AT&T and Sprint Nextel Demand New York PSC Reform Intrastate Access Charges Now
Sprint Nextel and AT&T oppose a joint proposal put forward in the New York Public Service Commission’s proceeding on its state USF and intrastate access charges. The two major telcos have argued for months that intrastate access issues should be resolved in litigation, not as part of a multiparty negotiation. “There should be no further delays in reforming New York intrastate originating access rates,” Sprint said Friday in its comments to the PSC (http://xrl.us/bn9sqr), calling Verizon’s current proposal, introduced in November and attracting wide support, “an effort to delay reform further.” Parties who signed on to the November joint proposal include PSC staff, the New York State Department of State Utilities Intervention Unit, the Cable Telecom Association of New York, Verizon, Verizon Wireless, Frontier, Level 3, a group of smaller ILECs, Time Warner Cable, tw telecom and Windstream.
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The Verizon joint proposal calls for a status quo treatment of intrastate access charges as the FCC sorts out the issues as well as urges the PSC to hold off on changing the state’s Targeted Accessibility Fund (http://xrl.us/bn5pdo). AT&T encourages all parties to move to litigation, arguing it’s “consistent” with earlier agreements (http://xrl.us/bn9sq5). Several other New York stakeholders, including Verizon and the PSC staff, issued statements supporting their joint proposal. The conflict began after the PSC adopted its $17 million state USF in August (CD Aug 17 p9), which called for majority stakeholder consensus on intrastate access issues or a movement toward litigation.
Companies “have been permitted to charge rates that are far above the actual cost of the function provided on both originating and terminating access,” Sprint added, which has happened for years. AT&T said these companies are now trying to “derail” reform. “It is small wonder they resort to this desperate tactic,” AT&T said. “The FCC has given this Commission both a roadmap and a green light to reduce originating access charges in New York, a solution for which Verizon itself is one of the leading advocates. By requiring New York LECs to move quickly to reduce their intrastate access rates, the Commission will join more than 25 other state jurisdictions that have required similar actions by law or regulation to benefit consumers and to improve competition and business opportunities in their states.”
Verizon is promoting a joint proposal, however, as are many other parties in New York, rather than turning to litigation. The PSC should be careful not to pass any reform that might conflict with pending FCC reform, the telco again cautioned Friday (http://xrl.us/bn9ssg), pointing to what’s “likely to be a finely-tuned balance of a myriad of conflicting interests, aimed at achieving some level of overall fairness for all market participants” on the federal level. The proposal should be adopted because it’s in the “public interest,” PSC staff said (http://xrl.us/bn9sur). Cablevision and Time Warner Cable showed support in joint comments: “Further action on intrastate access charges in New York is not warranted at this time,” they said (http://xrl.us/bn9su3), saying the proposal doesn’t mean open-ended deferral. Parties should “reconvene” if nothing happens by July 2014, they said. Smaller ILECs praised the joint proposal as “reasonable” and said it’s a “rational continuation of the existing intrastate exchange access rates and rate structures” not affected by FCC reform (http://xrl.us/bn9su9). They warned against “the prolonged and otherwise protracted expenditure of resources that extensive litigation of these issues at this time may create.” Level 3, tw telecom and Windstream jointly endorsed the proposal (http://xrl.us/bn9sxu).
The New York Department of State weighed in with support. Its Utility Intervention Unit, a part of its consumer protection division, has monitored the proceeding and said the PSC “should focus its attention on overseeing the implementation process for the transition of terminating access charges rather than diverting resources to litigating on the state level an issue that is unsettled on the federal level” (http://xrl.us/bn9sxf). Sprint dismissed this argument and said FCC consideration of such issues is nothing new.
T-Mobile declined to submit comments but told PSC Administrative Law Judge Howard Jack in a Nov. 19 letter (http://xrl.us/bn9syt) that it “takes no position with respect to whether further action by this Commission with respect to intrastate switched access rates is required at this time,” citing satisfaction with the reform begun as part of the FCC’s November 2011 USF order. T-Mobile doesn’t oppose the PSC adopting the proposal, it said, though reiterated its belief that wireless providers shouldn’t have to contribute to New York’s Targeted Accessibility Fund.
Reply comments are due Jan. 18, and the judge may decide to hold oral hearings.