

After three days of debate, the NARUC Telecom Committee narrowly adopted a policy resolution calling for a joint FCC- state effort to draft national wireless consumer protection standards that would be established and interpreted by the FCC and enforced by the states. The resolution, adopted on a 13-8 vote, supports joint federal, state and industry efforts to create “mutually agreed upon” nationwide wireless consumer standards. States would be empowered to enforce adherence to the national standards and to investigate and resolve wireless consumer complaints. The national standards would be both the floor and ceiling for state authority. The resolution recommends creation of a federal-state joint board or other body or process that includes state commissioners and consumer representatives to develop the standards. The resolution said the chosen process should be feasible, efficient, effective and transparent.

States split sharply on the resolution, to the point that the telecom staff subcommittee Sunday recommended it be rejected or tabled until the summer meeting in Portland, Ore. Opponents said it would voluntarily cede to the FCC all authority over wireless consumer protection and create a bad legal precedent that other regulated industries could seize upon to escape state oversight. Opponents said the resolution cedes state consumer protection authority at a very sensitive legislative time, when Congress is considering a wireless consumer bill sponsored by House Telecom Subcommittee Chairman Edward Markey, D-Mass. They said the bill might be better for states than the NARUC proposal because it would permit consumer enforcement either through state commissions or state attorneys general.

Pennsylvania Public Utilities Commissioner James Cawley said “we are negotiating against ourselves in advance” by supporting a federal ceiling on state consumer protection authority. Washington Utilities and Transportation Commissioner Phil Jones said “it’s a baseless canard to say dual jurisdiction over terms and conditions has hobbled the wireless industry.” Other opponents said the resolution could spell the beginning of the end of dual jurisdiction if other telecom sectors and other regulated industries cited it to support their efforts to escape state regulatory oversight.

California PUC Commissioner Rachelle Chong, resolution sponsor, said “it attempts to cut the baby in half” so everyone gets a little something but nobody is left completely happy. She said it doesn’t repudiate NARUC’s past positions opposing federal preemption but instead advocates a flexible consensus that puts the interests of wireless consumers first. Other supporters said the resolution would stabilize an unsteady consumer protection situation and even expand wireless consumers’ opportunity for redress. They said only 19 states now assert wireless consumer protection jurisdiction under the “other wireless terms and conditions” in companies’ contracts with customers that let states regulate. Supporters said if the resolution were implemented, commissions in the other 31 states could go to their legislatures for permission to enforce the national consumer standards. Supporters also said it’s better to establish a foundation for federal-state coordination now rather than wait until next year’s change in administration.

NARUC’s Telecom Committee adopted a resolution on forbearance procedures that urged the FCC to act promptly on procedural changes to improve its processes for reviewing incumbent telcos’ petitions to waive Telecom Act market obligations, reporting requirements and other regulations and give states more of a voice in forbearance petition reviews. The resolution urged the FCC to adopt changes such as a strict “complete as filed” requirement for forbearance petitions, establish explicit and uniform policies ensuring state regulators and other qualified parties have access to confidential data, subject to protective orders, and allow enough time for review so states and other parties can file informed comments with the FCC. The resolution also supports bills in Congress (HR-3914 and S-2469) to eliminate a statutory provision saying forbearance applications are “deemed granted” if the FCC hasn’t acted on them after 15 months.

The telecom panel also adopted a policy resolution supporting “digital literacy” programs by public and private entities that would enhance opportunities for people, companies, government agencies and private institutions to acquire the skills needed to make effective use of broadband Internet access. It also urges policymakers to promote universal broadband access in a competitive marketplace at affordable cost. The telecom staff subcommittee recommended rejecting the resolution because they believed it committed NARUC to supporting digital literacy policies that haven’t yet been written. But Chong, resolution sponsor, said the resolution supports the “high-level concept” of digital literacy and doesn’t endorse any specific policy or program.

The NARUC Consumer Affair Committee adopted a broadband disability resolution urging Congress to amend the Lifeline and Link-Up programs to make broadband service eligible for support so low-income disabled people will have a choice of traditional telephone service or broadband-based services such as IP relay. The resolution, adopted unanimously, also urges setting aside $10 million annually to cover costs of adaptive telecom equipment for people who are both deaf and blind. Some states expressed concern this might expand the universal service fund, but supporters said the subsidy would remain the same, with the only difference being where the subsidy goes. They also said the $10 million for deaf-blind people represented a minuscule percentage of total universal service disbursements. A second telecom resolution in Consumer Affairs was withdrawn for further study. It called for changes to third-party verification of carrier changes to address situations where unscrupulous providers tricked people into authorizing a carrier switch with lies or misleading promises. The resolution was withdrawn because of possible federal action on verification processes.

The telecom panel also heard addresses from the heads of the major wireline and wireless industry associations. USTelecom President Walter McCormick said “every advance in communication throughout history has produced dramatic improvements in human life, and the Internet represents one of the biggest communications advances ever,” with near unlimited potential to improve people’s lives. He said the telecom industry’s broadband investment now exceeds what we spent to get to the Moon and build the interstate highway system, and brought the country to a point where 90 percent of zip codes have 3 or more broadband providers. But finishing the job of bringing broadband to every household requires a political climate that encourages investment. He said regulators and lawmakers need to stabilize the universal service fund, target future broadband support to unserved areas, remove barriers that restrict what providers can offer over broadband facilities, establish pole attachment parity for all broadband providers and refrain from taxing or regulating the Internet.

Steve Largent, CTIA president, told NARUC that in the 35 years since cellular wireless technology was proven to work in Motorola’s laboratories, wireless has grown into a service essential to the health of our national economy and our communities. He said wireless phones do more and cost less while the industry has created over 250,000 jobs and spends billions of dollars in wages, taxes and capital investments. But for wireless to keep moving forward, he said, “we believe regulation is best done at the federal level. But if we all work together toward the common goal of affordable, workable consumer choice, wireless is just beginning to scratch the surface of its potential.” -- Herb Kirchhoff

NARUC Notebook

A recent federal-state joint board proposal for reforming the U.S. universal service fund marks a rational middle ground approach to repairing a broken system and getting wireless and broadband service out to unserved areas, NARUC speakers said. “The system has broken down and isn’t benefitting consumers,” said Oregon Public Utility Commissioner Ray Baum, joint board co-chairman. The system “encourages duplicate networks and subsidizes competition in some areas while other areas have no wireless or broadband service,” he said. The system heavily favors a few states, and subsidies are unrelated to need, he added. The joint board urged major reforms of the FCC’s universal service programs. These include creating separate wireline, wireless and broadband universal service funds, focusing on expanding broadband and wireless into unserved areas, basing subsidies on recipients’ own costs, and limiting the number of subsidy recipients in each area. Steve Davis, Qwest senior policy vice president and deputy general counsel, said the joint board recommendation “doesn’t solve every problem, but that doesn’t mean it’s not a viable approach,” adding that Qwest receives scant universal service funding. With a stable system, capping fund size wouldn’t be necessary, but “the reality is that it’s not,” he said. Karen Puckett, Century Tel chief operating officer, backed a cap on universal service spending: “We've got to stop this out-of-control spending merry-go-round.” It’s important to have standards and accountability, she said: “Don’t seek universal service funding if you don’t want to be regulated.” Tom Conry, general manager of rural incumbent Farmers Mutual Telephone Cooperative, doesn’t favor caps. Interim caps “stopped the bleeding but we still need to deal with the problems,” he said. “If we find all the carriers’ costs, we might finally get at fixing this.” The joint board urged a $4.5 billion annual cap on high-cost support, with $1 billion of that going to mobility and $300 million to broadband. James Assey, National Cable and Telecom Association executive vice president, wants all carriers put on an equal footing, he said. The cable industry grew rapidly without high-cost support, and has reservations about government subsidizing broadband through a new universal service fund when the basic voice fund is still a mess, he said.

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Efforts to achieve regulatory and rate parity for pole attachments may be hampered because telecom and electric companies have different objectives regarding poles, said NARUC panel speakers. Speakers said telecom and cable companies’ main interest is securing access to electric poles at the lowest cost, but electric companies’ main interest is ensuring telecom pole access doesn’t interfere with reliable electric service. Some speakers praised the FCC for addressing pole attachments through a rulemaking, but others said states are better suited to resolving differences between utilities and attaching parties. Cable attorney Paul Glist said “a lot of this discussion should be carried out at the state level” and questioned why the FCC got into this issue. The FCC proposed to set one uniform attachment rate applied to all attaching parties. Glist said the one-rate idea would be okay if the cable rate formula was the one used, but he said the proposals before the FCC would unduly favor incumbent telcos, calling it “one more chapter on the FCC’s anti-cable agenda.” Jonathan Banks, senior vice president for law and policy at the U.S. Telecom Association, said 18 states regulate pole attachments. He said the states “clearly should be advocating that all rates be calculated using the same methodology.” He said the current attachment regulatory system is “an odd, piecemeal set of rules and formulas” that allow very low fees for cable, high fees for incumbent telcos and fees somewhere in the middle for competitive carriers. He said “there’s no reason to have three different pricing formulas for what are identical services… All broadband attachments should pay the same rates, and that’s a top priority for us.” Utilities attorney Eric Langley said the top priority for electric companies is ensuring their electric distribution systems remain safe and reliable when third-party attachments are present. He said utilities are very concerned about unauthorized attachments made outside of the permitting process, but the current trend at the FCC is not to punish such attachments but instead just order payment of back rent plus interest. “If they can violate the rules and get away with it, why not do it?” he said. He also said national one-size-fits-all approaches to pole safety won’t work. He said local geography and climate, as well as the nature of the attachment, affect safety. Jackie McCarthy, PCIA government relations director, said the public is very interested in utility poles as alternatives to building new communications towers and structures, and said pole regulations should focus on opening pole access to anyone who can demonstrate public benefits from their services, consistent with public safety. Wayne Leuck, T- Mobile corporate counsel, said his company wants utility pole access in lieu of building new wireless towers but said the company has encountered discriminatory rates and terms and “false safety concerns,” particularly with northeastern and southeastern utilities.

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The U.S. Department of Transportation is planning a spring “proof of concept” test of next-generation E-911 technology in five cities, according to DOT project staffer Laurie Flaherty. In a presentation to the NARUC Telecom Committee, she said testing is to begin in April in St. Paul, Minn.; Helena, Mont.; Rochester, N.Y., Seattle and a city to be selected in Indiana. She said the Departments of Commerce and Transportation have been involved with 911 development since the first 911 call was placed in Alabama in February 1968, and remain involved as 911 service begins migrating from circuit-switched fixed analog to IP-based mobile digital. “The increasingly mobile world of wireless and VoIP highlight the limitations of the decades-old 911 system designed for traditional voice telephony.” She said DOT for two years has been working with the industry and public safety entities to develop an architecture for delivering voice, text, data and video from every kind of fixed and mobile telecom device to public safety answering points and to emergency responders. “We've completed the design work,” she said. “Now we need proof of concept” through real-world testing. She said DOT and the Department of Commerce have created a National 911 Office to oversee the coming transition to digital 911. After completion of the trials, she said the next step will be cost/benefit and issue analyses, setting standards and requirements, and crafting a transition and financing plan for digital 911 service. She said the trials and subsequent analysis work will take at least two more years.

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The U.S. needs to adopt an aggressive broadband policy with the first goal of getting broadband into unserved areas, and then taking actions to encourage broadband subscription, said Robert Atkinson, president of the Information Technology and Innovation Foundation in Washington. “Other countries have industrial policies for broadband development, but we chose to leave broadband to the markets.” But he said the U.S. also has non-policy factors slowing broadband deployment including “the world’s longest average loop lengths” and relatively low population density. “Given our conditions, we are doing better than we think,” he said, “but competition by itself won’t solve our broadband problems. We need a public policy that should enable but not promote competition.” Policymakers should focus on unserved areas first, he said, and “use whatever tools work” to encourage expansion into unserved areas. Once broadband is available, he said, the next thing is getting people to buy it. He said broadband subscribership is highest among urban, upper income, college educated, male-headed households. “A lot of times, people don’t think broadband is useful until they have it for a while.”