State Telecom Regulators Call for More Control of Local Rules

NARUC is weighing the idea of “dusting off” and reviving its 2005 white-paper proposal for “cooperative federalism,” said Brian O'Hara, NARUC legislative director-telecommunications, technology and water. Under this concept, the FCC would generally set the floor for state telecom rules, but state regulators would be free to go above that floor if they saw the need. The proposal includes eliminating the idea of treating local and long-distance carriers differently. “The paper found that general federal standards made sense across all jurisdictions,” O'Hara said. “But the FCC has not been the most effective at consumer protection and enforcement. The states would be better.” He said NARUC may soon release a fresh proposal based on the concepts in the 2005 paper.

A former state regulator said he'd “like to start with a blank slate.” Charles Davidson, director of the Advanced Communications Law and Policy Institute at New York Law School and a former New York state utility commissioner, said that unlike the “social contracts” struck with the telecom industry in the past, there’s no need to regulate rates in a new law because of the emergence of competitive alternatives. Any proposed law should cover such new, relatively untouched areas as net neutrality. “That need for economic regulation is gone,” Davidson said. “We're doing okay on ubiquity and affordability.” Regulators should explore “what is it that we don’t have yet that we need,” he said.

Legislators and regulators seeking to overhaul the ‘96 Act need to “think about consumer expectations” for telecom services, said Geoffrey Why, commissioner of the Massachusetts Department of Telecommunications and Cable. Authorities should take into account consumers’ firm expectations about the strength of consumer safeguards, the reliability of 911 and other public safety lines and the general quality of service delivery, he said. “There are places that do this job better than others.” In general, Why said “states do these three things well."

Taking issue with some of Why’s arguments, Montana Public Service Commission Chairman Travis Kavulla said he agreed more with “the blank slate principle.” Kavulla said competition, not regulation, is the best way to deal with quality-of-service issues. When “federal agencies pick winners and losers,” they tend to pick not the most qualified firms but those that lobby the best, he said. Kavulla criticized the FCC’s wireless and broadband maps as “another version of unreality.” He agreed with Why that there are “lots of places” where rate regulation and quality-of-service rules are still needed because there’s no competition to the incumbent phone company.

The state regulators grappled with how to fix federal and state USF, discussing ways to broaden the pool of contributing providers, make the funds technology-neutral and keep the rules consistent for both federal and state funds. “I honestly don’t know how you solve the contribution issue,” Kavulla said. “There has to be a way to get there,” Why said. “We want the FCC to think thoughtfully about this.” FCC officials speaking at the NCTA-sponsored conference said the agency is continuing work on ways to reform the contributions telcos -- and their subscribers -- make to USF.

State regulators volunteered a couple of things the FCC has done right in their eyes, when asked by moderator Richard Cimerman, an NCTA vice president. Why praised the commission’s lifeline reform efforts while O'Hara and Davidson lauded the agency developing a National Broadband Plan. Kavulla declined to follow suit, cracking a joke instead. “I like the timely manner in which they handle dockets,” he quipped, bringing laughs from the audience.