Baum Says Wireless, Cable Unlikely to Support Latest USF Plan
LAS VEGAS -- Ore. PUC Comr. Ray Baum -- chairing a NARUC-sponsored group offering the latest proposal for intercarrier compensation reform -- said he hopes to present a final version to the FCC by May 15. But he conceded that wireless and cable companies are generally unlikely to support that plan, and many members of NARUC and NASUCA have questions. Baum has asked industry to finish its review of the plan and report back by April 21.
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“It’s an industry-based plan and we're looking forward to them coming forward with a plan that has the support of the industry,” Baum told us at the CTIA convention here: “It probably won’t have wireless support. It probably won’t have cable support, but it probably will have what looks like a core group of small, midsized and large ILEC support, as a basis for maybe moving the discussion forward… It won’t be a perfect plan. But right now we're looking for industry to coalesce around something. Without industry coalescing around something, I don’t believe anything state regulators do on their own will get anywhere.”
Baum said discussions have progressed about as well as can be expected. “The same issues that concern state regulators concern NASUCA… SLC increases, and are there consumer benefits in there?” he said. “With the political environment, the compromises that need to be made, it’s probably about as far as the industry can go and have any kind of core consensus.”
In a discussion at the conference on USF reform, a related topic, Baum said that any long-term USF solution must be palatable to rural America or it will face massive resistance in Congress. “Count how many rural senators there are in the U.S. -- there’s more rural than there are urban,” he said. The Commerce Committee “is largely a rural committee… If they're going to do anything they're probably going to do something that will save the system for 4 or 5 more years… At the end of the day, what we've got to do is move the carriers to flatter rates, put them on the road to bill & keep.”
Paul Garnett, CTIA asst. vp-regulatory affairs, said: “Any time you get to a situation where an individual is going to decide their own future… they're going to want more… That’s reality.” Panelists clashed on whether USF distribution should be based on an embedded costs or a forward-looking cost model or some other approach. Susan Gately, senior vp-regulatory affairs of Economics & Technology Inc., encouraged the industry to push for a forward-looking cost support mechanism, though doing so would be an uphill fight. “Political situations change,” she said. “What’s untenable today may be tenable at another point in time.”
But Donald Jackson, dir. of the Tri County Telephone Assn. in Wyo., said a forward-looking cost model is “tantamount to what comes from the north end of a south-bound cow.” “We have lived with forward-looking costs in our state for 10 years and I would best describe the rate structure in the state as regulatory chaos,” he said. “I don’t pay forward looking wages… I don’t pay a forward-looking dividends to my shareholders.”
Comr. Larry Landis of Ind. said either model is problematic. “Having sat through a UNE proceeding and having listened to 40 hours of debate on what amounted to how many angels can dance on the head of a pin, the fact of the matter is that either model can be manipulated by adept lawyers and economists and accountants,” Landis said.