FCC Extends Separations Freeze 6 Years, Seeks Incremental Changes; Carr Brokers Deal
The FCC extended by up to six years a freeze on federal-state jurisdictional separations -- of telco costs and revenue -- set to expire Dec. 31. That's longer than recent extensions but shorter than apparently proposed in a draft order (see 1811140033). It was a compromise sought by Commissioner Brendan Carr after Commissioner Mike O'Rielly, federal-state joint board chairman, pushed a 15-year extension proposed in an NPRM that state regulators opposed (see 1807180059).
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"Because so little progress has been made on comprehensive separations reform over the past 20 years, we extend the separations freeze for up to six years so that the Commission and the Joint Board can devote their resources to substantive reform, rather than to extending artificial deadlines," said the unanimous order and waiver Monday in docket 80-286. State joint board members "shared with me their concerns about the impact that a long-term extension would have on the prospect for substantive separations reform," Carr said. He thanked O'Rielly and said the agreement "now aligns with the input provided by our State counterparts."
O'Rielly said he was willing to agree to Carr’s request for a reduced extension and "it should be widely-recognized that the need for comprehensive reform has become increasingly irrelevant in view of technological and regulatory obsolescence, and that the separations rules may ultimately become defunct by the time the six-year extension lapses."
“I’m sure the State members want to thank and commend all the FCC Commissioners for actively participating in deliberations with and being very responsive to the Joint Board recommended decision," emailed NARUC General Counsel Brad Ramsay. NARUC had opposed an extension without joint board input (see 1809120028).
Because "previous attempts at comprehensive reform have failed, we request that the Joint Board approach the challenge incrementally," the order said. "We ask that, in the short term, the Joint Board focus on how best to amend the separations rules to recognize that they impact only rate-of-return carriers and on whether any other separations rules or recordkeeping requirements can be modified or eliminated in light of that limited application." Deciding those issues "will reduce the Joint Board’s work over the longer term as it seeks to replace the existing jurisdictional separations process with a simplified system for reasonably allocating costs between the interstate and intrastate jurisdictions," the order said. "We begin this incremental reform by allowing rate-of-return carriers that elected to freeze their separations category relationships in 2001 to opt out of that freeze."
In case the extension order doesn't run by Dec. 31 in the Federal Register, the FCC waived the separations rules. That's "to the extent that they would require carriers to update their category relationships and cost allocation factors."