Calif. COLR Rulemaking Intrigues Other States at NARUC

WEST PALM BEACH, Fla. -- A California rulemaking on modernizing carrier of last resort rules could inspire similar proceedings elsewhere, state and industry officials signaled at the NARUC conference Monday. The California Public Utilities Commission last month opened a rulemaking that took a fresh look at COLR rules after rejecting regulatory relief for AT&T (see 2406200065).

California’s COLR rules are nearly 30 years old, CPUC Commissioner John Reynolds said during a NARUC panel with telecom industry officials. Moreover, the rules are tech-neutral and don’t require copper, Reynolds added: The state simply expects carriers to provide basic service to those who request it. With the rulemaking planned for this fall, the CPUC wants to make sure there are no barriers to using newer technologies, he said. “Carriers are free to retire copper,” Reynolds stressed. The state doesn’t prohibit wireless, though there will be a “technical question” of whether it’s the best way to serve customers.

“South Dakota never really wants to follow California,” joked the panel’s Republican moderator, South Dakota Public Utilities Commissioner Chris Nelson. “But … I’m really looking forward to the rules that you all come up with.” When the CPUC finalizes rules, other commissions could consider if any of the changes would solve their state’s problems, he said. After the panel, Nelson told us that, while his commission is unlikely to propose a COLR rulemaking, it would consider the idea if a regulated entity requested one.

It makes sense having a COLR rulemaking like California’s, agreed panelist Kara Semmler, South Dakota Telecommunications Association's executive director. However, she said her state’s COLR rules haven’t stopped rural carrier members from transitioning to fiber. After the panel, Semmler clarified that SDTA wouldn’t request such a proceeding because its members like the existing rules. However, if another entity requested discussing possible updates, SDTA wouldn’t say no. Semmler is interested in seeing what California comes up with, she added.

Massachusetts would consider discussing COLR rule changes, Karen Charles, the state's Department of Telecom and Cable commissioner, said from the audience. Charles agreed some parts might be outdated, but said “there are pieces that are still critical” and must be “retained.” Charles disagreed with scrapping COLR obligations altogether, which she said would be like “throwing the baby out with the bathwater.”

Ziply Fiber supports making COLR rules “less of a burden and more of a tool,” said Jessica Epley, vice president-regulatory affairs. Forcing carriers to maintain unused, energy-dependent copper networks is “super expensive,” she said. In states where Ziply operates, including Oregon and Washington, COLR rules aren’t tech-agnostic and don’t allow the company to reach areas with fixed wireless but they require telcos to print phonebooks, she said. COLR rules are also outdated because they view access by exchange rather than location, she said.

COLR requirements were "created out of monopolistic environment ... years and years ago,” said Lynn Follansbee, USTelecom vice president-strategic initiatives. Incumbent local exchange carriers agreed to heavy regulation in exchange for a guaranteed income stream, she said. But today, it’s a big expense to maintain copper for the few customers who use it, and competition is considered to be a better way to expand networks, Follansbee said. A voluntary or auction approach to COLR obligations might work, but it would need to be competitively neutral and possibly include financial support, the USTelecom official said. “But to require the … ILEC to hold onto that obligation is very outdated.”

NARUC Notebook

State commissioners met days after the attempted assassination of former President Donald Trump. The shooting “really shook me,” Florida Public Service Commission Chair Mike LaRosa said as he opened the NARUC conference Monday. “A cowardly individual who would attempt to murder a political candidate who Americans have chosen to represent them is robbing America and its people of democracy.” But the tone at NARUC events is “rarely political,” LaRosa noted. “As we convene, politics always stays at the door.” Saturday was “a dark day for America” and “a shocking backdrop to the start of our Summer Policy Summit,” said NARUC President Julie Fedorchak (R) in a statement Sunday.

The FCC is doing the right thing in taking a case-by-case approach to granting amnesty to Rural Digital Opportunity Fund (RDOF) award recipients that may default on their commitments, WTA and NTCA officials said during a NARUC panel Monday. Telecom consultant Carol Mattey agreed the FCC took the right approach in a July 3 public notice. “We don’t want to be sending a message to” broadband equity, access and deployment (BEAD) “applicants that if unforeseen circumstances happen they can be relieved of their obligations,” she said. But Klein Law Group's Philip Macres, a competitive carriers attorney who represented a group that sought blanket amnesty, said the FCC’s approach seems unnecessarily complex. RDOF awardees shouldn’t be punished for not expecting “hyperinflation” that increased costs by 100%-300%, he said. Mattey responded her clients that won RDOF funds are ahead of schedule and close to completing projects. “I fail to understand how inflation was such a debilitating event for some companies but not others,” Mattey said: That’s why a waiver process makes sense. States should play an active oversight role with broadband dollars, panelists said. When the FCC adopted the framework for the Connect America Fund, it directed state commissions to make annual certifications, said Mattey. “The state commissions have a lot of power that hasn’t been exercised that much,” she said. “If there are serious concerns that a state is not doing anything at all,” not even working on permitting or other preliminary steps, the state commission should ask for an explanation “and potentially not certify them,” she said. State commissions should similarly question RDOF awardees that haven't reported progress, she said. Macres pushed back. With the FCC enforcing the programs, “it’s kind of aggressive” to have state commissions policing, too, he said. “If you’re not building, then you’re going to be subject to penalties from the FCC.” With their ability to designate eligible telecom carriers, “there is a role for the state commissions to play” that will “dovetail” into work on BEAD, said Derrick Owens, WTA senior vice president-government and industry affairs. State commissions should coordinate with broadband offices handling BEAD dollars, he added.