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Good morning. My name is Leon
Jacobs, and I am here as the Chairman of the Consumer Affairs Committee of the
National Association of Regulatory Utility Commissioners (NARUC). I am also the
Chairman of the Florida Public Service Commission.
Chairman Upton, I’d like to
begin by thanking you and the other subcommittee members for the invitation to
speak to you today. It is both an honor and a privilege to be here. I also
sincerely appreciate the recognition, implicit in the subcommittee’s
invitation, of the critical role State commissions play in the transition to a
more competitive telecommunications market under the scheme Congress adopted in
the 1996 legislation.
I have come here today to give
you my preliminary thoughts regarding H.R. 1765.
Because of the short time that
has elapsed since the bill was introduced, NARUC has not had an opportunity to
form a consensus view on this legislation. Similarly, the Florida Commission has
not taken an official position on the bill. However, I can assure you that in
principal, NARUC would embrace public policy that further empowers both the
states and the Federal Communications Commission (FCC) to effectively address
improper business practices.
PROPOSED INCREASE IN FCC FINING
AUTHORITY
In my opinion, the adoption of
this bill would not cause a deviation from the current collaborative enforcement
efforts that are underway by the states and the FCC. We continue to see progress
in the activities of the State and National Action Plan (SNAP) group, which is
comprised of staff from the NARUC Staff Subcommittee on Consumer Affairs, the
FCC’s Enforcement and Consumer Information Bureaus, and the National
Regulatory Research Institute.
SNAP was formed at the NARUC’s
110th Annual Convention, and its mission is to foster a partnership between the
FCC and state commissions for the purpose of strengthening consumer protections
in the telecommunications marketplace. Specific focus areas include cooperation
in consumer education, enforcement, and regulatory initiatives. Through SNAP,
the FCC and states are able to share results of investigations into questionable
business practices involving companies in the telecommunications industry.
Through these efforts the FCC and the states have demonstrated their desire to
work collaboratively to be more attentive to the needs of consumers and the
concerns of our congressional leaders.
As you are aware, NARUC has sent
several letters opposing H.R. 1542, the "Tauzin-Dingell bill." While I
do not wish to address this bill at this hearing, I simply want to note that I
am testifying on the bill before us as a stand alone bill.
Therefore, as stand alone
legislation, I support the goal of increasing the penalties at the national
level against companies found violating the FCC's rules and orders. Florida
continues to receive complaints against companies that have already been fined
or had settlements accepted by the FCC for various violations. It appears that,
under certain circumstances, the current level of penalties is not adequate in
removing the incentives to violate current law. Chairman Powell’s proposals
for additional fines suggests that the FCC’s current level of fining authority
is not sufficient to make some activities unprofitable. Finally, I suggest to
the sponsors of this legislation that they consider clarifying that all
penalties assessed on carriers be taken "below the line" (as required
by the current FCC rules) and be excluded from customer rates.
STATE ARBITRATION DEADLINES
While I appreciate the sponsor’s
recognition of the need for states to arbitrate interconnection agreements, I am
concerned that this bill provides only 60-day time frame for States to resolve
these disputes. My concerns relate primarily to due process and the ability to
build a clear record needed to render a fair decision. Currently, in Florida,
when we address complaints regarding interconnection agreements, we have found
that often the issues involved in these cases are very complex. In such cases,
substantial testimony and a full discovery process may be needed to resolve
these issues. Requiring that these cases be processed in just 60 days may impair
our ability to address issues in a reasoned and well-informed manner.
The Florida Commission and its
staff have been exploring ways to handle these types of complaints in a more
expedited manner. The complexity of the issues involved in a complaint is one
factor that will likely be taken into consideration when deciding whether a case
should be "fast tracked." Even if a case is "fast-tracked,"
the time frame under discussion for such an expedited process is a minimum of
approximately 100 days.
RESERVATION OF STATE AUTHORITY
Finally, I appreciate the
critical reservation of state authority in proposed section 252(e)(3) of the
legislation to prescribe methods to ensure timely and effective compliance with
any interconnection agreement, including the imposition of service quality
performance requirements. The critical role service quality performance data
plays in the transition to a more competitive environment is highlighted by
NARUC’s current position before the FCC opposing the elimination of service
quality reporting requirements on the incumbent telephone companies.
CONCLUSION
In summary, I support increasing penalties at the
national level; working together with the FCC to protect consumers from
companies involved in deceptive business practices; and having states resolve
disputes in a timely manner, but recommend that the 60-day time frame be
increased to at least 100 days.
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