Resolution on FCC Reform Divides NARUC Committee; Universal Service Fund Changes Less Controversial

WASHINGTON, February 15, 2009 – State regulatory commissioners are split on how strongly to express longstanding grievances with Federal Communications Commission processes. A resolution on reform of FCC management and practices dominated the agenda as the National Association of Regulatory Utility Commissioners continued its winter meeting Sunday.

The resolution, sponsored by Washington State Commissioner Phillip Jones, has been amended multiple times NARUC’s staff subcommittee on telecommunications since it was introducted late Friday.

The original draft resolution was a straightforward, one-page document which welcomed changes at the commission by the new Obama administration, while calling attention to often-cited criticisms of the lack of transparency in operations, the slow pace of action on dockets and delay in open opening new ones, as well as barriers to intra-agency cooperation.

The tenure of former FCC Chairman Kevin Martin was notorious among industry observers for a lack of communication across the FCC’s bureaus and offices. A common criticism of Martin’s chairmanship was that bureaus were effectively forbidden from sharing information among themselves, or even with the other four commissioners or their staffs. Acting Chairman Michael Copps said reversing Martin-era restrictions is a high priority for his reform agenda.

The staff subcommittee met Sunday afternoon to vote on recommending the resolutions to NARUC’s telecommunications committee, which consists of 33 commissioners. The significantly revised draft included language praising Copps for his reform effort, with the caveat that many of the changes had been employed by previous chairmen and suggested by the other two sitting commissioners.

The subcommittee draft went on to specify in detail other NARUC concerns, including problems in the operation of Federal-State Joint Boards and a “lack of definitive action by the Commission on important issues both at a federal and state level” that results in many orders being “deemed granted” through “excessive” use of the forbearance process. Recent rulemakings and orders made it “apparent that the Commission needs to enhance its capabilities in…economics, engineering, and administrative law,” read one clause.

The subcommittee considered amending Sunday’s version to include among the complaints the frequency of ex parte presentations as an aspect of a rulemaking process that effectively minimizes the opportunity for public input. “The average consumer really has no way to come to Washington and meet with commissioners,” said one staff subcommittee member who supported the amendment.

But many members were unsure if such strong criticism would be constructive when NARUC is trying to improve relations between state commissions and the FCC. “I wouldn’t want them to come into [my state commission] and tell me how to do things,” said one member. Another was far more emphatic: “I’m amazed and appalled by [this resolution] when we’re getting into a mode where we can operate with a much more open dialogue [with the FCC].”

The subcommittee then junked the entire resolution, replacing it with a half-page substitute that acknowledged the new administration’s changes and Congress’ intention to review FCC procedure and resolved to support a public review process and offer NARUC’s assistance. The “watered-down” language passed the subcommittee by a vote of 7-4.

But when the full committee convened later in the day, Jones and co-sponsor Commissioner John Burke of Vermont returned with a less caustic, but equally specific, version of the resolution. It replaced the one which had been gutted by the staff subcommittee.

The substitute resolution prefaced the specific criticisms and suggestions by making reference to a 15-page letter sent last December by NARUC president Fred Butler to Susan Crawford, a University of Michigan telecommunications law professor who advised the Obama-Biden transition team on FCC matters. The letter emphasized the success of NARUC’s member commissions in promoting novel programs and solutions, many of which have often been successfully replicated at the federal level.

Butler’s letter also outlined an agenda for FCC reform in hopes that an Obama FCC would avoid missteps of commissions past that often led to court losses for the FCC, often after long and costly litigation. He suggested that the FCC return to the practice of using sworn, in-person testimony with cross-examinations in establishing a record for its decision-making, as well as holding public negotiation sessions with a transcript — practices the FCC has not used since the 1970’s, but still used regularly by state commissions.

Butler’s letter may have gotten NARUC “on the record” with the FCC, said Michael Moffet of Kansas. A resolution with specific suggestions would be redundant, he said. Florida’s Lisa Edgar agreed, suggesting that “less is more.” But Burke questioned the effectiveness of the weaker language. Asking his fellow commissioners if they should “give [the FCC] a road map…or tell them to do the right thing,” he noted with a hint of sarcasm: “Do the right thing hasn’t worked well in the past.”

California Public Utility Commissioner Rachelle Chong, a former FCC commissioner herself, said she was troubled by the tone of the Burke/Jones resolution. Accusing the FCC of being slow would be such a great idea when state commissions are often met with the same criticism, she said. “People in glass houses shouldn’t throw stones,” she said. And such a resolution would be poorly timed when acting chairman Copps is doing “very positive things,” she added.

But Burke said that the resolution wasn’t about demanding an agenda for the FCC, but letting the commissioners know what the NARUC committee thinks would be productive. “We don’t think we’ll wake up tomorrow and the world will be different on the 8th floor [or the floor on which the agency commissioners and their staffs are located]– but this is an opportunity that shouldn’t be missed.”

The committee also briefly discussed Chong’s broadband mapping resolution, and a resolution sponsored by Washington, DC, Commissioner Betty Ann Kane to endorse a pilot program expanding the FCC’s Lifeline and Link Up programs to cover broadband service.

Kane said that some perceived opposition to the resolution among the staff subcommittee came from confusion over the goals of the recently-passed broadband stimulus legislation.

The stimulus is about building networks, not making service affordable, she said. Universal service, whether for voice or broadband, is a “matter of social philosophy,” she added. And while some don’t believe in the program’s goals, Kane argued that there is “no argument that USF [for voice] hasn’t been successful.” She expected her resolution to pass the committee without a problem when it votes on Wednesday.