NARUC RESOLUTIONS ADDRESS UNE-P VIABILITY, 911'S FUTURE, MORE

NARUC’s Telecom Committee Mon. approved policy resolutions: (1) Supporting universal UNE-P availability to ensure that form of local exchange entry remained viable option. (2) Calling for coordination of efforts by regulatory and public safety agencies to upgrade 911 systems for demands of new telecom technologies. (3) Urging FCC- state collaboration in developing national base guidelines for incumbent telcos’ wholesale service performance. (4) Opposing Verizon Wireless’ petition to FCC for wireless number portability forbearance. (5) Opposing phase-out of federal Uniform System of Accounts until telecom market forces were strong enough across the board to substitute for regulation and calling for Federal-State Joint Conference on accounting issues. (6) Supporting coordination among all entities involved in telecom emergency preparedness efforts. Resolutions must be approved by NARUC board and convention floor membership before becoming official policy of group.

NARUC’s Consumer Affairs Committee approved resolutions calling for: (1) Capping interstate subscriber line charge (SLC) at $5 instead of $6.50 specified in CALLS access charge reform plan FCC adopted last year. (2) Asking FCC to reconsider Oct. 11 decision to adopt MAG rural access charge reform plan on ground that it would shift fixed access costs onto end users without assurance that they would see savings from reduced long distance rates. (3) Declaring govt. and regulators had major interest in privacy and urging states to participate in pending litigation over FCC rules regarding use of customer proprietary network information. Telecom Committee also considered 2 access-related resolutions but let them die for lack of seconding.

NARUC committees defeated resolution that would have supported use of universal service funds to diminish infrastructure barriers to advanced service access.

Telecom Committee’s unanimous UNE-P resolution addressed claims by some segments of industry and regulatory communities that UNE-P sold at cost-based prices deterred facilities-based competition and fostered unhealthy over- reliance on incumbent telcos’ facilities to detriment of overall telecom service reliability. Resolution said UNE-P stood on equal footing under law with other local entry strategies prescribed in Telecom Act, including facilities- based entry. Resolution said current economic slowdown had diminished investment capital, thereby increasing importance of UNE-P local entry path for competitors wanting to target risky or low-margin residential and small business markets where huge customer base was required for profits.

Consumer Affairs Committee adopted similar UNE-P resolution, holding that without UNE-P many consumers would see long delays before local competitors reached out to them. Me. PUC Chmn. Thomas Welch said FCC was looking at petitions to exclude local switching from list of network elements that must be sold on unbundled basis. Without switching element, he said, UNE-P effectively could cease to exist, undermining efforts by states such as N.Y., Tex., Ill. and Mich. to establish procompetitive UNE-P rates to attract competitive residential entry. N.Y. PSC Comr. Thomas Dunleavy said he couldn’t understand why resolution caused controversy at staff subcommittee level Sun. “UNE-P is prescribed by the law.” he said: “All this says is for everyone to obey the law.”

Telecom panel also unanimously adopted resolution calling for cooperation among industry, regulators and state/local public safety agencies in upgrading 911 to provide universal automatic location identification and meet technical challenges posed by explosive wireless growth, new competitive entrants and new types of telecom technology such as Internet telephony. Resolution said “majority” of state commissions hadn’t yet begun efforts to coordinate with industry and public safety agencies on accommodating 911 to technology advancements. It urged state regulators to “strengthen” 911 coordination with carriers and public safety agencies and conduct comprehensive reviews of current 911 regulations with aim of improving systems.

Another resolution approved by Telecom panel called for creation of mechanism whereby FCC and states could collaborate to develop minimum base wholesale performance guidelines that would ensure federal and state regulators received regulatory information essential for effective performance enforcement efforts. Resolution is in response to FCC’s Nov. 8 rulemaking intended to establish core set of national performance measurements and enforcement mechanisms. NARUC resolution said many states already had adopted performance standards and enforcement systems. While there was no indication FCC intended to preempt states in that area, resolution urged that results of FCC process still should allow states to continue to be able to develop and oversee their state-specific plans. S.D. PSC Comr. Pam Nelson cast sole dissenting vote against that resolution, asking: “Do we need the help of the FCC to set performance standards? I don’t believe we do, so I'm against this resolution.”

Telecom panel also approved resolution urging FCC to deny Verizon Wireless petition seeking permanent forbearance for wireless carriers from Commission requirements for local number portability. Resolution said granting petition would result in inefficient number usage and in less competition among wireless providers and between wireless and landline services because customers wouldn’t want to change their phone numbers when they changed providers. If FCC were to grant Verizon Wireless’ petition, resolution urged that agency maintain its requirement that wireless carriers begin number pooling by Nov. 24, 2002, and that Commission conduct further studies on wireless number porting.

Resolution passed unanimously opposed “premature” elimination of Uniform System of Accounts for telecom carriers until effective local and long distance competition existed nationwide, incumbent telcos no longer had overwhelming market dominance and regulatory changes had eliminated need for accounting data to administer jurisdictional separations, universal service funding or wholesale pricing. Resolution was in response to FCC’s Oct. 11 further rulemaking notice in its review of Part 32 accounting rules and ARMIS data reporting requirements. Resolution calls for establishment of Sec. 410(b) Federal- State Joint Conference on Accounting to develop comprehensive accounting and reporting changes that would satisfy national goal of eliminating unnecessary accounting requirements while ensuring states continued to get accounting data they needed to fulfill their legal responsibilities. Resolution said FCC was considering accounting changes that could impair states’ ability to track depreciation, police against cross- subsidies, track jurisdictional separations, monitor universal service funding.

NARUC’s Finance & Technology and Consumer Affairs committees passed similar resolutions, but added request that FCC extend comment periods in rulemaking because Commission hadn’t allowed states enough time to prepare detailed information requested. F&T’s version of resolution also urged that accounting changes be referred to Federal-State Joint Board on Separations because accounting revisions could affect jurisdictional cost separations.

Telecom panel’s last approved resolution urged FCC to “build a cooperative relationship” with states for a continuing comprehensive review of plans, rules, orders and programs designed to assess vulnerability of telecom infrastructure to disasters and acts of war or terrorism. Resolution also supported emergency preparedness efforts by national Office of Homeland Security and would commit NARUC to cooperating and working with all national agencies involved in developing emergency response plans and procedures.

Consumer Affairs’ SLC resolution urged FCC to refrain from further increasing SLC above $5 and said any residual costs not covered at that level should be recovered by another means such as per-min. access rates. Resolution noted FCC had begun cost-justification proceeding required by CALLS plan but said any further increases in SLC could promote local loop bypass and effectively raise both local and long distance rates for low-volume customers. Telecom panel rejected resolution because many states viewed it as untimely back-door bid for reconsideration of FCC’s CALLS access charge reform decision more than year after reform regime took effect.

Consumer Affairs’ MAG resolution said decision should be reconsidered because it would shift interstate costs from long distance carriers onto ratepayers without mandating that interexchange carriers pass their access savings on to customers through lower long distance rates, thereby having potentially adverse effect on public’s ability to obtain affordable phone service in rural areas. Telecom panel rejected resolution as premature, saying effects of MAG order weren’t clear yet.

Defeated resolution that would have endorsed use of universal service funds to take down infrastructure barriers to advanced service access lost because many states believed it could be read as call to use universal service funds to subsidize retail advanced services.