FCC Commits to Separations Overhaul, But Needs More Time
Eight years after setting an “interim” freeze on jurisdictional separations, the FCC tentatively decided to extend its expiration date one more year to June 30, 2010. Separations, which is governed by the FCC’s Part 36 rules, is the process by which incumbent local exchange carriers allocate interstate and intrastate regulated costs. In a rulemaking notice issued late Friday, the FCC pledged to work with states to finish the long-delayed separations overhaul. The Copps FCC has already taken steps to increase states’ involvement in the process, said Brad Ramsay, general counsel for the National Association of Regulatory Utility Commissioners, in an interview.
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FCC work on an overhaul for separations dates back to 1997, when the commission began a rulemaking saying network infrastructure had vastly changed since separations rules were designed. In 2001, the agency adopted a recommendation by the Federal-State Joint Board on Jurisdictional Separations to freeze Part 36 relationships and allocation factors for price-cap carriers, and allocation factors for rate-of-return carriers. The freeze was to expire in five years, or when comprehensive reform was adopted, whichever came first. When five years passed and no overhaul was ready, the FCC extended the expiration date three years, to June 30, 2009.
Still without an overhaul plan, the FCC tentatively decided Friday to extend the freeze again “to avoid the imposition of undue administrative burdens on incumbent LECs,” the commission said. ILECs haven’t had to prepare separations information since the freeze began eight years ago, the FCC said. If the freeze isn’t renewed, they “would be required to reinstitute their separations processes, and they may no longer have the necessary employees and systems in place” to do so, it said.
The FCC “is committed to working with the Joint Board to achieve comprehensive separations reform,” the agency said. Federal-state cooperation will be key to the process, it said. “Given the important role of the states and the value they bring to this process, the Commission will seek extensive state input with regard to comprehensive reform of the jurisdictional separations process,” it said.
Revamping separations has been a priority for acting Chairman Michael Copps since taking over the FCC, and he’s been very inclusive and cooperative with states, said NARUC’s Ramsay. The FCC consulted less with states when the freeze was last extended in 2006, creating more tension, he said. Upon becoming chairman, Copps reached out “almost immediately” to state members of the Separations Joint Board, pointing out potential logistical problems if the freeze were allowed to expire this June, Ramsay said.
State members of the Joint Board held extensive conversations last year on the planned overhaul, in preparation for the freeze’s expiration, Ramsay said. However, the revamp probably won’t happen until a full commission is in place, he said. Copps is now the only federal member of the Joint Board. Once the remaining two spots are filled, the Joint Board can vote on a recommendation and the FCC can put it out for comment, Ramsay said.
Comments on the proposed extension of the separations freeze will be due 14 days after the NPRM appears in the Federal Register, with replies due seven days later, the FCC said.