[Congressional Record Volume 147, Number 39 (Thursday, March 22, 2001)]
[Extensions of Remarks]
[Pages E426-E427]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          TELECOMMUNICATIONS CONSUMER ENHANCEMENT ACT OF 2001

                                 ______
                                 

                           HON. CLIFF STEARNS

                               of florida

                    in the house of representatives

                       Wednesday, March 22, 2001

  Mr. STEARNS. Mr. Speaker, I would like to submit for the Record a 
number of concerns that I have been made aware of by the Florida Public 
Service Commission regarding H.R. 496. In the past week my staff and I 
have been in contact with the bill's sponsor, Representative Barbara 
Cubin, in assembling answers to the Florida PSC's concerns. For the 
record I would like to summarize the Florida PSC's concerns and the 
answers we have received from Representative Cubin's office.

       As a result of these proposed diminished reporting 
     requirements, how would regulated and deregulated services be 
     differentiated to avoid cross subsidization of 
     telecommunications offerings and non-regulated services?
       H.R. 496 would do nothing to change the FCC's or state 
     commissions ability to differentiate regulated and non-
     regulated services.
       H.R. 496 would leave intact the FCC's cost allocation 
     rules. It would only eliminate the separate requirement to 
     file voluminous CAM and ARMIS reports originally designed for 
     the largest carriers.
       How will there be assurance that purported savings from 
     reporting responsibilities will actually be applied toward 
     the provision of advanced services in rural areas, as 
     highlighted in the bill?
       Virtually all 2 percent carriers only serve areas defined 
     under the Act as ``rural''. Their network investment will 
     necessarily be in rural areas.
       Rate of return regulation, by its nature, will ensure 
     either reinvestment in rural network infrastructure or 
     reduced rates for customers. Virtually all 2 percent carriers 
     are rate of return carriers.
       Many of the benefits of the bill are intangible. It would 
     primarily give carriers added flexibility to respond more 
     quickly and effectively to customer demand and competitive 
     opportunities.
       To attempt to tie specific savings directly to specific 
     investments would significantly increase bureaucratic red 
     tape rather than decrease it and would ultimately slow 
     investment in rural areas.

[[Page E427]]

       What restriction in this bill will prevent regional bell 
     operating companies and other large holding companies from 
     qualifying as a 2 percent carrier?
       New language added by the Energy and Commerce Committee 
     necessarily excludes larger companies from the definition of 
     ``two percent carrier''. The definition now includes an 
     operating company which, together with all affiliated 
     carriers, ``controls . . . fewer than two percent of the 
     nation's subscriber lines. . . .''
       The new language was adopted from a recent FCC order that 
     definitively construed the same definition in Section 
     251(f)(2) of the 1996 Act.
       If a company such as Cincinnati Bell is considered a 2 
     percent carrier, then what assurance is there that this bill 
     is truly targeted toward rural areas and not certain urban 
     areas such as Cincinnati, Ohio?
       Apart from Cincinnati, the RBOCs and Sprint serve the 
     remaining 99 of the 100 largest metropolitan statistical 
     areas in the country. The remainder of two percent companies 
     serve rural areas and second- and third-tier towns (e.g. Rock 
     Hill, South Carolina; Roseville, California; Dalton, 
     Georgia).
       How does self-certification of competitive entry by a 
     ``single facility based competitor serving a single 
     customer'' truly promote effective competition, or would this 
     ``one-customer'' standard in reality inhibit true development 
     of competition?
       H.R. 496 requires significantly more than ``one customer'' 
     for competitive entry. It requires, either expressly or by 
     necessary implication:
       Existence of an enforceable interconnection agreement 
     between the incumbent and competitor (including any necessary 
     state arbitration procedures).
       Provision or procurement of switching facilities.
       Actual provision of service (implying billing, customer 
     service, maintenance and other systems that are fully 
     operational).
       Any competitive carrier that has made the investment 
     necessary to meet all these conditions would necessarily be 
     positioned to pose a competitive threat throughout the ILEC's 
     service territory.
       Any concerns regarding the competition standard in H.R. 496 
     should be mitigated by the fact that Section 286(a) only 
     allows downward pricing flexibility. Regardless of the 
     trigger, customers would benefit from lowered prices and 
     increased competition.
       The standards set in 286(d) mirror the standards set by the 
     FCC for competitive entry in the SBC/Ameritech merger, which 
     required a small number of actual customers to establish 
     competitive entry by SBC.
       If ``any new service'' not currently being provisioned by a 
     2 percent carrier is subsequently offered, would this bill 
     preempt a State from oversight of this offering and why 
     should it be exclusively considered interstate in nature?
       H.R. 496 would not alter state jurisdiction over new 
     services. H.R. 496 would only affect the FCC's cumbersome 
     approval process for new interstate services. Historically, 
     states have had jurisdiction over intrastate services but not 
     interstate services.
       To date, no party except the Florida PSC has suggested 
     enlarging the scope of the bill to include new intrastate 
     services.
       Would the ability of 2 percent carriers to opt in or choose 
     to opt out of the National Exchange Carrier Association 
     (NECA) pool, in Section 284 of the bill, undermine this 
     mechanism and promote ``gaming'' of this process by certain 
     carriers?
       New language added by the Energy and Commerce Committee 
     restricts 2 percent carriers' ability to move in and out of 
     the pool. This language provides an additional level of 
     assurance that no company could game this process.
       The majority of 2 percent carriers will continue to rely on 
     the NECA pool. It is not in their interest to undermine a 
     mechanism that serves their and their customers' needs.
       Is this legislation premature in light of the FCC's current 
     consideration of the proposal by the Multi-Association Group 
     (MAG) which also purports to help promote the deployment of 
     broadband services to rural areas? Also, isn't it premature 
     in light of the FCC's docket on streamlining of reporting 
     requirements for mid-sized carriers?
       H.R. 496 and the MAG plan address significantly different 
     sets of issues. H.R. 496 is primarily designed to clear away 
     a handful of outmoded regulatory burdens that are ill-suited 
     for 2 percent carriers. The MAG plan proposes an entirely new 
     system of incentive regulation and would also significantly 
     alter existing access charges. Since they are complementary 
     initiatives, it is unnecessary to delay one pending 
     consideration of the other.
       The FCC docket on streamlining reporting requirements, 
     while constructive, will in all likelihood perpetuate a 
     number of the same burdens that exist today. The FCC has been 
     debating accounting reform without taking any final action at 
     least since 1999 when it was responding to the ITTA 
     forbearance petition.

     

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