Commonality to Determine Possibility of NARUC Appeal over USF Order; Industry Lobbying States
NARUC might not appeal the FCC’s order on Universal Service Fund as a single bloc because states have varying views on the order, telecom industry officials told us. Though it’s uncertain if NARUC will appeal, the decision would depend on how much common ground there is among states, John Burke, chair of NARUC’s telecom committee, told us. Meanwhile, the industry has been lobbying at states to prevent appeals, a state official said. Despite a few states’ different views on preemption, NARUC has been consistent with its opposition to state preemption (CD Aug 26 p5).
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The impact of the order on individual states is likely to be different, Burke said. The issue “clearly becomes somewhat state-specific and how much commonality there is,” he said. NARUC’s telecom committee scheduled a 2 p.m. Wednesday conference call that might last until late into the afternoon to discuss the order, he said, and there might be more clarity after the call. States are still digesting the order, he said. Federal Commissioners Mignon Clyburn and Michael Copps have both asked states not to sue. NARUC hasn’t made a decision, said Brad Ramsey, the group’s general counsel.
The state members of the Federal/State USF Joint Board and most of the states that filed with the FCC on USF in the docket are generally in line with NARUC’s position on state preemption and intrastate access charge, which suggests that they will at least carefully consider whether to appeal, a state official said. The order was published in the Federal Register Tuesday. Most of its new rules take effect Dec. 29, but telecom officials universally expect a court challenge (CD Nov 19 Special Bulletin). Even if it survives an appeal, though, telecom officials we talked to Tuesday said lawyers will be busy for years to come because so much of the putative reforms either punt to further rulemaking or delegate to bureau officials.
The biggest issue for telcos is likely to be the cost model, two telecom officials said Tuesday. The order requires the bureau chiefs to formulate a “forward-looking” cost model so that phase II of the new Connect America Fund can begin in 2013. Among other things, bureau officials will have to come up with a survey of broadband costs so the new fund can ensure that rural rates are “reasonably comparable” to urban ones, the telecom officials said. That’s a tall order because broadband companies offer an array of pricing tiers, from bundled services to stand-alone services to promotional services, and there will be plenty of argument about which rates should be included in the survey, the telecom officials said.
The industry is lobbying at state commissions and governors’ offices to prevent appeals, a state official said. States are looking at concerns from “selected segments from the industry,” especially the small rural operators, he said. State regulators are concerned about the potential implication of the order on existing interconnection agreements, which have been approved by individual state commissioners, he said. These agreements might not automatically change under the order without involvement from state commissioners, he said.