NARUC Meeting to Parse Federalism Questions, Changing Balance

"They are the lion that roars,” said Commissioner Anne Boyle of the Nebraska Public Service Commission of Washington federal authority. “We are the mouse that’s squeaking.” She described an environment of gridlock and lobbying power in Washington, a world where the wireless industry has “a lot of clout” and state voices struggle to be heard. During FCC Chairman Julius Genachowski’s “regime, we felt like he pushed us away,” she said. Boyle also stressed a point NARUC as a whole has made in recent years: The FCC has failed to consult the Federal-State Joint Board on Universal Service and the Federal-State Joint Board on Jurisdictional Separations on major decisions. “We were ignored,” said Boyle, a member of the Joint Board on Universal Service. “We were treated as second class.”

The NARUC federalism task force plans in its Wednesday sessions to address concerns industry has raised (CD July 8 p5) on draft principles it has articulated this year, said task force member Chris Nelson, vice chairman of the South Dakota Public Utilities Commission. “We're going to parrot some specific questions back to them.” Nelson was referring to comments stakeholders made earlier this month about the group’s latest statement of principles. He pointed out one comment from USTelecom about the NARUC group’s overly broad definition of communications, another on how regulators should push for clearer classification of VoIP and then the debate on how states should oversee or not oversee IP-to-IP interconnection agreements. “Within the industry, there’s two very different points of view,” Nelson said of such agreements.

FCC Chairman nominee Tom Wheeler “has an opportunity to seize on a chance to take things in a different direction, a more productive direction,” said Commissioner Larry Landis of the Indiana Utility Regulatory Commission regarding federalism concerns. Wheeler’s background in wireless and cable “holds some promise,” Landis said, hoping for what he called a “new, fresher relationship” between states and the FCC. “I continue to remain optimistic about the future collaboration … both under the interim leadership of Chairperson Mignon Clyburn -- a former State regulator -- and incoming Chairman-designate Tom Wheeler,” Commissioner Jim Cawley of the Pennsylvania Public Utility Commission told us in written comments submitted with PUC Telecom Analyst Labros Pilalis. Cawley supports “better utilization” of the Joint Board process, he added. Landis strongly criticized the FCC under Genachowski for not heeding the joint boards and moving forward recklessly with its November 2011 USF order, relying on methods he called flawed and “profoundly disturbing” in their ongoing execution.

But Landis hailed “significant but incremental” tweaks to the Connect America Fund process this month, which suggest someone is listening -- potentially FCC Commissioners Jessica Rosenworcel and Ajit Pai, he said. Both commissioners seem to “get it,” inspire “great hope” in Landis and are a “good sign” for the possibility of restoring proper federal-state relations, he said. “I would be astonished if she is not received very well,” Landis added of Rosenworcel’s NARUC speech slated for Monday morning. Boyle praised Rosenworcel but said she has “reservations” about Wheeler given he worked for industry rather than government: “He has to have the right balance.”

NARUC policy discussions will hinge on five proposed resolutions (CD July 11 p8) this summer, not without contentiousness. “There will be some controversy, yes,” Landis said, describing “pushback from stakeholders” on multiple resolution drafts already. The wireless industry doesn’t feel it should be included in a resolution draft urging the FCC to update its slamming rules, said Landis, a sponsor of the draft. Wireless stakeholders say it’s impossible to slam in a wireless environment, but “who’s to say that environment won’t change?” Landis countered. Boyle, another sponsor of that draft, called slamming “an invasion of people’s lives” and said “it’s becoming more and more of a problem.” Another draft Landis sponsored pushes for national and state policies ensuring reliable wireline and wireless backup power and has attracted some dissent, he said. Lifeline reform also has attracted great interest among commissioners, Landis and Boyle said. Boyle is sponsoring a draft on improving annual Lifeline recertification and said she has concerns about carriers coming into Nebraska and other states that want to serve only Lifeline customers. Landis called the national Lifeline reforms “a onetime look at the database, which was something that should have been done all along.” He lauded the end of abuses and said more attention needs to go to the fund’s ballooning size. Nelson sees little controversy among the five drafts, he said.

Other meeting discussion items include the proposed FirstNet and technology transitions. Boyle said FirstNet hasn’t received much discussion among state commissioners but will be featured in a panel discussion. Another discussion point may be Fire Island, N.Y., where Verizon’s switch from copper landlines to fixed-wireless Voice Link has provoked more discussion in the last couple of weeks, Landis said. He credited AT&T with pushing for trials on Internet Protocol-enabled services and called for state involvement in “a trial in which we really put the process to the test.”

"Within the task force, I think we're very comfortable with where we're at right now,” Nelson said of the group’s progress and drafts. “There is still a distinct role for state regulators and perhaps more importantly, for states as a whole.” The “most important crux” of the paper is refining the idea of cooperative federalism, in which no side is shut out and input from all stakeholders is received, he said. The group has met twice in person and many times over the phone, said Nelson, who predicted the Wednesday sessions would be his highlight. NARUC Telecom Committee Chairman John Burke is the task force’s new head as of July, a change Nelson hailed as “appropriate” given Burke’s ongoing role.

The task force “provides the appropriate guideposts on moving forward through genuine and substantive reliance on the concept of cooperative federalism,” said Cawley, a task force member. “Complete federal preemption and dual federalism are not the answers when we are dealing with telecommunications networks and services with large fixed costs. Similarly, changes in technology and intermodal competition do not provide all the answers and remedies on issues such as ubiquitous and affordable universal service, consumer protection, privacy protection, network interconnection, and competition.”