Clarify UNE Rate-Setting Jurisdiction, State Regulators Say
NASHVILLE -- The FCC should give states clear jurisdiction to set rates for unbundled network elements provided under section 271 of the Telecom Act, state regulators said on a CompTel panel Tuesday. States are the “most capable government entities to protect consumers,” said Arizona Corporation Commissioner Kris Mayes. States are closer to the people and know the competitive environment within their boundaries better than the FCC, agreed Tennessee Regulatory Authority Chairman Eddie Roberson. “I understand the justification for [federal] preemption, and maybe in some cases it’s appropriate, but I think that we need to go very slowly in that area.”
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Bells are disputing state jurisdiction over rate setting in Arizona and Tennessee. Qwest has protested Arizona’s rate setting and the state commission will soon file briefs in the 9th U.S. Circuit Court of Appeals on the matter, Mayes said. AT&T has taken Tennessee to district court over the same issue, Roberson said.
The FCC should act on a Georgia petition asking the FCC to clarify whether states have jurisdiction over rate setting, Mayes said. The petition has lingered for two years. “This is essentially a states’ rights issue,” she said. States have historically set rates and should be allowed to continue, she said. “There is no federal preemption” and “there is nothing that would be thwarted on the federal level by allowing the states to do this.” Roberson agreed. If the FCC decides states lack jurisdiction, however, it should at least look at state records before making a determination, he said.
Arizona is “very strongly opposing” Qwest forbearance, Mayes said. Granting the petition would “crush” the competitive telecom industry in her state, she said, and Qwest’s competition measurements aren’t detailed enough. For example, though in Phoenix competition for midsized businesses in Phoenix is healthy, it’s lacking for small and large companies, she said. Meanwhile, Qwest and Cox own a duopoly for residential customers, she said.
Qwest’s argument that Cox provides enough facilities- based competition to justify forbearance is “specious,” Mayes said: “Cox is making inroads in certain markets, but really is not an effective competitor across markets.” Strong competition in the midsized business market is still “reliant on Qwest facilities,” she said.
The FCC should set standards for forbearance filings, to stop petitions that use inadequate data, state regulators said. If the commission had tight standards, the Qwest petition would be bounced immediately for “insufficiency reasons,” Mayes said. The petition is inaccurate and uses misleading data, listing as competitors bankrupt companies and others that have never done business in Phoenix, she said. The FCC should also require companies to provide more specific data using ZIP codes, she said.
State regulators said they support a proposed universal service change ending the “identical support rule” that bases USF subsidies on the cost of running incumbent telecom companies. Support should be based on the provider’s own costs, Roberson said. Incumbents and CLECs shouldn’t be treated differently, Mayes agreed. CLECs and eligible telecom carriers should be prepared to show their costs, just as incumbents do, she said.
States are ready to participate in a USF program giving subsidies to increase broadband deployment, regulators said. It’s an “entirely appropriate role” for states, Roberson said. Tennessee is already working with the company that headed Connect Kentucky, he added. Arizona may have to adjust staffing, but playing a part is “something we could do,” Mayes said.