‘We’d Have Nothing To Do!’

by on April 24, 2008 · 5 comments

Several state public utility commissioners are pleading with the Federal Communications Commission to preserve unnecessary, burdensome and anticompetitive accounting requirements that I have discussed here and here.

Sara Kyle, Tre Hargett and Ron Jones of the Tennessee Regulatory Authority say they review the data required of telephone companies, even if their review has little or nothing to do with the purpose for which the data was originally required.
This information is particularly useful in evaluating competition levels in Tennessee; further, such information may be necessary in fulfilling our Commission’s responsibilities should we decide that a state universal service fund is necessary.

The argument the FCC essentially is hearing is without the data there would be less work for state regulators, which would diminish their power.   

The state commissioners think they have a chance to persuade FCC commissioners Robert M. McDowell and Deborah Taylor Tate to reject the AT&T petition along with one or both of the commission’s two Democrats.

The question McDowell and Tate ought to be asking is whether it is the role of the feds to collect information primarily for the use of the states?  The states can do that for themselves.

Of course it rankles state officials when change is forced upon them.  They perceive and resent the regrettable implication that they cannot be trusted to know what’s right.  So it’s not surprising they’re beseeching McDowell and Tate to let them prune the rules thicket.  According to the Arizona Corporation Commission, 

[T]he Bell Operating Companies (“BOCs”) in particular are using the forbearance process to achieve wholesale changes to FCC rules and regulations when in fact these changes should be going through the rulemaking process … the type of changes sought in these petitions should be first addressed by the Separations Joint Board and then through the rulemaking process with widespread industry participation …

Even state regulators acknowledge that some regulatory reform is needed in this area.  It’s “under consideration.”

Perhaps the FCC’s cost allocation rules could be simplified to reflect the reduced uses of separations results. However, wholesale abandonment of the existing rules through the forbearance power is not justified. The Separations Joint Board is currently considering the same separations reform issues raised by this forbearance petition. In 2006, the Commission asked the Joint Board to examine numerous separations questions that affect the obligations of petitioners in this proceeding. The scope of that proceeding is quite broad, including “whether there is a continued need to prescribe separations rules” for price cap incumbent LECs.

McDowell and Tate should know this process will probably lead nowhere.  Congress almost eliminated the rules in 1999 but relented when these same arguments were made, and we’re still debating.

Regulators presumably like their jobs. They want to regulate.  One of the principle reasons Congress created the forbearance procedure is because it was skeptical that regulators would have any enthusiasm for deregulation.

McDowell and Tate shouldn’t fall for this.  There’s a big picture here, which is we need a strong forbearance process.  If the FCC establishes a pattern of rejecting forbearance petitions on picky and technical grounds we could wind up with a forbearance process in theory only, not in practice.


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