State Regulators Create Task Force and Adopt Resolutions on Complicated FCC Relationship

BALTIMORE -- State regulators are confronting an increasingly tortured relationship with the FCC, creating a task force to address it Monday at the NARUC meeting. It consists of seven commissioners and is already official and active. Meanwhile, two NARUC resolutions directly address the fractured FCC relationship, as was expected (CD Nov 2 p12), and NARUC adopted both resolutions as policy Tuesday after they advanced through the telecom subcommittee and committee. One urges FCC referral to the Federal-State Joint Board on Universal Service as well as to the Federal-State Joint Board on Jurisdictional Separations on major decisions, and another addresses a pending Supreme Court case on the Chevron doctrine, looking at the risk of federal overreach of authority.

"I am launching as of today a new task force -- a presidential task force -- on federalism and telecom,” said Washington Utilities and Transportation Commissioner Phil Jones, NARUC’s new president. He has belonged to the NARUC telecom committee since 2005 and wants to revisit the idea that “states do have important roles to play,” he told fellow committee members. “It’s time” to begin the task force, an item discussed with Telecom Committee Chairman John Burke in recent months, Jones said. He cited the passage of California’s “'VoIP deregulation bill,'” FCC Commissioner Ajit Pai’s call for task forces and AT&T’s petitions with the FCC on a transition to an Internet Protocol world. “We are going to have tensions,” Jones acknowledged, noting a lawsuit against the FCC in the 10th U.S. Circuit Court of Appeals over last year’s USF order (CD Nov 13 p5): “We do of course have litigation pending with the FCC.” But he wants “healthy dialogue,” he said.

The FCC and industry want expediency and speedy deployment, while state commissioners want consultation, panel and resolution discussions revealed. Multiple state commissioners urged more FCC consultation with joint boards on USF and separation decisions. “Make no mistake about it, this is a direct strike against the authority of the state regulators and their role as instituted by Congress,” Indiana Commissioner Larry Landis said Monday. Pennsylvania Commissioner Jim Cawley is “not only frustrated” but “mad,” he said: “Ignoring us! You can only take so much of this before you feel like a potted plant.” Panelists pointed to the FCC’s November 2011 USF order, which Landis called the first “major reform” in 30 years, and a lack of consultation then.

USTelecom Vice President-Industry and State Affairs Robert Mayer warned against delaying the FCC and the deployment of hundreds of millions of Connect America Fund dollars. There’s critical “nuance and details of getting these models adopted,” he said of CAF Monday. He fears significant sums of money won’t be deployed until 2014 or 2015, he told the NARUC telecom subcommittee Sunday. States can participate through ex parte communication, the FCC’s virtual workshop and other ways, but the joint board referral process would introduce “further opportunities for delay,” he said. Delays already exist, he said. The FCC hasn’t “acknowledged that the CAF Jan. 1 deadline [to support price cap areas] will be missed,” but no one he’s talked to “on the state or federal level” believes the deadline will be met, he said. “The commission is under the gun,” Mayer said. “There’s no question about it. They have encouraged us to do everything we can do as a coalition to expedite the process.” He warned of similar delays in a joint board referral provision within a summer NARUC resolution.

Landis slammed that line of thinking when Mayer raised concerns Monday. Connect America Phase I was the “latest in a series of flawed models from the FCC,” he said, pointing to two-thirds of the $300 million available being left on the table. Discussion is being “minimalized” and “marginalized” and the FCC should have consulted state commissioners before deciding on USF reform, he said. “I would say ditto,” said South Carolina Commissioner Randy Mitchell, the sponsor of this NARUC meeting’s resolution on referral. State review opportunities were “inadequate” in a process that was “just ridiculous,” Cawley said.

Telco executives criticized the CAF modeling Sunday afternoon and concerns about models going forward. AT&T refused to accept any money because the obligations were unclear and would potentially make it liable to any auditors, said Public Policy Vice President Joel Lubin. The idea that the telcos don’t want the money or to serve the unserved areas is “absurd,” said Windstream Vice President-Federal Government Affairs Eric Einhorn. In the future with CAF, “we need to get a model up and running as fast as humanly possible,” Lubin said. Then the FCC needs “a clear vision of what the obligations are” and to set up a pathway to the auction rules, he said.

The other adopted NARUC resolution addresses Arlington, Texas, et al. v. FCC and the question of the Chevron doctrine before the Supreme Court. The doctrine concerns a federal agency’s latitude to interpret statute. “This resolution is incredibly timely,” said Best Best communications attorney Nick Miller, representing the municipalities in the case. Briefs are due Monday, and any supporting amicus brief from NARUC would have to be filed within a week, he said. Oral argument is scheduled for Jan. 16, he said.

The new NARUC task force should see “tentative results” by the association’s summer 2013 meeting in Denver, Jones said. The group should “start meeting immediately” in what he described as a “heavy lift.” The task force will reach out “to all the stakeholders” and welcome input, said Michigan Commissioner Orjiakor Isiogu, the new initiative’s chairman. Other members include Commissioners Catherine Sandoval of California, Ronald Brisé of Florida, Paul Kjellander of Idaho, Chris Nelson of South Dakota, Ryan Palmer of West Virginia and Cawley. Burke tried to pick commissioners from a range of states and regulation philosophies, he said, saying they all readily said yes to joining. Burke and Jones have “worked together” many times, and the start of the task force wasn’t even a question, Burke said. The team will consider all perspectives, but “at the end of the day it’s going to be a NARUC product,” Isiogu said of their efforts.