O'Rielly Says Separations Joint Board 'Unlikely' to Agree on Plan, Seeks Prolonged Freeze

O'Rielly's comments were in a statement on an NPRM Thursday that proposes to implement previous joint board recommendations (see 1710270059) to harmonize Part 36 separation rules consistent with FCC changes streamlining Part 32 telco accounting rules a year ago (see 1704250018 and 1702230051). "We further our goal of updating and modernizing the Commission’s rules to minimize outdated compliance burdens on carriers and to free up scarce resources that can accordingly be used to expand modern networks that bring economic opportunity, job creation and civic engagement to all Americans," said the notice in docket 14-130 in Friday's Daily Digest. Comments and replies will be due 30 and 45 days after publication in the Federal Register.

"I hope that the Commission will conclude this proceeding promptly," O'Rielly said. "The rule changes proposed in this document are ministerial in nature and they received the unanimous support of the Joint Board."

More broadly, O'Rielly said he's "disappointed to note that the Joint Board is unlikely to come to a satisfactory conclusion on its referral to review and consider recommendations pertaining to longer-term reform." After much discussion with panel members, "I have come to conclude that the viewpoints are so vastly different on this complex issue that finding commonality is not going to be possible in the near term. I have notified the Chairman of such and recommended that the Commission immediately pursue a longer extension of the current freeze than what has been done in the past (i.e., 15 years)." The last extension adopted in May 2016 was for 18 months through Dec. 31, 2018 (see 1705150064).

O'Rielly also suggested the FCC use its own authority to consider pending petitions to permit "minor modifications to frozen category relationships, particularly in instances where the relevant states" haven't objected. He said he discussed the idea with Chairman Ajit Pai and staff. Both the freeze and the modifications "would be consistent with the recent record on separations reform," he said. "Additionally, absent a Joint Board consensus approach, these two steps would pave the way for market forces, technological changes, and consumer preferences to ultimately resolve longer-term separations issues."

Joint Board state members "remain committed to finding solutions," said State Chair Sarah Hofmann, a Vermont public utility commissioner. Congress directed the board to revamp separations nearly 17 years ago, she said. "The proposed additional 15-year extension, at a minimum, seems inconsistent with Congress’ instruction that the board 'shall prepare' a recommended decision for 'prompt review and action.'"

Another state member said it's too early to give up on the reform effort. Joint boards "present a unique opportunity for state and federal regulators to work together to formulate public policy solutions that can be enduring, forward-looking and provide much needed certainty to this rapidly changing industry," said Sally Talberg, Michigan Public Service Commission chairman. "As a member of two of these boards appointed by the FCC, I remain committed to the process and to understanding the perspectives of other members with the goal of trying to reach consensus. These issues are complex and controversial but we have an obligation to consumers and the industry to work together to try to find common ground." An FCC spokesman and other federal joint board members didn't comment Friday.

O'Rielly recently said he and state members of a USF joint board are also at loggerheads over proposed changes to the industry contribution system that funds the federal telecom subsidy programs. O'Rielly, who also chairs that board, opposes what he said are state proposals to assess broadband service, which he vowed wouldn't happen on his watch (see 1802060028).