WASHINGTON-As promised since the day the Federal Communications Commission approved its long-awaited first opinion and order regarding local competition and interconnection, state jurisdictions have filed in court to challenge the issue. The Justice Department, however, opposes any delay in implementing the new rules.
Following a 5-0 vote by the Florida Public Service Commission against adopting the federal rules, state attorney general Rob Vandiver last Friday first filed a petition for stay at the FCC and then filed to appeal the decision in the U.S. Appeals Court for the 11th Circuit.
“Our own interconnection plan has been working well. The Florida act and the federal act are extremely similar,” said Vandiver. He added that the state “cannot and will not abide” any federal mandating of what the Florida PSC holds as its right to determine, among other things, the price of interconnection, harking back to the FCC’s proposed proxy pricing. “Once the (federal) government steps in, you never get it back,” he concluded.
Farther north, the New York State Public Service Commission petitioned the Second Circuit Court of Appeals Sept. 3 to “annul” the order. “We realize the FCC opinion is intended also to further the development of local competition,” commented PSC Chairman John O’Mara in a written statement. “However, despite FCC Chairman Hundt’s recent assertions, we believe it substantially violates the regulatory scheme preserved in the 1996 Telecommunications Act, and established by Congress in 1934, which reserves to the states the regulation of intrastate communications.”
Like Florida, New York has put its own interconnection plan to work, and its commissioners argue that “the FCC order is an intrusion” on all its efforts to forward a progressive regulatory atmosphere.
“Among other things, the FCC opinion would preclude the state from carrying out the plans it has for bringing competition to the local exchange and preserving universal telephone service at reasonable rates for all customers in a way best suited to the needs of New Yorkers,” the PSC said.
The regional holding companies began making their opposition to the order official, with U S West Inc. filing its appeal Sept. 5 in the Court of Appeals for the District of Columbia Circuit. It also filed the requisite petition for stay at the commission Friday.
“The FCC’s rules are convoluted but the stakes are clear,” wrote Richard McCormick, U S West’s chairman and chief executive officer. “U S West will be required to sell all the parts of our network to competitors at below-cost rates … You can imagine how that pricing structure will discourage us or any other companies from making substantial investments in new telecommunications network facilities.”
The carrier again cites states’ rights in determining how interconnection rules will be implemented and at what cost; it also expressed concern about the lack of cost-recovery mechanisms to cover past network investments.
The Justice Department filed its own comments at the FCC Sept. 4 opposing action taken by GTE Corp. and Southern New England Telephone Co. at the commission and appeals court level for a delay of the order pending judicial review.
“It is essential to the public interest in competition that the commission and the courts reject all attempts to delay the local exchange competition that Congress intended the Telecommunications Act of 1996 to promote, and to disrupt the cooperation and coordination among the commission, state authorities, the department and private parties on which the success of this complex undertaking depends,” Justice’s antitrust division wrote.
Also opposing GTE’s and SNET’s actions was the Cellular Telecommunications Industry Association, which pointed out in its comments to the commission that the joint motion for a stay “does not mention interconnection compensation issues as they relate to the regulation of incumbent local exchange carrier interconnection with commercial mobile radio services providers. Such omission … renders the movants’ arguments unconvincing when applied to ILEC-CMRS issues,” it wrote. And because petitioners have not, in CTIA’s opinion, met the four criteria for a stay, “any further delay in the implementation of the FCC’s rules will further frustrate CMRS providers’ longstanding rights of co-carrier status and reciprocal compensation,” it added.
