At the Summer Meetings of the National Association of Regulatory Commissioners (NARUC), the Committee on Telecommunications heard from various industry leaders. James Q. Crowe, the Chief Executive Officer of Level 3 Communications, suggested that a new model of regulation is needed. This new model should focus on two categories: users and service providers. The difference between these categories is one of privilege, responsibility and regulatory oversight. Except for monopolies, no company should be required to accept service provider status or accept basic service obligations. For companies choosing to be service providers, these companies must accept certain interconnection obligations and "be required to contribute to and participate in the provision of basic service." Other industry leaders speaking to NARUC's Telecommunications Committee included Dick Notebaert, CEO of Qwest Communications, Larissa Herda, CEO & Chairman of Time Warner Telecom, Inc., and Gabe Battista, Chairman and CEO of Talk America.
FCC Commissioner Martin addressed the NARUC Committee on Telecommunications about "Looking Forward." He stressed the need for FCC-state cooperation in order to meet the upcoming challenges facing regulators in local competition, deployment of broadband and universal service. He noted that the FCC should address performance measures and special access in the near future. He affirmed his support for a strong state role on numbering issues. He emphasized that a new TELRIC proceeding should be opened in the third quarter. In referring to the release of the Triennial Review Order (TRO) that Mr. Maher, FCC Wireline Competition Bureau Chief, said would be released sooner or later, Commissioner Martin noted that "it was already later." He said, however, that the TRO will clarify certain TELRIC pricing issues, will have specific criteria for the states to apply, some triggering mechanisms and some guidance on market definition.
With regard to the TRO, NARUC's Triennial Review Implementation Project (TRIP) Task Force held a lively five-hour workshop session before the Telecommunications Committee on Sunday, July 27. This workshop included panels on the 90-day and 9-month switching impairment proceedings, hi-cap loop and transport proceedings. TRIP's panels included representatives from the incumbent local exchange carriers (ILECs), competitive local exchange carriers (CLECs) and Consumer Advocates. Regarding the 90-day and 9-month cases, the ILECs argued that the availability of switching equipment for competitors should be the main determining factor in the impairment analysis. The CLECs, on the other hand, stressed the importance of operational impairment. If operational impairment is found, there would be no need to look at economic impairment.
Four resolutions were passed by the Telecommunications Committee, covering State Telecommunications Service Priority Tariffs, Pooling, Verizon's Forbearance Petition and the Lifeline/Linkup programs. They are discussed on the following pages.
Resolution on Recommendations For Review of State Telecommunications Service Priority (TSP) Tariffs
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WHEREAS, In 2001, NARUC created the Ad Hoc Critical Infrastructure Protection Committee to examine potential recommendations to States and municipalities to, among other things, address national security and emergency preparedness (NS/EP) measures; and
WHEREAS, Telecommunications plays a fundamental and vital role in ensuring that States and municipalities can effectively carry out their NS/EP responsibilities; and
WHEREAS, The telecommunications service priority (TSP) program provides the means for all entities engaged in NS/EP activities to ensure that their most critical telecommunications lines will be restored on a priority basis under all circumstances; and
WHEREAS, The TSP program can, therefore, can play a vital role in protecting the nation's homeland security by providing priority restoration for communications services that are essential for State and local emergency service providers, including law enforcement, fire, ambulance, and 9-1-1 centers, especially during disasters; and
WHEREAS, Telecommunications service providers charge for TSP services, primarily under State tariffs; and
WHEREAS, Most of these tariffs were established in the 1980s and were designed to recover the cost of implementing the TSP program as well as the day-to-day cost of operations; and
WHEREAS, Most of these tariffs have remained unchanged since their initial adoption, even though the TSP program is now well established and initial implementation costs may no longer be relevant; and
WHEREAS, There is a very large State-to-State variation in local exchange companies' TSP tariffs; and
WHEREAS, Many State and local organizations that operate emergency operations are having difficulty participating in the TSP program because of budgetary constraints; and
WHEREAS, It is important that the TSP tariffs be reasonable and affordable and reflect the on-going operational costs of providing TSP service so that organizations that provide critical NS/EP functions are not unreasonably prevented from participating in the TSP program; now therefore be it,
RESOLVED, That the Board of Directors of the National Association of Regulatory Commissioners (NARUC) convened in its July 2003 Summer Meetings in Denver, Colorado recommends that State public utility commissions review, and as necessary and as authority permits, require revisions to the respective TSP tariffs in their respective jurisdictions to ensure they are fair, reasonable, and affordable to the organizations who purchase such services in order to promote the homeland security.
Sponsored by the Committee on Telecommunications and Ad Hoc Committee on Critical Infrastructure
Adopted by the NARUC Board of Directors July 30, 2003
Resolution Regarding Pooling
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WHEREAS, The Federal Communications Commission (FCC) has ordered the implementation of number pooling throughout the North American Numbering Plan (NANP) in order to conserve telephone numbers and to use them more efficiently; and
WHEREAS, The FCC originally mandated that number pooling should be implemented only in the top 100 Consolidated Metropolitan Statistical Areas (CMSAs) covered by the NANP because those are the areas where telecommunications competition is most likely to develop; and
WHEREAS, Number pooling has been deployed, both through delegation authority and through FCC orders, originally within the top 100 CMSAs covered by the NANP on an area code by area code basis; and
WHEREAS, By its Fourth Report and Order in the Numbering Optimization Docket, the FCC reduced the number of rate centers in which pooling is mandatory, from those within the top CMSAs to those within the top 100 MSAs; and
WHEREAS, In delegating to the States authority to implement area code relief, the FCC found that States have better knowledge of local circumstances; and
WHEREAS, Number pooling is considered to be the most effective number conservation tool in preserving the lives of existing area codes; and
WHEREAS, Many area codes include territory that falls within a top 100 MSA as well as territory that falls outside a top 100 MSA; and
WHEREAS, In many area codes with territory both in a top 100 MSA and outside a top 100 MSA, pooling has been implemented in all rate centers; and
WHEREAS, In many rate centers located entirely outside a top 100 MSA, two or more carriers are offering service to customers and are using telephone numbers to provide that service; and
WHEREAS, Telephone numbers in rate centers entirely outside the top 100 MSAs are being stranded in carriers' inventories because the FCC does not currently require carriers to pool numbers in those rate centers; and
WHEREAS, In its recent Fourth Report and Order in the Numbering Optimization Docket, the FCC has specifically exempted from the pooling requirement rural telephone companies and Tier III CMRS providers that have not received a request to provide local number portability, and carriers that are the only service provider receiving numbering resources in a given rate center; and
WHEREAS, Not all States fit the demographics of the FCC's national pooling plan and, as a result, are shut out of, or reduced to marginal participation in, pooling and its subsequent benefits; now therefore be it
RESOLVED, That the Board of Directors of the National Association of Regulatory Commissioners (NARUC) convened in its July 2003 Summer Meetings in Denver, Colorado, urges the FCC to reconsider its decision to limit number pooling to the top 100 MSAs; and be it further,
RESOLVED, That NARUC urges the FCC to allow States to implement number pooling, without petition to the FCC, in all rate centers as each State sees a necessity, regardless of whether a rate center falls within one of the top 100 MSAs, and be it further
RESOLVED, States with delegated authority should not have their pooling authority narrowed; and be it further
RESOLVED, That the NARUC General Counsel is hereby authorized to file and take any action to further the intent of this resolution.
Sponsored by the Committee on Telecommunications
Adopted by the NARUC Board of Directors July 30, 2003
Resolution on Verizon Forbearance Petition
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WHEREAS, On July 1, 2003, the Verizon Telephone Companies (Verizon) filed a petition for expedited forbearance, pursuant to section 10 of the Telecommunications Act of 1996, 47 U.S.C. § 160, requesting the Federal Communications Commission (FCC) to "immediately forbear from its decision permitting UNE-P carriers to collect per-minute access charges from long distance carriers . . . and . . . [to] forbear from applying its current TELRIC pricing rules to the . . . UNE platform;" and
WHEREAS, After six years of relative uncertainty, the pricing methodology originally mandated by the FCC has been substantially upheld at the State and federal levels; and
WHEREAS, The FCC is expected to initiate a generic review of the TELRIC Methodology this year; and
WHEREAS, With implementation of the Triennial Review and the FCC's recent focus on intercarrier compensation issues, and its upcoming proposed broadband rulings, now is the time to provide additional certainty in the regulatory structure; and
WHEREAS, Growth in competition has varied among the States, so that national forebearance is premature; and
WHEREAS, The merits of the Verizon petition hinge on the reasonableness of the pricing of UNE-P, which may be affected by upcoming reviews of both TELRIC and UNE impairment; and
WHEREAS, The FCC is required by federal statute to address the Verizon petition within fifteen months and has requested comments and reply comments from the industry by August 18, 2003 and September 2, 2003, respectively; and
WHEREAS, Forbearance may be appropriate on a State-by-State or market-by-market basis where market conditions warrant; and
WHEREAS, The NARUC Telecommunications Committee believes that a forbearance proceeding is not the appropriate vehicle for an analysis of the national TELRIC methodology before the FCC; now therefore be it
RESOLVED, That the Board of Directors of the National Association of Regulatory Utility Commissioners (NARUC), convened in its July 2003 Summer Meetings in Denver Colorado, opposes, for the reasons stated herein, the Verizon forbearance petition and respectfully requests that the FCC expeditiously reject it; and be it further
RESOLVED, That the NARUC General Counsel be directed to file and take any appropriate actions to further the intent of this resolution.
Sponsored by the Committee on Telecommunications
Adopted by the NARUC Board of Directors July 30, 2003
Resolution on The Joint Board Recommended Lifeline/Linkup Decision
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WHEREAS, On April 2, 2003 the Federal-State Joint Board on Universal Service (Joint Board) presented the Federal Communications Commission (FCC) with a series of recommendations to improve the Lifeline and Link-Up programs; and (Joint Board) regarding modifications to the Lifeline and Link-Up programs; and
WHEREAS, In its Recommended Decision, the Joint Board recommended (1) the FCC expand the default federal eligibility criteria to include an income-based criterion and additional means-tested programs, (2) the FCC to require States, under certain circumstances, to adopt verification procedures within one year, and (3) the FCC provide outreach guidelines for the Lifeline/ Link-Up program; and
WHEREAS, The Federal-State Joint Board states that data suggests that there may be a strong connection between Lifeline/Link-Up assistance and telephone penetration; and
WHEREAS, On June 9, 2003, the FCC released a Notice of Proposed Rulemaking seeking comment on the Recommended Decision of the Federal-State Joint Board on Universal Service; and
WHEREAS, The Joint Board estimated that the expansion of federal eligibility criteria to include an income-based criterion alone could add up to one million new Lifeline subscribers and of those about one quarter would be new telephone subscribers; and
WHEREAS, The Joint Board also recommended that the FCC seek more information about the reasons for differences in low-income penetration rates over time and among the different States; and
WHEREAS, The Joint Board suggested that the FCC adopt a voluntary information collection from the States regarding their eligibility and verification criteria, whether the FCC's changes to the program have had a positive impact on penetration rates; whether the State has experienced administrative burdens or inefficiencies; whether outstanding unpaid balances for local/toll services have created barriers; and to obtain more information about how an appeals process for the termination of Lifeline benefits would work; now therefore be it
RESOLVED, That the Board of Directors of the National Association of Regulatory Utility Commissioners (NARUC), convened in its July 2003 Summer Meetings in Denver, Colorado, commends both the Joint Board and the FCC for undertaking this review; and be it further
RESOLVED, That NARUC agrees with the Joint Board that the FCC's Lifeline/ Link-Up programs are a key element in ensuring the goals of Universal Service; and be it further
RESOLVED, That NARUC applauds the Joint Board's statements in support of the State efforts to establish unique rules, guidelines and eligibility criteria for their State Lifeline/Link-Up programs; and be it further
RESOLVED, That NARUC agrees with the Joint Board that the current program-based default federal eligibility criteria be expanded to an income-based standard of 135% of the Federal Poverty Guidelines, the Temporary Aid to Needy Families program, and the National School Lunch free lunch program; and be it further
RESOLVED, That NARUC supports the Joint Board's recommendation to encourage States to adopt federal eligibility standards and verification procedures, but not to impose these standards and procedures on States that currently provide Lifeline/Link-Up support; and be it further
RESOLVED, That NARUC agrees that the FCC should encourage all States to require carriers to notify current program beneficiaries of a decision to terminate their participation in the program and to implement termination and appeal procedures and supports proposed adoption of a federal appeals time period of 60 days; and be it further
RESOLVED, That NARUC supports the creation of automatic enrollment programs to expand the base of beneficiaries in the Lifeline/Link-Up program; and be it further
RESOLVED, That NARUC supports the Joint Board's recommendation asking the FCC not to impose specific outreach procedures and agrees that the creation of further specific outreach programs should be established by the States following general guidelines set out by the FCC; and be it further
RESOLVED, NARUC respectfully requests the FCC convene a workshop via conference call to discuss in further detail the proposed voluntary State reporting program and other relevant implementation issues that arise or are related to the final Order on this issue; and be it further
RESOLVED, That the NARUC General Counsel be directed to file and take any appropriate actions to further the intent of this resolution.
Sponsored by the Committee on Consumer Affairs and the Committee on Telecommunications
Adopted by the NARUC Board of Directors July 30, 2003