WASHINGTON-Strong arguments voiced by the paging industry and other telecom sectors against public pay phone deregulation in federal appeals court last week could force the Federal Communications Commission to revise its rules.
Facing tough questions from a three-judge panel in the U.S. Court of Appeals for the District of Columbia Circuit, FCC attorney John Ingle found himself repeatedly on the defensive in trying to justify a regulatory plan to compensate pay phone operators for toll-free 800 telephone calls and other services they provide.
The 1996 telecommunications act directed the FCC to develop regulations fostering competition among pay phone service providers, or PSPs. The FCC adopted a carrier-pays procedure, one which the paging industry and others claim is burdensome and constitutes de facto intrastate rate regulation.
The U.S. Supreme Court in 1986 affirmed that states, not the FCC, have jurisdiction over intrastate telephone rates.
The paging industry, which uses 800 numbers heavily, supports a system in which the caller pays for toll-free calls.
“The FCC has adopted the least efficient systems for accomplishing its objectives,” said attorney Theodore Olson, arguing on behalf of the Personal Communications Industry Association.
Ingle argued that rate setting is implied in Congress’ mandate for PSPs to be “fairly compensated” for “each and every call” made from a pay phone.
But Judges Ginsburg and Edwards disagreed, replying that FCC authority to craft a compensation scheme does necessarily extend rate-making duties to federal regulators.
Ingle helped to defuse some of the harsh questioning by judges with a bit of impromptu levity.
When asked more than once by Chief Judge Edwards what would keep the FCC from charging consumers $100 for a toll-free 800 call, Ingle earnestly replied, “We’re just not like that.” The line gave Edwards and the packed courtroom a good laugh.
The pay phone ruling, which is likely to be remanded to the FCC, is headed the same direction as other actions taken by the agency to implement the 1996 telecom reform law. A ruling on appeals of the FCC’s interconnection order is expected soon from the 8th Circuit Court. And it is highly likely the FCC’s decisions on access charge reform and universal service will be litigated.
Some critics say FCC Chairman Reed Hundt is being heavy handed in his interpretation of congressional intent regarding the telecom act. On the other hand, the issues being dealt with are complex and affect a wide range of telecom sectors in such significantly competitive and economical ways that litigation is virtually guaranteed.
