NARUC RESOLUTIONS ADDRESS UNE COSTING, VoIP, N11 USES

NARUC’s UNE resolution addressed the FCC’s pending review of its total element long run incremental costing (TELRIC) rules for UNE pricing. It urged the FCC to retain use of a forward-looking TELRIC methodology, but said any revisions in TELRIC in this docket should allow states the flexibility to reflect state-specific market conditions. It also asked that any FCC adjustment factors be designed to: (1) Fit in the context of a state TELRIC cost docket. (2) Give states the option of using the FCC adjustment factors or developing their own through a full UNE pricing proceeding. (3) Give states discretion to adopt appropriate fill factors that might vary from an incumbent telco’s actual fill factors.

The resolution on voice-information convergences said regulatory jurisdiction over new technologies such as voice- over-IP (VoIP) should be based on what the resulting service did, and not on the technology it used, its speed or capacity or what other services it was commingled with. The resolution said that as the FCC evaluated new technologies and services that combined elements of unregulated information services and regulated telecom services, it should consider the effects of its decisions on capital investment, consumer protection, jurisdictional separations, 911 and other aspects of public safety, universal service support and state/local fees and taxes. It urged the FCC to work with the states to adapt regulatory oversight to technological change so all consumers received the benefits of new technologies such as VoIP.

NARUC’s numbering resolution urged the N. American Numbering Council to advise Congress of concerns that the mandate in last year’s Pipeline Safety Act for a national 3- digit number for one-call underground facility locator services by the end of this year had forced the use of the only remaining unassigned N11 dialing code, 811, for that purpose. It said the mandate closed off use of other numbering options such as 800. The 211 code is for human services referrals, 311 for nonemergency public safety calls, 411 for local directory assistance, 511 for traveler information, 611 for telephone repairs and testing, 711 for relay service access and 911 for emergency calls. The resolution also urged all governmental entities to cooperate in resolving any contractual or tariff issues that might arise in implementing a national one-call facility number.

Some states proposed to change the resolution into one supporting use of the 811 code for one-call locator services, saying that was a legitimate application because it involved protection of all utilities’ underground infrastructures, not just gas lines. They also said reconsidering the Pipeline Safety Act to address numbering could upset some of the delicate compromises that allowed that law to pass last year. But supporters of the original language said they hoped Congress would realize that the number of digits used for calling the locator service really was irrelevant and that the central issue was public education of consumers and contractors about calling before digging.

NARUC’s Telecom Staff Subcommittee narrowly defeated a proposed policy resolution that would have encouraged the FCC to promote competitive directory assistance (DA) choice. Before the vote, competitive operator service providers told the state regulators that effective competition in the $6 billion DA market wouldn’t occur as long as incumbent telcos had exclusive control over the 411 DA access code. The defeated resolution would have called on the FCC to take “prompt action” to ensure that DA customers had competitive choice and access to accurate, up-to-date listing databases at reasonable prices. It ran into problems after some states raised concerns that it didn’t address wireless DA at all, might put NARUC in the position of supporting competitive DA providers’ position that they must have access to 411 and could be interpreted as negation of state policies that required a DA free-calling allowance. The group tried wording changes to address those concerns, but ended up defeating the resolution 13-10. The matter may be brought up again at NARUC’s winter meeting in March.

Earlier, the regulatory staffers heard Lois Pines, regulatory dir. of competitive DA provider InfoXXX, say: “If you don’t have dialing parity for directory assistance, competitors won’t come in.” She got support from Kathleen Pierz, managing partner of the Pierz Group, who said that in Europe, DA competition thrived only after the incumbent lost its abbreviated dialing code. She said that in Switzerland, where the incumbent managed to keep its short code, competitors floundered and left the market. She said dialing parity could be achieved either by allowing presubscription to the 411 code or eliminating 411 dialing for all DA providers. Pierz said DA competition in Europe cut prices 25%, spurred innovative DA services and boosted usage 15%.

Rodney McDonald, senior staff attorney in the FCC’s Wireline Competition Bureau, said the Commission opened a docket last year to consider DA dialing schemes and other measures that would facilitate competition, but said all the various alternatives to the present system presented significant implementation problems. Ed Caputo, MCI dir.- enhanced information services, said an alternative to a dialing system overhaul would be an order compelling incumbent telcos to provide CLECs with customized routing services so CLEC customers who dialed 411 would be routed to the CLEC’s chosen operator service provider. He said UNE-P competitors now had no choice but to use the incumbent’s operator services. Brian Moir of the Large Users Group said the costs of telco-provided DA had driven large users to seek listings from other sources such as wholesalers. He said the options available to large businesses weren’t reasonable choices for households or small businesses, and incumbents had made “overblown claims” that the structural changes needed to accommodate DA competition would result in confusion, poor service and price increases.

Meanwhile, the subcommittee released a report on DA that concluded: “The status quo is not sustainable.” It urged policymakers and lawmakers to consider 2 major fixes in the DA system to make it more competitive: (1) Changing the DA database on a national basis to ensure it included all phone numbers, including wireless, and that all carriers providing DA services had nondiscriminatory database access. (2) Opening the DA market by abolishing monopoly control of 411 or any other abbreviated DA dialing string, either by surrendering the code for reassignment or developing a way to link customized routing or presubscription to the 411 code so it could be used by competitors. -- Herb Kirchhoff

NARUC Notebook…

FCC Wireline Competition Bureau Chief William Maher told state regulators at NARUC that the FCC had learned some hard lessons about the difficulties facing states in trying to interpret the current TELRIC pricing rules when it had to arbitrate a UNE pricing dispute in Va. this summer. The state-specific dispute between Verizon and 3 Va. CLECs over UNE rates landed in the FCC’s lap after the Va. Corporation Commission refused to arbitrate the case, citing sovereign immunity concerns. “We had difficulty interpreting how to apply the rules,” he said. “It was unclear at first how to apply TELRIC” to the facts in the Va. case. He said the experience of actually trying to apply the rules to a real UNE pricing dispute was educational and prompted the agency to take another look at the rules in the context of its current TELRIC review.

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NARUC elected new officers for 2003-04: Ga. PSC Comr. Stanley Wise as pres., Wash. Utilities & Transportation Commission Chmn. Marilyn Showalter as first vp and Iowa Utilities Board Chmn. Diane Muns as 2nd vp.