FCC Urged To Reconsider Proposal; Phone Rates to Skyrocket, Universal 911 At Risk
James J. Gormley
October 28, 2008
The Federal Communications Commission (FCC) must allow more time for due process and public comments before it acts on a sweeping proposal that will revamp phone services in the U.S., say state regulators and industry watchdogs.
Industry experts say that the FCC proposal (Docket No. 01-92) will send local phone rates skyrocketing and could endanger 911 emergency phone services through changes to the Universal Service Fund.
On October 15th, 2008, FCC Chairman Kevin Martin circulated a proposal "that would allow your local telephone companies to raise the rates for your local telephone service by 30 to 40 percent, if not more," said Long Beach, CA-based Free Conferencing Corporation in an e-mail alert that was issued on October 27th.
"This proposal, if it is allowed to pass, will effectively put that money into the hands of long distance giants like AT&T and Verizon," wrote the conferencing company.
The e-mail alert asserted that the proposal is to "shift current long distance costs to your local telephone company which is why your local rates will rise, but there is nothing which requires the long distance companies to lower your phone bills by a single penny while those companies will save literally billions of dollars annually in current costs."
"The FCC is expected to go ahead with its proposal soon unless they receive effective opposition, especially from Congress," said the Long Beach company. "If members of Congress learn that their constituents do not like this deal, especially in these fragile economic times and on the eve of elections, they are likely to direct the Commission to reconsider."
In an October 21st letter sent to the FCC, the National Association of Regulatory Utility Commissioners (NARUC) said that FCC Chairman Martin's proposal "needs to be fully vetted by all stakeholders because it will have a profound impact on the telecommunications industry and consumers in an era of financial uncertainty."
"Respectfully, in the wake of the credit crisis still reverberating throughout the U.S. economy, the FCC is rushing to resolve a $13 billion problem based on insufficient information, an inadequate record and an incredibly compressed deliberative period," NARUC's letter said. "There is no need to do so."
NARUC's letter cautioned that the FCC proposal "leaves too many unanswered questions and will have significant unintended consequences for the industry, consumers, and the state regulators charged to protect them."
"The Commission cannot rely on informal news briefings, a release announcing a draft is circulating, and private-party submissions to support a change in the rules," the NARUC letter said.
This is especially important because any new proposal raises a host of unanswered questions, added NARUC, such as: "How does this approach benefit consumers, if at all? Will it put upward pressure on local rates; if so, what are the expected rate increases?"
Instead of moving forward early next month, NARUC urged the FCC to give parties at least 90 days to comment on the proposal.
The letter was signed by the following state regulators: NARUC Telecommunications Committee Chairman Ray Baum of Oregon; Commissioner Mark K. Johnson of Alaska; Commissioner Larry S. Landis of Indiana; Commissioner John D. Burke of Vermont; Commissioner Philip B. Jones of Washington; Commissioner Tony Clark of North Dakota; Commissioner Steve Kolbeck of South Dakota; and Commissioner Betty Ann Kane of the District of Columbia.
"Let your Representatives and Senators know immediately that you want them to stop this proposal that will harm consumers," wrote the conferencing company in reference to the FCC proposal.
Industry experts say that the FCC proposal (Docket No. 01-92) will send local phone rates skyrocketing and could endanger 911 emergency phone services through changes to the Universal Service Fund.
On October 15th, 2008, FCC Chairman Kevin Martin circulated a proposal "that would allow your local telephone companies to raise the rates for your local telephone service by 30 to 40 percent, if not more," said Long Beach, CA-based Free Conferencing Corporation in an e-mail alert that was issued on October 27th.
"This proposal, if it is allowed to pass, will effectively put that money into the hands of long distance giants like AT&T and Verizon," wrote the conferencing company.
The e-mail alert asserted that the proposal is to "shift current long distance costs to your local telephone company which is why your local rates will rise, but there is nothing which requires the long distance companies to lower your phone bills by a single penny while those companies will save literally billions of dollars annually in current costs."
"The FCC is expected to go ahead with its proposal soon unless they receive effective opposition, especially from Congress," said the Long Beach company. "If members of Congress learn that their constituents do not like this deal, especially in these fragile economic times and on the eve of elections, they are likely to direct the Commission to reconsider."
In an October 21st letter sent to the FCC, the National Association of Regulatory Utility Commissioners (NARUC) said that FCC Chairman Martin's proposal "needs to be fully vetted by all stakeholders because it will have a profound impact on the telecommunications industry and consumers in an era of financial uncertainty."
"Respectfully, in the wake of the credit crisis still reverberating throughout the U.S. economy, the FCC is rushing to resolve a $13 billion problem based on insufficient information, an inadequate record and an incredibly compressed deliberative period," NARUC's letter said. "There is no need to do so."
NARUC's letter cautioned that the FCC proposal "leaves too many unanswered questions and will have significant unintended consequences for the industry, consumers, and the state regulators charged to protect them."
"The Commission cannot rely on informal news briefings, a release announcing a draft is circulating, and private-party submissions to support a change in the rules," the NARUC letter said.
This is especially important because any new proposal raises a host of unanswered questions, added NARUC, such as: "How does this approach benefit consumers, if at all? Will it put upward pressure on local rates; if so, what are the expected rate increases?"
Instead of moving forward early next month, NARUC urged the FCC to give parties at least 90 days to comment on the proposal.
The letter was signed by the following state regulators: NARUC Telecommunications Committee Chairman Ray Baum of Oregon; Commissioner Mark K. Johnson of Alaska; Commissioner Larry S. Landis of Indiana; Commissioner John D. Burke of Vermont; Commissioner Philip B. Jones of Washington; Commissioner Tony Clark of North Dakota; Commissioner Steve Kolbeck of South Dakota; and Commissioner Betty Ann Kane of the District of Columbia.
"Let your Representatives and Senators know immediately that you want them to stop this proposal that will harm consumers," wrote the conferencing company in reference to the FCC proposal.
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